Mercer survey shows employer health costs rise 5 percent in Minnesota

Oct. 31--Employer-sponsored health plans in Minnesota are reporting a 5 percent increase in benefit costs for active employees, according to survey results released Tuesday, as small employers nationally say they are feeling more cost pressures.

The survey from the consulting firm Mercer found that the average health benefit cost per active employee in Minnesota is now $13,228, with workers covering one-fourth of the total premium cost.

Mercer surveyed 60 firms in Minnesota as part of a national study that found the average total health benefit cost per employee is up 3.6 percent this year across the country.

"While overall cost growth remains moderate, averaging 3.3 percent annually over the past five years compared to 5.7 percent over the prior 10-year period, it continues to outpace inflation," the New York-based consulting firm said in a news release. "Sophisticated cost management strategies can be harder for smaller employers to implement, as they have fewer resources to devote to plan management."

Earlier this month, the California-based Kaiser Family Foundation issued its annual report on trends in employer-sponsored health insurance. The survey documented growth over several years in both health-plan deductibles as well as an increase in the average premium for family coverage to nearly $20,000.

In its report, Mercer said "more midsize and large employers are [forgoing] the short-term savings offered by cost-shifting and turning to strategies addressing care delivery and health management."

Smaller employers saw higher cost increases averaging 5.4 percent among those with 10 to 499 employees, Mercer said, compared with growth of 3.2 percent among midsize and large employers with 500 or more employees.

The survey found prescription drugs remain a big driver of costs among groups with 500 or more employees. Overall drug benefit costs in these health plans increased by 7 percent, Mercer said, while costs for specialty drugs increased by 12 percent.

In Minnesota, survey respondents said their overall costs would increase by 6.8 percent next year if they made no changes to their current health plan. But by making changes to cost-sharing requirements or insurance vendors, employers expect actual cost increases to come in at 4.8 percent.

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