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TBRNews:
How Do Your Plans Compare
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August, 2016
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Medical costs continue to increase faster than inflation. Most companies anticipate a 5-9% increase in medical costs. In 2015, the average medical plan increase was 7.9% before plan changes, and 4.5% after plan changes.
The number of medical plan options companies offer has increased, especially for large employers. Companies are using options as a way to optimize discounts by offering network alternatives and/or to meet the needs of a diverse workforce.
What plans do employers offer?
* 83% offer a High Deductible Health Plan (HDHP);
* 56% offer H.S.A (Health Savings Account Plan);
* 18% offer an HRA (Health Reimbursement Account). The average HRA contribution is $538 for single and $1,126 for family
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| Plan Design Trends |
Employers continue to consider cost shifting through plan design (changes in medical design, increasing prescription drug costs), increasing employee contributions or moving to a defined contribution approach to control healthcare costs.
Employers are also considering high performance networks, value based plan design, and Accountable Care Organizations (ACO).
Prescription Drug features:
* 35% apply a combined medical/pharmacy deductible
* 54% do not apply a deductible on pharmacy claims
* Mail order copays continue to increase as RX cost increases
Employers are especially looking for ways to control specialty drug costs. The most common cost control strategies are: clinical prior authorization (74%), step therapy (67%), and quantity limits (63%).
Plan Design Features:
* On average, an employee's contribution towards the premium is 24% for individual coverage and 28% for family coverage.
* 43% have a deductible of $1,000 or more
* 22% of employers have a smoking surcharge
* 14% is the average reported in-network coinsurance, most employers offer 20% coinsurance
* 56% use copays for in-network emergency room visits
* $24 is the average in-network copay for primary care office visits
* $36 is the average in-network copay for specialist office visits
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| Other Benefit Highlights |
Dental Benefit Highlights: (Plan designs remain consistent.)
* Deductible and coverage most common: $50 deductible and $1,500 annual benefit maximum
* Most common plan design 100% Preventative/Diagnostic/ 80% Restorative/ 50% Major Restoration
* Employees, on average, contribute 44% of total premium for single and 48% for family coverage
Other:
Paid Time Off (PTO) banks are used by 44% of employers
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| Wellness Program Highlights |
73% of employers offer a wellness program.
The most common programs are: Employee Assistance Program (90%), biometric screening (82%), health risk questionnaire (80%), Body Mass Index- BMI (67%), and tobacco cessation (66%).
Most employees have access to a broad array of wellness programs and tools. However, participation for these programs are below 30%, and only 10% of employers offering wellness programs measure the ROI on them.
Success requires participation by all parties and that continues to be a challenge.
Based on the Touchstone 2015 survey of over 1,150 employers in 36 different industries across the US and the Kaiser Families Foundation 2015 survey
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For more information visit our website at:
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This update is a publication of TBR Associates, designed to highlight employee benefit matters of interest to our readers. The information contained in this publication is meant for general educational purposes only.
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