Health care reform has certainly seen its share of changes over the past few years, culminating in a shocking court ruling in December 2018 that found the Affordable Care Act unconstitutional. That decision has been stayed pending appeals, but it raises important questions about the future of health care, especially as it affects small businesses. What can small business owners expect for health care and health care reform in 2019?
Health care spending by employers will continue increasing – especially for many small businesses.
According to advisory firm Mercer’s National Survey of Employer-Sponsored Health Plans, employers will face spending increases ranging from 4.1% (if they make plan changes) to 5.3% (if they don’t make any changes to their health care plans). However, those figures are averages; the increases are not evenly distributed, and smaller employers are facing greater increases. In fact, 34% of employers with 10 to 499 employees indicate their health plan spending increased by more than 10% last year. Only 11% of employers with 20,000 or more employees said the same.
Small businesses are shifting into health plans that allow them to offset costs.
Part of the challenge for small employers is that they lack the buying power of an organization with 20,000+ employees, so they often spend more for the same health plan. And then, small businesses have fewer resources for absorbing high health costs. Consequently, small employers are moving into alternative health benefit offerings. For example, high-deductible, consumer-directed health plans cost 13% less on average than a traditional preferred provider organization (PPO) plan. Others are turning to organizations that can give them access to Large Group health plans. Utilizing a Professional Employer Organization (PEO) can help employers gain access to cost-effective health insurance options that would be otherwise unavailable.
Additionally, many businesses are turning to technology.
Specifically, they are looking for “point solutions” that target specific health issues, like diabetes, and provide health education and interactive condition monitoring. In turn, the data produced by the monitoring can be analyzed to determine if the employee’s condition is worsening or otherwise needs early intervention, when preventive health costs will be lower than, say, surgery or other acute treatments. “Employers have realized that it’s up to them to solve the problems of high cost, inconsistent quality and low satisfaction that plague the U.S. health care system,” said Renya Spak, leader of Mercer’s Center for Health Innovation. “Without question, technology is going to be part of just about every meaningful solution.”
CoAdvantage, one of the nation’s largest Professional Employer Organizations (PEOs), helps small to mid-sized companies with HR administration, benefits, payroll, and compliance. To learn more about our ability to create a strategic HR function in your business that drives business growth potential, contact us today.