Prior to the pandemic, medical costs for employers projected to increase minimally in 2020

7 December 2020 —
Global broker Aon plc, reports that its large employer clients budgeted on a pre-pandemic basis an average of USD 12,091 per employee for health care costs this year, up 1.8% from 2019.

Aon mentioned the analysis uses the firm's Health Value Initiative database, which captures information for more than 600 U.S. employers representing 5 million lives and USD 64 billion in annual costs.

"Employer health plan costs were budgeted to increase at the lowest rate in more than a decade prior to the COVID-19 pandemic, which further suppressed medical claims for most employers. In a separate analysis, Aon surveyed the projected impact of COVID-19 from the carriers' perspectives and found that the U.S. medical plan cost per employee for 2020 is projected to be 5 percent lower than initially expected due to COVID-19.

In terms of 2020 plan costs, employer costs were budgeted to increase modestly at 2.1%, while employee premiums from paycheck were slated to be nearly flat (+0.4%) from 2019. Plan costs represent the employer's and employee's combined premiums for medical and prescription drug costs but exclude employee out-of-pocket payments such as deductibles, copays and coinsurance. On average, employers subsidize about 80% of the plan cost, with employees paying the remainder", as Aon mentioned in a statement.

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