This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Mercer: Businesses Will See More Workers Enrolling for Health Insurance

NEW YORK ( TheStreet) -- Whatever your political leaning, it is fair to say Obamacare is a wild card right now, with few insurance industry experts exactly sure what's going to happen with the Affordable Care Act over the next year.

But cost-wise, the data are already rolling in -- and it's showing a significant rise in health benefit costs for employers next year after a pre-ACA incremental increase this year.

Those cost estimates come from Mercer, a New York City global management consulting firm, and its National Survey of Employer-Sponsored Health Plans.

The survey's main takeaway is that with an increase in the number of workers enrolling in coverage comes an increase in health care cost per employee -- 5.2% next year, compared with a 2.1% increase this year (when, in dollar figures, the average per-employee cost is at $10,779 including employer and employee contributions at companies with 10 or more workers).

But many U.S small companies, for example, are keeping a lid on health care costs by steering staffers into high-deductible plans -- a big reason small businesses saw their health care cost rise by only 1% this year. It's a trend Mercer expects to continue, and one that should have consumers who work for small companies digging deeper to pay for out-of-pocket expenses for health care services from high-deductible plans.

Mercer reports the average health care plan deductible rose 15% this year, to $1,663 per employee. That's fine for businesses, but left unsaid is how consumers will cope with paying higher deductibles.

"The good news is that employers have already taken decisive action to slow cost growth so they will be in a better position to handle the challenges ahead," explains Julio A. Portalatin, chief executive at Mercer. "But the impact of the ACA on enrollment levels remains a huge question mark."

Another big trend going into 2014: Employers of all sizes will increasingly rely on consumer-directed health care plans, which will help them comply with mandates from the ACA (if those employer mandates aren't suspended or delayed by Congress in the coming weeks.)

CDHC plans are designed to make consumers more involved and more aware of health care costs, and usually carry higher deductibles (causing budget-conscious-consumers to pick and choose where their predeductible dollars are being spent). Many plans also come with a savings account element to encourage plan holders to build a "rainy day" fund to help pay for health care services.

Mercer says consumer-directed plans with a savings account element cost companies between 17% and 20% less than standard employer-sponsored health care plans.

Consumers should expect to see more of those plans as companies seek shelter against a 40% tax on so-called "Cadillac" health care plans -- plans that cost more than $10,200 for an individual or $27,500 for a family -- starting in 2018. With about 33% of U.S. companies in danger of triggering that tax, firms will be looking to cut health care benefits, thus sending more workers into CDHC plans.

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs