2021 Projected Health Plan Costs

A few weeks ago Stephen Miller, CEBS, wrote an excellent SHRM article on projected health plan costs for 2021.  Mr. Miller referenced a new survey conducted a few months ago by the nonprofit Business Group on Health (BGH). The survey garnered 122 large employers offering coverage to more than 9.2 million employees and dependents.  Over two-thirds of the responding companies each have more than 10,000 employees.

The projected increase in health benefit costs is expected to increase by 5.3 percent for next year.  This equates to a projected per employee cost of over $15,500 which includes premiums and employees’ out-of-pocket costs.  The survey indicated that large employers paid 70 percent of these costs and the employees cover the remaining 30 percent.  Thus, the large employers will be covering around $10,850 and the employees $4,650.

Given the significant health care cost outlay that large employers are providing, the survey also listed several priorities for 2021 to mitigate next year’s increase as well as overall health plan costs.  The items below would be good for all employers to focus on in 2021.

  • Offer more types of virtual care/telehealth services
  • Expand access to mental health services
  • Focus strategy on moderating high-cost claims
  • Offer care through centers of excellence for additional conditions
  • Adopt networks of high-performance health care providers
  • Link health care with workforce strategy
  • Focus on primary care
  • Address high-cost drug therapies

Learn more by visiting www.johansongroup.net or www.dbsquared.com or request a free consultation by visiting https://www.dbsquared.com/consultation-request-2/.

Human Resources Focus for 2019 and Beyond

  • Enhancing Employees’ Experience
With direction and support of the human resources team, the company culture will focus on tangible and intangible employee experience offerings that enhance the attraction and retention of top performing employees.  Meaningful company purpose, work focus, societal partnership, team and individual recognition, work-life balance, digital friendly technology and competitive and fair total rewards packages will encourage retention of millennials, the largest demographic in the current U.S. workforce.
  • Continuous Employee Development
With low unemployment and a shortage of skilled and competent applicants, human resources will need to focus more on recruiting from within their organizations for needed talent.  A greater emphasis on creating a culture of continuous employee development and retention will help to mitigate the lack of externally qualified candidates. On-going semi-annual employee development assessments and performance feedback sessions will replace stale employee annual performance appraisals.
  • Internal Talent Agents and Career Ladder Experts
Human resources professionals will become internal talent agents working with company talent mentors and brokers to fill every-changing talent voids and projected needs.  Human resources will work closely with company leaders to forecast and deliver internal human capital resources to meet organizational needs based on growth and change.  Human resources will prepare and provide career ladder scenarios and pathways for employees and offer various internal talent pool plans to meet company forecasted needs.
  • Customizable Compensation and Benefits Packages
Compensation, benefits and perks (total rewards) will become more customizable to meet individual needs of a more diverse workforce.  Total rewards packages to attract, motivate, engage and retain employees will have great flexibility and variability. Total rewards software platforms and applications will help human resources and employees manage their respective compensation and benefit plans. Learn more by visiting www.johansongroup.net or www.dbsquared.com or request a free consultation by visiting https://www.dbsquared.com/consultation-request-ty/.

Strategic Total Compensation Packages

Strategic Total Compensation Packages

Our compensation management consulting includes working with private and public organizations. The public organizations include cities, counties, utilities, school districts, and libraries. Often, we hear the public organizations’ authority councils, quorum courts, and boards request the total compensation strategy of lagging the market pay average due to significant employer contributions made to the employees’ defined benefit retirement plans and in some instances higher cost-sharing percentages for employee health insurance premiums.

Private and public organizations need to evaluate their respective total compensation plans (wages and benefits) to become more strategic due to the increasing demand for employees with skills and competencies to help the organizations achieve current and future goals and services.

Most public organizations with defined benefits retirement plans are contributing double-digit percentages of employees’ base wages to these unfunded liability plans.  This benefit has greater value and meaning for existing employees with five or more years of service with the public employer.  For new employees entering the workforce, the defined retirement benefit may not attract skilled workers, competent professionals, and potential managers and leaders who have various options to join private employer businesses. The private businesses have the resources to offer higher initial wage/salary offerings, variable and bonus pay plans, defined contribution retirement plans with a profit sharing component and opportunities for greater income growth through internal position promotions and efforts to pay employees at the market pay mean within three to five years.

Total compensation packages are becoming more strategic and variable as demand for talented and skilled workers exceeds the supply.  We encourage both private and public employers to stay competitive with their employee base wage/salary structures and benefit offerings.


Download our free HR Guide to a Compliant, Equitable & Competitive Compensation program on the right or click below to contact us for a free demo!

Compensation and Benefits Highlights from the 2017 Annual Surveys

Compensation and Benefits Highlights from
the 2017 Annual Surveys Completed by Johanson Group

 Employee pay adjustments for 2017 will average 3% and merit pay budgets will average between 3.1% and 3.4%.

  • The average employee base pay adjustments for 2018 will increase slightly due to increasing employment demand.
  • Employee average merit pay budgets in 2018 will range from 3.2% to 3.6% but employers are moving forward with increasing variable pay options.
  • National variable pay averages have increased to new levels as employers reward top performers.
  • Employers are beginning to utilize compensation and benefits strategically to attract and retain competent employees.
  • Above average retirement plan matching contributions by employers and profit sharing distributions are effective employee retention tools.
  • Employers will help employees with student loan debt through creative compensation and benefit packages.
  • Health insurance premium increases are partially mitigated by High Deductible Health Plan (HDHP) options with increasing deductibles and out of pocket maximums.
  • Employers are using HSA contributions to help new employees with minimal personal savings to be prepared for unexpected medical expenses.
  • Paid Time Off (PTO) plans are becoming more popular with employers over traditional sick and vacation time off plans.


Download our free HR Guide to a Compliant, Equitable & Competitive Compensation program on the right or click below to contact us for a free demo!