Rising healthcare costs, inflation, and retention challenges are driving employers to have strategic planning discussions ahead of 2024. Discover what’s hiking up costs for employer-sponsored healthcare before your open enrollment period begins.
1. Private health insurance premiums rose higher in Colorado this year than in every state except Georgia.
The surge in private health insurance premiums in Colorado this year, second only to Georgia, has substantial implications for employers’ bottom lines. As the cost of health coverage escalates, businesses in Colorado are grappling with increased financial burdens, impacting their overall operational expenses and profit margins. Employers, already navigating economic challenges, now face tougher decisions regarding employee benefits, potentially leading to cuts or adjustments. The heightened premiums create a delicate balancing act for businesses striving to provide competitive compensation packages while controlling costs.
2. Costs are rising due to several factors. The four biggest are:
- 22% Increase in utilization due to chronic health issues
- 19% Increase in catastropic claims
- 16% Rise in prescription drug and gene therapy costs
- 14% Increase in medical provider costs
3. In 2022, on average, employers annually paid $6,584 per employee for single coverage and $16,357 for family coverage.
In 2022, employers bore the financial responsibility of an average annual expenditure of $6,584 per employee for single health coverage and a more substantial $16,357 for family coverage. The average family premium has increased 20% since 2017 and 43% since 2012. (Source: KFF 2022 Employer Health Benefits Survey)
4. Excluding wages, healthcare is the most expensive employer-sponsored cost.
Excluding wages, healthcare stands out as the most substantial employer-sponsored cost in today’s corporate landscape. With the constant rise in medical expenses, employers are grappling with the financial burden of providing comprehensive healthcare benefits to their workforce. The intricacies of healthcare coverage, including insurance premiums, wellness programs, and other related expenditures, contribute significantly to the overall cost of maintaining a healthy and productive workforce. As companies navigate the complexities of healthcare reform and the evolving landscape of employee well-being, finding cost-effective solutions without compromising quality has become a priority for many organizations striving to balance employee needs and financial sustainability.
5. Employer-covered healthcare is the #1 benefit employees want from employers, with life insurance rated #2.
In the world of workplace benefits, employer-covered healthcare reigns supreme as the top priority for employees, reflecting the fundamental importance placed on health and well-being. Comprehensive health coverage not only serves as a testament to an employer’s commitment to its workforce but also addresses a need shared by employees across various industries. Following closely behind, life insurance claims the second spot in the hierarchy of coveted benefits, underlining the workforce’s recognition of the significance of financial security and protection for themselves and their families.
Master Open Enrollment with a Local Colorado PEO
Whether aiming to attract top talent or secure competitive rates, partnering with Obsidian HR is a game-changer. Access comprehensive benefits, expert negotiation for cost-effectiveness, and local support tailored to Colorado’s unique business landscape. Seize the open enrollment opportunity to empower employees with informed decisions on health and voluntary benefits. With Obsidian HR as your ally, confidently navigate the process, ensuring your team receives the support they need for the upcoming year. Contact us today to learn more!
