True Trend to be 7% in 2014

This is from David McCann at CFO.com: 

The underlying cost trend for this year is actually an increase of 7 percent, according to the survey, which included responses from 595 companies with at least 1,000 employees. But the average large company will bring that down to the 4.4 percent level by taking steps like redesigning its plans (for example, increasing employees’ deductibles and copayments) and lowering plan contributions. The share of costs borne by employees, including premiums and out-of-pocket costs, has inched up from 34.4 percent in 2011 to 37 percent this year, the survey report notes.

This year’s minimal acceleration in corporate cost growth carries a caveat: much or all of it may be attributable to some costs related to the Affordable Care Act (ACA). The big one is the new transitional reinsurance tax meant to defray the government’s costs of setting up and subsidizing the new public health-insurance exchanges. In 2014 all companies (both self-funded and fully insured ones) will pay $63 for every employee and dependent covered under an employer-sponsored health plan. ...

At 4.4 percent, health-care cost hikes are well more than double the current inflation rate of about 1.6 percent. That’s hardly a new trend. ...