OneExchange for Full-time Active Employees Holds Down Health Care Cost Increases

October 13, 2014

Towers Watson projects that total spending on health care by employers that participate in Towers Watson’s OneExchange for full-time active employees will grow just 1.8% from 2014 to 2015. That number includes both employer funding for coverage and employee contributions and out-of-pocket costs.

HealthCare-Spending-Gra

A growth rate of 1.8% is very close to the Consumer Price Index (CPI), which was 1.5% in 2013, and is significantly lower than both historical and projected market averages for health benefit cost increases. Keeping growth levels at or near the CPI is a must if employers are to avoid the PPACA’s excise tax on high-value health plans, also known as the “Cadillac tax,” which goes into effect in 2018.

By contrast, a 4% increase is expected in 2015 for midsize to large employers not using a private exchange but who are making some plan design changes. If employers make no plan changes, the projected increase is a 5.2%. Aon Hewitt recently announced a 5.3% projected cost increase in 2015 for employers using its private exchange.

For more on how OneExchange kept health spending growth low, click here for the full release.

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