Relatively low medical cost inflation in 2017 will give employers a window to focus on longer-term solutions to the rising cost of healthcare: healthier employees and better management of chronic conditions.

These solutions require active engagement by employees. “The emphasis is shifting from tweaking the health plan design to improving employee engagement in their health,” noted Kimberly George, SVP, Corporate Development M&A and Healthcare at Sedgwick. The Affordable Care Act (ACA) both helps and hinders this effort, and employers will need to know how to manage the effects.

First the good news. Medical inflation is low and pushing the ACA excise tax back two years to 2020 will help to keep it that way. Many employers have an opportunity to keep employee healthcare costs flat in 2017, which helps build engagement.

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