The Great Resignation. The Big Quit. The Great Reshuffle. No matter how you refer to it, the numbers are staggering. Between January 2021 and February 2022, nearly 57 million Americans voluntarily quit their jobs. But they didn’t quit to lounge on the couch. The majority left for more desirable professional opportunities.
Now, combine those labor shortages with today’s record-breaking inflation, and many employers are walking a very thin line between remaining competitive in the labor market by offering a robust benefits package and staying afloat.
Ready or not, costs are rising
Mercer reports that employers in the U.S. expect medical plan costs per employee to rise an average of 5.6% in 2023. If that sounds steep, just wait, because that’s not even the tip of the iceberg. As most health plans have multiyear contracts with medical providers, increases are on the horizon as provider contracts are renegotiated with higher reimbursement levels over the next few years.
According to Sunit Patel, Mercer’s chief actuary for health and benefits, “Employers have a small window to get out in front of sharper increases coming in 2024 from the cumulative effect of current inflationary pressures.”
A broken system
The health care system is broken. That isn’t new, and it doesn’t surprise employers who have been navigating rising costs for years. While larger, self-funded groups may have the option to leverage cost-savings initiatives, those options aren’t available to companies with fewer than 100 employees. Those employers can’t tap into cost-containment strategies. They’re at the mercy of the system. They’re out of luck.
Someone must pay
As costs skyrocket across the board, and household budgets are continuously strained, most employers are doing what they can to maximize both take-home pay and benefits. That means they are absorbing the cost of those increases. And at some point, something must give.
Research by the Kaiser Family Foundation shows that 87% of executives surveyed believe the cost of providing health benefits to employees will become unsustainable in the next five to 10 years. That makes sense, as health care systems across the country charge employers and private insurance companies 2.5 times more than their Medicare prices for the same care.
A new way
The writing is on the wall. The traditional way of offering benefits just won’t work indefinitely, and now is the time to change course and adjust for the future. Challenge your broker to provide alternatives to the current system. In addition, requesting quotes from the traditional health care markets, request that your broker provide cost-effective options. They’re the best chance you have to attract and retain the talent you need to grow and thrive while keeping an eye on your bottom line.
Mark Freiman is President & Founder of Emunah Health Group, an innovative insurance solution customized for Northeast Ohio employers with 15+ employees. Emunah Health is also a member benefit partner of the Ohio Society of CPAs. Contact Mark today to see if he can help lower your insurance rates at (216) 310-3329 or mfreiman@EmunahHealthGroup.com.