On average, US employers expect employee health benefit costs to rise 5.6% in 2023, according to early results from Mercer’s National Survey of Employer-Sponsored Health Plans 2022.

The projected increase reflects the changes employers plan to make to control expenses. However, if there are no changes, respondents indicated that the cost for their largest medical plan would rise by 7.0%.

“Because health plans typically have multi-year contracts with healthcare providers, we haven’t felt the full effect of price inflation in health plan cost increases yet,” Mercer Chief Actuary for Health and Benefits Sunit Patel said.

“Rather, [those effects] will be phased in over the next few years as contracts come up for renewal and providers negotiate higher reimbursement levels. Employers have a small window to get out in front of sharper increases coming in 2024 from the cumulative effect of current inflationary pressures.”

Patel noted that most large, self-insured employers are aware of their 2023 costs at present. However, many small, fully insured employers have not yet received renewal rates from their health plans.

“Those may well come in higher as insurance carriers hedge their bets in today’s volatile healthcare market,” Patel added.

Mercer’s report also found that for 84% of large employers with 500 or more employees “enhancing benefits to improve attraction and retention” was the most important strategy among nine benefit strategies, followed by “monitoring and managing high-cost claimants.”

The survey also found that over the next few years, improving access to behavioral healthcare, including expansion of employee assistance plan services and virtual behavioral healthcare options, will be a priority for 74% of large employers.

Additionally, only 36% of survey respondents cited making cost-cutting changes in 2023, down from 40% in 2022 and 47% in 2021.

Overall, the report noted that employers will not increase the employee share of the cost of coverage in 2023. Among large employers, employees will pay 22% of total health plan premium costs in 2023 through paycheck deductions, unchanged from 2022 and 2021.

The report draws responses from 864 employers. It was launched on June 22 and remains open. The final survey results will be released this fall.