News Brief: Mercer Report Projects 5.8% Health Benefits Cost Increase in 2025
U.S. employers estimate that health benefit costs will increase by 5.8% in 2025, according to Mercer’s
2024 National Survey of Employer-sponsored Health Plans. This would mark the third consecutive year that the total cost per employee rose more than 5%. The report attributed the higher costs to the widening gap between the supply of health care workers and the demand for health care services, along with costly behavioral health care and glucagon-like peptide-1 (GLP-1) medications.
The report included an analysis of responses from more than 1,800 employers nationwide. Employers estimated that their costs would rise by an average of 7% if they took no action to lower costs. Not surprisingly, smaller employers (organizations with 50-499 employees) estimate being impacted the most, reporting that costs would rise by an average of 9% if they took no action to lower costs. Mercer’s figure is in the 7%-9% range, lining up with other industry reports, such as Aon and the International Foundation of Employee Benefit Plans.
“While we’ve seen significant increases in utilization in a fewareas, such as for behavioral health care and GLP-1 medications,overall utilization has had a relatively modest impact on trend this year. The biggest driver of higher costs is price dynamics,some of which are macro in nature.”
-Sunit Patel, Mercer’s U.S. chief actuary for health and benefits
Compliance Bulletin – Legal Considerations for Employee Terminations
Employee terminations are often complicated, and if not conducted properly, employers can open themselves up to costly legal challenges and negatively affect their business or reputation. Understanding the legal obligations of employee terminations can help employers ensure this process is conducted in a manner that minimizes legal risks and accounts for various business considerations.
Legal Update: All Draft Forms & Instruction for ACA Reporting Now Available
In July 2024, the IRS released draft 2024 forms for reporting under Internal Revenue Code Sections 6055 and 6056. Thereafter, on Sept. 4, 2024 and Sept.13, 2024, respectively, the draft instructions for the B series forms and C series forms were released.
- The 2024 draft Forms 1094-B and 1095-B (and related draft instructions) are draft versions of forms and instructions that will be used by providers of minimum essential coverage—including self-insured plan sponsors that are not applicable large employers (ALEs)—to report under Section 6055.
- The 2024 draft Forms 1094-C and 1095-C (and related draft instructions) are draft versions of forms that will be used by ALEs to report under Section 6056 as well as for combined Section 6055 and 6056 reporting by ALEs that sponsor self-insured plans.
No major changes were made to the draft forms or instructions for 2024 reporting. However, certain changes may be made once the forms and instructions are finalized.
Career Elevator: Enhancing Your Workplace Value (September)
In today’s dynamic and competitive job market, demonstrating and elevating your workplace value is essential for career growth and job satisfaction. Whether seeking a promotion or simply looking to solidify your position within your company, focusing on your workplace value can help you achieve your professional goals.
Compliance Bulletin – Health Plans Must Update HIPAA Policies for New Reproductive Health Care Rights
Beginning Dec. 23, 2024, covered entities and their business associates must comply with stricter
HIPAA privacy protections for reproductive health care. These new protections prohibit regulated entities from using or disclosing protected health information (PHI) related to lawful reproductive health care:
- For a criminal, civil or administrative investigation into (or proceeding against) a person in connection with reproductive health care; or
- To identify an individual, health care provider or other person for purposes related to such an investigation or proceeding.
In addition, regulated entities must obtain a valid attestation when a request is made to use or disclose PHI potentially related to reproductive health care for certain purposes to ensure that the use or disclosure is permissible.
Legal Update: 5th Circuit Upholds DOL’s Authority to Set Minimum Salary Requirement for White-collar Exemptions
On Sept. 11, 2024, in Mayfield v. U.S. Department of Labor, the U.S. Court of Appeals for the 5th Circuit held that the U.S. Department of Labor’s (DOL)authority to define and delimit the terms of the executive, administrative and professional (EAP) exemptions includes the power to set a minimum salary for exemption under the Fair Labor Standards Act (FLSA).
Legal Update: EBSA Releases Updated Cybersecurity Guidance for Employee Benefit Plans
Through Compliance Assistance Release No. 2024-01, the U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) is confirming that the cybersecurity guidance it issued in April 2021 generally applies to all employee benefit plans, including health and welfare plans.
In the Loop – September
Consumer Prices Dropped in June For the First Time in 4 Years
The U.S. Bureau of Labor Statistics reported that the consumer price index (CPI) rose 3% year over year in June, declining from 3.3% in May. This is the first time since May 2020 that the monthly rate has shown a decrease.
The Importance of Routine Vaccinations
The World Health Organization reports that vaccinations prevent between 3.5 million and 5 million deaths each year from diseases like diphtheria, influenza (flu), measles and tetanus. By staying updated with recommended vaccines, adults can significantly lower their chances of contracting preventable diseases and stay healthier for longer.
Legal Update: Final Rule Makes Extensive Changes to Mental Health Parity Requirements
On Sept. 9, 2024, the Departments of Labor, Health and Human Services, and the Treasury (Departments) released a final rule to strengthen the requirements of the Mental Health Parity and Addiction Equity Act (MHPAEA). According to the Departments, the final rule is designed to achieve MHPAEA’s purpose of ensuring individuals with private health coverage do not face greater restrictions to obtaining mental health and substance use disorder (MH/SUD) benefits than they would face for medical/surgical (M/S) benefits.
Significantly, the final rule adds protections against more restrictive non quantitative treatment limitations (NQTLs). For example, the final rule requires group health plans and health insurance issuers to collect and evaluate data related to the NQTLs they place on MH/SUD care and make changes if the data shows they are providing insufficient access.
Compliance Overview – Medicare Part D: Creditable Coverage Disclosure Notices Due Before Oct. 15
Employers with group health plans that provide prescription drug coverage must notify Medicare Part D eligible individuals before Oct. 15 of each year about whether the drug coverage is at least as good as the Medicare Part D coverage (in other words, whether their prescription drug coverage is “creditable”).
This notice is important because Medicare beneficiaries who are not covered by creditable prescription drug coverage and who choose not to enroll in Medicare Part D before the end of their initial enrollment period will likely pay higher premiums if they enroll in Medicare Part D at a later date. Thus, although there are no specific penalties associated with this notice requirement, failing to provide the notice may trigger adverse employee relations issues.
Client and Employee Resources
The more your employees understand your benefit plans the more they become educated, empowered consumers. The programs you provide will also gain an enhanced value.
As your strategic partners in employee benefits, we can provide multiple avenues of ongoing support, including:
- Employee Meetings (English and Spanish)
- Webcasts
- Payroll Stuffers
- Poster Campaigns
- Newsletters
Carrier Directories
E-Verify is a web-based system that allows enrolled employers to confirm the eligibility of their employees to work in the United States. Click the image below to begin.
