CONTINUED HIKES IN HEALTHCARE COST FORCE EMPLOYERS TO SEARCH FOR SOLUTIONS By Rachael Pfenninger, Director of Strategic Execution, AMBA
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n AMBA’s recent 2021 Business Forecast Report, mold manufacturers indicated that, on average, healthcare costs accounted for 20% of total company expenditures. This is shockingly high when compared to recent data from the National Compensation Survey (NCS) program, which reported that healthcare costs constituted an average of only 8% of total compensation for civilian workers in March 2020.1 It also indicated that for the mold manufacturing community, mitigating healthcare costs that continue to rise year-overyear is becoming an urgent priority, particularly in an industry recovering from months of COVID-19-related environmental and economic challenges. To address this area of interest and provide urgently needed insight and guidance, AMBA again has benchmarked the costs and plan offerings of mold manufacturers in its second annual 2021 Health and Benefits Report. To provide additional perspective, the AMBA benchmarking team worked alongside the Manufacturers Association for Plastics Processors (MAPP) and the Association of Rubber Products Manufacturers (ARPM) to expand the report scope, which is inclusive of yearover-year increases, cost mitigation strategies and more. MANUFACTURERS CONTINUE TO BATTLE RISING HEALTHCARE COSTS According to numbers reported during this benchmarking effort, which collected data from more than 200 companies and represented nearly 27,000 fulltime employees, eight out of 10 executives indicated that their health insurance rates increased in 2020. More alarming is that, while 38% of these executives reported a rise that ranged from 6% to more than 30%, 47% anticipate a similar rise in 2021. With an average enrollment of 70%, the total average annual company cost to provide medical
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the american MOLD BUILDER | Issue 2 2021
benefits (inclusive of all three industries) equaled $727,000, with an average cost per participating employee per year (PEPY) of $10,143. While the perspective of all surveyed manufacturers is helpful to understand, it is important to note that the mold manufacturers segment only averaged an annual average cost of $384,000 (a slight decrease from 2020 data). The average cost per PEPY also differed significantly from the overall report results. While the average cost PEPY in this year’s report equaled $10,143, surveyed mold manufacturers continue to pay approximately $11,150 PEPY, equal to 10% more than the average manufacturer surveyed. A deeper dive into the specific data for mold builders surveyed in this report revealed that this incremental cost largely can be attributed to the contract type as more than eight out of 10 executives use “fully insured” health plans, which have higher costs due to no sharing of risk between plan sponsors and plan providers (aka insurance companies). RIPPLE EFFECTS OF WORKFORCE REPRESENTATION One significant factor that may contribute to rising healthcare costs for many manufacturers (and mold builders, in particular) is the trend data associated with employee representation by age group. For instance, as the workforce representation rose
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