America's Benefit Specialist October 2022

NOTEWORTHY

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percent had premium increases of 10% or higher. A quarter of employers enhanced the voluntary or supplemental aspects of total rewards to boost recruitment and retention objectives. Accident (67%) and critical-ill ness (61%) insurance consistently rank as top options. Meanwhile nearly half of employers provide permanent life (46%), hospital indemnity (45%) or cancer care (43%) insurance. Employee perks or discount programs are offered by 44% of organizations, legal services by 37%, identity theft protection by 35% and employee purchase programs by 29%. Looking ahead to 2024, traditional healthcare options such as critical illness (16%), long-term care (16%) and hospital indemnity (14%) coverage are slated for additional investment. Thirty-one percent (31%) plan to add pet insurance, a decision that reflects not only increased veterinary care costs but also the importance of pets to their owners. Gallagher’s 2022 U.S. Physical & Emo tional Wellbeing Report is based on data from the 2022 Benefits Strategy & Bench marking Survey, collected from more than 4,000 employers in the U.S. across a wide variety of industries from December 2021 to March 2022. AON: EMPLOYER HEALTHCARE COSTS PROJECTED TO INCREASE 6.5% NEXT YEAR Average costs for U.S. employers that pay for their employees’ healthcare will increase 6.5% to more than $13,800 per employee in 2023, according to Aon. This projection is more than double the three-percent increase to healthcare budgets that employers experi enced from 2021 to 2022 but is significantly below the 9.1 inflation figure reported through the Consumer Price Index. On average, the budgeted healthcare costs for clients is $13,020 per employee in 2022.

percent of all claimants but 25% of total medical plan claim expenses in a typical year. Visit www.segalco.com for complete details. EMPLOYERS ARE OFFERING FLEXIBLE BENEFITS TO CAPTURE THE INTEREST OF A DIVERSE WORKFORCE With nearly half of the 4,000+ U.S. employ ers surveyed experiencing turnover of 15% or more in 2021, retention and attraction are top priorities—and the tool employers are using to address this issue: flexible total rewards. Gallagher’s 2022 U.S. Physical & Emotional Wellbeing Report found that while 78% of employers are increasing salary budgets, up six percent from last year, they’re also recognizing the importance of changing benefits to appeal to a diverse workforce. In fact, the survey found that more than two in five organizations (42%) now offer medical coverage to domestic partners and about half as many (24%) ex tend this benefit to part-time employees. To meet the diversity of their employees’ needs, more employers are expanding health benefit offerings. Nearly half of employers (46%) now cover infertility services or fertility treatments. Fertility medications are the most common (77%), followed by a reproductive endocrinologist or infertility specialist evaluation (69%). Less popular benefits include surgery or intrauterine in semination (43% each) or cryopreservation (23%), which is the process of freezing eggs, sperm or embryos. Applied behavior analysis, a type of inter personal therapy where a child works one on-one with a practitioner, is the top elective service employers offered in 2022 (55%), up four points compared to the previous year. This indicates an increased awareness of the need for stronger mental health and emotional wellbeing support for employees and dependents.

Autism spectrum disorder treatment is covered by 45% of employers, up three points from 2021. Bariatric surgery (49%) is up two points from the prior year. Gender reassignment surgery (25%) and transgen der-inclusive benefits other than surgery (22%) each registered an uptick of two points. Gene therapy services (14%) gained four points. Among the 77% of employers that offer more than one plan, most provide two (35%) while the rest expand the selection to three (26%) or at least four (16%). Preferred provider organization/point of service plans are the most frequently offered (83%). However, the number of employers that pair a consumer-directed health plan (CDHP) with an HSA continues to rise, now 51%, an increase of five points from 2021. A CDHP+HSA is also slowly growing annually as the top choice from an enroll ment perspective, up four points since 2020. Individual plans usually have a deductible of $2,800 with an out-of-pocket maximum of $4,350. For family plans, the median deductible is $5,400 with an out-of-pock et maximum of $8,000. Typical annual employer contributions to the HSA are $500–$599 for individual plans (23%) and at least $2,000 for family plans (22%). Competitive pressures in the labor market have caused employers to hesitate when considering plan design changes that pass along cost increases to employees. Half of employers (50%) refrained from making any employee cost-sharing increases in 2022, which is slightly higher than each of the pre ceding three years. Among those increasing employee costs, health plan premiums were the most common target (44%), outpacing deductibles (13%) and out-of-pocket maxi mums (11%). The median health plan premium in crease was 4.0% to 4.9% at the most recent renewal. However, a notable 25% reported increases of less than one percent. Eighteen

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