Employer Health Benefits Spending Will Normalize in 2022

By Kelsey Waddill

In 2022, health benefits spending will return to normal, pre-pandemic levels in 2022 by increasing by an average of 4.7 percent over 2021 healthcare costs, employers anticipated in Mercer’s National Survey of Employer-Sponsored Health Plans 2021.

The organization has surveyed slightly over 1,500 employers since June 2020 in order to assess the state of employer healthcare coverage.

The return to normal levels is largely motivated by a return to normal healthcare utilization levels among employees. Health benefit spending dropped in 2020 due to the dramatic decline in healthcare utilization during the pandemic as in-person care shut down.

In 2022, the healthcare system may start to experience the downstream effects of deferred care—typically associated with higher costs—in addition to a host of uncertain factors such as the cost impacts of genetic therapies, labor shortages, wage inflation, regulations, supply limitations, and long-term coronavirus care.

Employers did not raise cost-sharing in 2020 due to the coronavirus pandemic, although some researchers predicted that even stable premiums and deductibles would be more financially unsustainable for employees in 2020 and 2021 due to the pandemic’s economic impacts.

However, employer survey participants indicated that they intend to keep employee cost-sharing and, by extension, out-of-pocket healthcare spending low in 2022.

“Employers understand that healthcare affordability is a real issue for many employees, especially for lower-wage workers,” said Tracy Watts, national leader for healthcare policy at Mercer. “They are looking at a range of strategies that will keep more money in employees’ paychecks and remove cost barriers when care is needed.”

Half of the larger employers surveyed and 65 percent of all companies with 20,000 employees or more stated that one of their goals for the next three to five years was lowering healthcare costs for employees. 

Employers recognize this as a way to combat social determinants of health barriers and health inequities. Employment and economic stability fall under one of the five domains of social determinants of health because restricted finances often can lead to deferred care.

“With more employees working remotely, employers are turning to a broader range of options to support workers who will no longer have access to worksite-based offerings such as subsidized healthy food choices in cafeterias or onsite gyms,” the press release noted.

Approximately a fifth of employers reported that they would be leveraging benefits for employees who work remotely in 2022 and a quarter of employers are using virtual care to connect remove employees with healthcare.

Over three-quarters of the larger employer respondents stated that mental and behavioral healthcare benefits will be a priority for them in the next three to five years, with about three in ten employers stating that virtual behavioral healthcare would be part of their solution.

“These programs have made a big difference by removing geographic barriers to provider access and improving engagement with more affordable pricing and the convenience of virtual care from anywhere – with no travel time needed,” says Watts.

Virtual care, remote working environments, social determinants of health, and the continued impacts of the coronavirus pandemic will all have a role in how healthcare spending develops for employer-sponsored health plans in 2022.

Employees are looking for more than just lower costs of care, although that is certainly a priority according to a Marathon Health survey. They also want onsite care, a stronger relationship with providers whether in-person or via virtual care, more chronic disease prevention support, and more mental healthcare benefits.

Despite the desire for improvement, 63 percent of employees in employer-sponsored health plans expressed that they were very or extremely satisfied with their health plan and more than six in ten respondents were satisfied with their healthcare benefits, according to a survey from the Employee Benefit Research Institute.