3 Strategies for Reducing Benefits Costs in 2022
Health care costs continue to rise each year, and 2022 will be no exception. In the new year, experts predict a 6.5% increase in medical costs alone, according to PricewaterhouseCoopers. Employers are also anticipating health plan premiums to rise more than 5% in 2022, a Willis Towers Watson survey reports. With these increases in mind, employers will want to strategize methods to rein in benefits spending.
This article offers three ways to help.
1. Consider Alternative Plan Modeling
Instead of raising premiums, which may push employees away, employers can think about offering alternative health plan models. These include consumer driven health plans and various self-funded plan models. At their core, alternative plan models give more control to employees and employers about how health care dollars are spent.
2. Promote Health Care Literacy
The idea of health literacy is that if employees better understand their health care options, they can save more money and improve their overall well-being. Even limited health literacy can go a long way toward keeping health costs down in 2022. Arming employees with basic questions such as “How much will this cost?” and “Can I be treated in an equally effective but less costly way?” can help them take better control over their health choices and make wiser decisions.
3. Explore Telemedicine Solutions
In basic terms, telemedicine allows consumers to visit their doctor over the internet. These appointments are often much more affordable compared to in-person visits. As of mid-2021, 46% of consumers were using telemedicine to replace in-person health visits they had originally planned, according to a McKinsey and Company survey. Those figures are expected to rise in 2022 as the cost savings of telemedicine are more widely understood.
Cyber Market Primed to Grow and Eclipse Property by 2040: Gallagher Re
Following a pause to stabilize the vessel, the cyber market is poised for a wave of growth that could make it larger than the property catastrophe market by 2040, said Gallagher Re.
In fact, if the cyber market continues to grow at its current pace, it will exceed property or casualty in terms of annual reinsurance premium between 2032 and 2033, according to projections in a new report, “CY-FI: The Future of Cyber (Re)Insurance.”
Growth in the cyber market has been thwarted by a lack of capacity but cyber insurance carriers have engaged in an “underwriting revolution” as they reassess and re-underwrite portfolios, said Gallagher Re.
Rates have increased and the market is asking more targeted security questions of clients before giving coverage. Carriers have tightened terms and clarified or strengthened exclusions and coverage restrictions. Additionally, technology has been deployed by carriers to improve risk selection.
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No Longer ‘California Dreamin’?
We all know that the pandemic has changed our lives in many ways. We’ve learned to work from home, Zoom into meetings, juggle homeschooling and embrace grocery delivery. But, on top of changing how we live, it seems to be greatly affecting where we live too. In a phenomenon that many have dubbed the “Great Wealth Migration”, it seems many have decided to leave larger California cities for more rural, remote locations at a rapid pace. The Los Angeles Times reports that entrances to California from other states has dropped by 38% since March of 2020, while the number of residents leaving to other states has increased 12%. The counties that are seeing the largest exit of their population are San Francisco, Santa Clara, and San Mateo. New York is also seeing a big decrease in population, with roughly 70,000 leaving in 2020 according to Reuters.
So, what is driving these changes in population? For many, it’s driven by a change in the workplace; either losing a job or having the opportunity to work remote. For others, it’s the CA state income tax that drives people out of the Golden State. The cost of living is also a huge factor. Spectrum News reports that Texas is the most popular new home state for those leaving California, with a growth rate of 82,000 a year according to US census data. When you consider a home in Texas is 59% less expensive than California, it’s easy to understand why! Behind Texas in popularity are: Arizona, Nevada, Washington, Oregon, Colorado and Florida.
Whether moving to California or leaving, CAL can help with your insurance needs. Contrary to what our name might imply, we truly are Coast to Coast!