Mercer: Employers planning investments in new worker supports amid slower health benefit cost growth

Due to COVID-19, many employers are seeking to avoid large health benefit cost increases and invest in supports for workers, according to a new survey from Mercer.

Health benefit costs overall grew by an average of 3.4% this year, the survey found, while costs for large employers with 500 or more workers grew by 1.9%, the lowest increase since 1997. As most large firms provide self-funded benefits, decreased care use due to the pandemic allowed for notable savings.

Tracy Watts, a senior consultant at Mercer, told Fierce Healthcare those savings enabled these companies to pass on big deductible or premium hikes.

"Certainly that enabled employers to stay the course," she said. "We haven't seen that low of an increase in quite a while."

RELATED: As employers gear up for open enrollment, here are the trends to watch

A key focus in those investments, according to the survey, is behavioral health, which was a priority for employers before the pandemic and has only been further highlighted because of COVID-19.

Seventy-five percent of surveyed employers called behavioral health a priority, and it ranked first among 11 options in the survey by a wide margin, Mercer said. More than a quarter (29%) said they have already given managers formal training in supporting employees' mental health needs.

In addition, 24% said they are planning to offer such training, according to the survey. Nineteen percent said they will add programs or services to expand behavioral health access in 2021.

Another area employers are watching closely according to the report is telemedicine and virtual care, the use of which has risen dramatically under the pandemic.

RELATED: COVID-19 is pushing employers to offer new virtual care offerings, survey shows

Mercer found that in 2019, just 9% of employees took advantage of telehealth benefits, a figure that jumped to 14% in the first half of 2020 and will likely grow further still in the latter half of the year.

The concern moving forward, Watts said, is how reimbursements for virtual care will be handled in the long term. Under the pandemic, providers were often paid at the same rate for a virtual visit as they would be for an in-person office visit.

However, a doctor can't perform all of the same things he or she might do during in-person visit, namely a physical exam. Watts said employers are very focused on ways to potentially "right-size" those costs once the pandemic ends.

Conversely, there is a significant push from providers to continue these reimbursement rates in traditional Medicare, Watts said.

"That might make sense for Medicare, but on the commercial side I think employers really need to question the value of that," she said.

In addition, the growth in use of these virtual visits is spurring conversation on the challenges in paying for them in a fee-for-service environment, Watts said. It may cost a physician more to document and bill for a virtual visit than they will get for the visit in reimbursement.