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Press Release

Employers to tackle employee healthcare affordability amid rising costs

April 26, 2022

Nearly all employers expect to offer virtual care to meet demand for medical and behavioral health services, WTW survey finds
Health and Benefits
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ARLINGTON, VA, April 26, 2022 — The vast majority of U.S. employers (94%) say managing healthcare benefit costs will be their top priority over the next two years, followed by enhancing mental health benefits (87%), according to a new survey by WTW (Willis Towers Watson, NASDAQ: WTW), a leading global advisory, broking and solutions company. And with health cost increases showing signs of accelerating, employers are boosting efforts to make benefits more affordable and are elevating employee awareness of what benefits are offered and how best to access them.

The pandemic and the shift to remote work have contributed to a worsening of mental health among employees and their families. In response, two-thirds of employers surveyed (66%) said ensuring that their health and wellbeing programs support remote workers will be a key priority of their healthcare strategy over the next two years; 62% plan to enhance programs and wellbeing activities to focus on health issues of family members.

When asked what their greatest challenges will be to effectively deliver on their healthcare strategy over the next two years, 73% cited increasing healthcare prices due to rising inflation and provider consolidation. More than half (54%) identified lack of employee awareness about where to find programs to support their needs as a key challenge.

“Many employers find themselves in the middle of a perfect storm,” said Lindsay Hunter, senior director, Health and Benefits, WTW. “Inflation and rising healthcare costs, ongoing emotional and physical wellbeing needs, and attraction and retention challenges caused by a tight labor market are driving employers to carefully evaluate their benefit programs and strategies. In particular, they are looking for ways to make healthcare more affordable for themselves and their employees.”

Indeed, nearly two-thirds of employers (64%) will take steps to address employee healthcare affordability over the next two years. These approaches include improving quality and outcomes to lower overall cost (55%) as well as adding or enhancing low- or no-cost coverage for certain benefits (41%). Additionally, over the next two years nearly one-third (32%) of employers expect to make changes to their employees’ out-of-pocket costs, while 21% expect to make changes to their health plan payroll contributions.

The future of virtual care

As the pandemic subsides, virtual care is positioned to become an essential and long-lasting feature of employers’ healthcare strategies. By the end of 2023, most employers (95%) are expected to offer virtual care for medical and behavioral health issues, and 61% expect to offer lower cost sharing for virtual care. Over half (55%) think the expansion of virtual care will help decrease costs in the long run, and 50% think it will improve outcomes.

“The pandemic upended traditional healthcare and set us on a new path that includes virtual options, which proved to be highly effective during the pandemic,” said Julie Stone, managing director, Health and Benefits, WTW. “We expect more employers will embrace healthcare delivery innovations, such as virtual care for physical therapy and lactation counseling, to improve access and better manage their health costs.”

Other survey findings include:

  • Employer confidence in sponsoring healthcare benefits over the next 10 years is at its highest point in over 10 years (84% in 2022 versus 38% in 2011).
  • Employer interest in genomics benefits is increasing as testing options and treatments advance. For example, one in 10 employers (9%) currently offer genetic testing as a screening for early-stage cancer with another 5% planning to do so by 2023.

About the survey

A total of 636 U.S. employers participated in the 2022 Emerging Trends in Health Care Survey, which was conducted in March 2022. Respondents employ 10 million workers.

About WTW

At WTW (NASDAQ: WTW), we provide data-driven, insight-led solutions in the areas of people, risk and capital. Leveraging the global view and local expertise of our colleagues serving 140 countries and markets, we help organizations sharpen their strategy, enhance organizational resilience, motivate their workforce and maximize performance.

Working shoulder to shoulder with our clients, we uncover opportunities for sustainable success—and provide perspective that moves you.

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