sascom voices - The sascom magazine blog

Hi Rick,

As I think about the implications of your message in this post about "Who is Providing Care" and how it relates to your earlier posting about global trends and opportunities, I am left wondering about how the role of the employer group will change in our evolving healthcare ecosystem.

Companies in all industries are under pressure to reduce costs and grow top-line revenues, and finding a way to contain increases in employee healthcare benefits costs is a key means to that end. According to estimates by the National Coalition on Health Care, employer health insurance premiums in 2007 increased 6.1%, fueled in part by an estimated increase in total national health expenditures at two times the rate of inflation.

One trend in recent years among large employers has been to phase out pension benefits with a tiered approach and offer incentives to shift retirement planning to 401k plans such as increased company matching funds. With regards to medical benefits, companies have been increasing the employee portion of premiums payments for years. Has there been any movement toward phasing out traditionally structured medical benefits in favor of something that might look like a 401k for health insurance in which the individual has more choices, but also bears additional risks as well as exposure to overall healthcare cost increases since the employer limits its risk to a static contribution percentage?

Also, for companies that stay the course and continue to offer traditionally structured employer-funded medical benefits, how can they manage the risks of increasing healthcare costs? What might health insurance plans want to consider to help employer groups manage those costs?

Thanks,
JB