The results of the 9th annual Arizona Employee Benefits Benchmarking Survey of mid-size employers (50-5,000 employees), showed that:
- 43 percent of employees in the Arizona survey are covered under lower-cost consumer-driven plans; 51 percent are covered under traditional copay type plans.
- In Arizona, the median deductible for traditional copay plans was $3,000 in 2022, a 50% increase from 2018.
- Median deductible for consumer-driven health plans (CDHPs) in Arizona increased to $3,500 in 2022, after being flat at $3,000 from 2017 through 2021. However, with the median employer contributions to healthcare accounts of $780 for individual and $1,500 for family plans as well as lower premiums for these plans, the net deductible for CDHPs was 35% lower for employee-only and 72% lower for family coverage than the deductible for traditional copay plans.
- National medians for both traditional copay and CDHPs were richer than Arizona median plans. However, this difference was more than offset by the lower median premiums paid by employers and employees in Arizona.
- Healthcare inflation for employee health insurance returned to 2020 levels in Arizona, after a decrease in 2021. After plan design changes, the median cost increase reported by employers for 2022 was 5 percent, compared to 4 percent in 2021.
- On a national basis, the amount spent on outpatient and pharmacy services has increased significantly. The percentage of healthcare costs for outpatient services increased from 19% in 2018 to 27% in 2022, with pharmacy spend increasing from 17% to 23% in the same period.
This benchmarking survey, conducted by Benefit Commerce Group, an Alera Group company, is in its ninth year of data collection. Participating Arizona employers so far this year represent over 88,000 employees and over $943 million in healthcare dollars spent. The survey was developed and tabulated by one of the world’s largest and most respected actuarial firms and is in its 20th year nationally.
“In these nine years, over 1,250 unique Arizona employers have participated in this survey,” said Scott Wood, Managing Partner & Principal of Benefit Commerce Group, which hosted the Employee Benefits Benchmarking Results Breakfast Seminar. “We are gratified that over 370 employers in Arizona have participated in the benchmarking survey so far this year. That is more than a 12 percent increase over 2021, which is exceptional given the current heavy burdens on business leaders and HR professionals. It is evident that the topic of employee benefits is a significant area of focus for employers today, both in terms of enhancing what employees receive and in controlling the costs for businesses and their employees and families.”
In addition to Arizona employers, the survey results include data from thousands of mid-sized employers nationally, representing over $43 billion of annual healthcare spend and more than 3.1 million employees at nearly 20,000 employers.
Over 220 people registered for this year’s Benchmarking Results Breakfast Seminar, including HR professionals, CFOs and CEOs.
Employers who participated in the benchmarking survey will receive individual custom report summaries. They also have the opportunity to access more detailed benchmarking, including data that compares their employee benefits programs to other employers in Arizona and nationally by company size, industry type and geography.
Arizona employers can continue to participate in this survey by visiting the Benefit Commerce Group website page.
In addition to the Benefits Benchmarking results, today’s Breakfast Seminar included healthcare industry updates and information on trends in employee benefits.
Healthcare Cost Headwinds
There are many factors impacting the rising cost of healthcare, including:
- Higher utilization due to “catch up” care
- Claims for long COVID
- New gene therapy and cellular therapies
- Continued introduction of new high-cost specialty drugs
- 40-year-high inflation broad impact
- Increases in healthcare worker wages and cost of medical supplies
COVID-19 Impact on Healthcare Costs
COVID-19 significantly impacted 2021 healthcare costs:
- Last half of 2021 saw higher costs
- Return of some care that was deferred during pandemic
- Ongoing costs of COVID-19: testing, treatment, vaccinations
- Increased mental health and substance use issues
- Worsening health of the population
What’s Trending in Employee Benefits
At the Breakfast Seminar, new trends for employee benefits were discussed, as well as the overall importance of benefits in attracting and retaining talent during the current “Great Shuffle” of employees moving to new opportunities.
“Mental wellbeing has become a real focus for many employers and employees,” Scott Wood said. “This has become an integral part of both employee benefits and company wellness programs. In addition, employees are getting back to ‘basics,’ by requesting or expecting more access to life insurance, disability insurance and supplemental coverage such as accident and critical illness insurance.”
Financial wellbeing benefits and the communication methods employers can use to educate their employees on their benefits were also discussed at the seminar.
Keynote speaker at today’s Benefits Benchmarking Breakfast Seminar was Dennis Ford, president of Quantum Leap Productions, with 30 years of experience crafting compelling videos and live meeting productions for businesses.
He is the author of #1 Bestseller on Amazon, Monetize Your Culture: How to Create a Passionate, Committed Workforce That Actually Increases Your Bottom Line…and Costs You Nothing.
In his presentation, he explained the value of creating a workplace culture of respect, trust, appreciation and happiness.
“87% of the American workforce is unengaged and unhappy,” Ford said. “And those employees are far less productive than they otherwise could be. Surveys also show that 75% to 90% of the workforce in our nation have one foot out the door, and employee turnover is very expensive for employers.”
He explained how workplace culture can “make your employees more engaged, more productive and more likely to stay!”
Seminar attendees received a free copy of Dennis Ford’s book, along with additional benchmarking information.