Trucks at Work
Another worry for truckers: higher health insurance costs

Another worry for truckers: higher health insurance costs

Right at the moment when truck driver health as well as correlations between driver health and safety are becoming more prominent in trucking, the cost for companies to provide health insurance is undergoing a big jump this year – even as a growing majority of U.S. employers view health insurance as a key benefit in terms of recruiting and retaining workers.

A recent survey of more than 3,000 U.S. employers by the Arthur J. Gallagher & Co. consulting firm found that 54% are paying at least 5% more for employee medical insurance this year, with nearly one in four suffering from increases of at least 10%.

Yet what the firm dubs a “decisive” majority of 67% agreed with the statement that “medical and pharmacy benefits are the cornerstone of their employee benefits package, and therefore an important tool to recruit and retain talent in a tightening labor market.”

The problem is it’s the most expensive benefit employers provide, noted James Durkin, Jr., president of Gallagher Benefit Services, in the company’s 2016 Benefits Strategy & Benchmarking survey.

"Healthcare is the primary focus of cost-control efforts because it represents the majority of an employer's benefits spend," he explained. "Employers should be deliberate about the changes they make to preserve the benefits most coveted by existing employees. Becoming a ‘destination employer’ requires an open mindset about new and emerging options for curtailing healthcare costs. This approach enables companies to redeploy those funds into other employee-centric benefits that are a differentiator in the ongoing war for talent."

So: how to control health care costs while still offering it as an enticing benefit? Here are some of the approaches Gallagher’s survey said are poised for “significant growth” over the next year and a half.

  • Telemedicine, now used by 24% of employers to provide employees with quick access to affordable care, is predicted to reach 42%.
  • Narrow network healthcare plans that limit the number of providers, preferably based on quality of care and cost-effective outcomes, show a growth trend from 18% to 27%.
  • Consumer-directed health plan survey findings forecast a rise in adoption from 36% to 51%.
  • Self-insuring, another increasingly popular method of reducing costs, is expected to grow from 28% to 38%.

Employers are also exploring less common options to rein in costs, Gallagher found, with some using “defined contribution arrangements” to give employees a set amount of funds to buy their own insurance – and access to a private exchange. Although fewer than 5% of employers have adopted these arrangements, that figure is expected to triple by 2018, according to the firm’s research.

Gallagher also noted that the “best in class” approaches to healthcare cost management focus on what the firm called a “comprehensive, data-driven and multi-year approach” to compensation and benefits planning.

Yet according to survey findings, just 8% of employers use a “multi-year planning process” with multiple data inputs, while three-quarters (76%) plan their benefits year-to-year, putting them in a “reactive position” and thus leaving them less able to manage costs.

Just one more headache trucking executives need to handle.

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