Costs Continue to Rise for Employee Health Benefits

In related news, the cost of claims continues to rise in employer-sponsored health plans, according to a survey of more than 70 insurance companies by Wells Fargo Insurance. Although rates remain consistent compared to six months ago, overall claim costs will continue to increase in the high single digits next year. The Wells Fargo Insurance Employee Benefits Survey was conducted between July and August 2012.

Dan Gowen of Wells Fargo Insurance said, “Despite ongoing efforts to control healthcare expenses insurers are not expecting a drop in claim costs for 2013. This means that employer premiums will likely rise; it’s also likely that consumers may pay more for their share of employer-sponsored healthcare plans. Employers seeking to minimize cost increases should explore more sophisticated ways to maintain and improve the health risk of employees and maximize their benefit investment.”

The survey also found that dental cost trends are lower than medical trends due to lack of cost shifting from public to private plans and a negative cost impact from improvements in the dental technology field. Finally, survey results indicate that prescription costs are down slightly, due to greater availability and the use of generic drugs.

Reflecting claim activity over a six-month period, the following are expected increases in the national average cost of claims:

• HMOs – 8.5%
• Point-of-sale (POS) – 8.7%
• PPOs and consumer driver health plans – 9.3%
• Exclusive provider organizations (EPO) – 9.4%
• Indemnity plans – 10.2%
• Prescription plans – 7.6%

In addition to healthcare reform provisions, claim trends are influenced by price inflation or deflation (changes in unit prices for the same services), increased or decreased use of services, population age, benefit design, changes in provider treatment patterns, improvements in technology and drug therapies, and cost shifting. For more information, visit

Last Updated 05/25/2022

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