Smart Benefits: Survey Reveals Employees and Taxpayers Hit Hardest

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Monday, October 28, 2013

Amy Gallagher, GoLocalWorcester Business/Health Expert

Last week, United Benefit Advisors released the results from its 2013 Health Plan Survey, the nation's largest health plan benchmarking survey with nearly 11,000 employer responses. The survey, now in its ninth year, looks at national and regional trends in plan designs and cost-sharing offered by employer-sponsored plans.

Highlights of the most recent survey results follow.

Employees with Families Pay More

Employers are increasing their share for single plan coverage, but decreasing their contribution towards family coverage. Employers covered 18% more of a single plan in 2013, increasing their contribution from $5,184 in 2012 to $6,118 in 2013. For family coverage, employees paid 3% more, paying $1,110 in 2012 versus $1,151 in 2013.

Plan Designs Changes Hold Premiums Flat

In exchange for employers holding premium costs flat, employees are absorbing higher deductibles, increased out-of-pocket expenses and more coinsurance. For example, nationally, coinsurance dropped from 90% coverage to 80%. However, in Rhode Island and Massachusetts, employers are still offering better coverage with coinsurance levels at 100%.

Four-Tier Rx Coverage Now the Norm

Another way employers are adjusting their coverage is with prescription copays, most notably, with four-tier drug plans. In 2013, there was a 27.9% increase in employers adding a fourth tier copay, up 13% since 2012. This plan design enables employers to pass on the cost of the most expensive drugs, mostly used to manage long-term chronic illness, by segmenting them into the highest cost category.

Taxpayers Pay More for Municipal Employees

At a time when employees are absorbing more costs for their own healthcare, they are also bearing more as taxpayers by assuming a higher percentage of costs for employees who work in the public sector. The survey revealed that the portion of the costs of an employer-sponsored health plan covered by a government/education sector employee decreased nearly 30%, or $1,025 since 2012, for a single employee, while taxpayers assumed an additional cost of more than 24% for those workers.

Employers not Ready to Send Employees to Exchanges

Despite employers asking employees to pay more, most employers don't seem ready to eliminate coverage and send employees to the public health exchanges. The survey showed that only 3.5 percent of employers offered payment in exchange for opting out of coverage in 2013, compared to 3 percent in 2012. And employees didn’t appear eager to leave, either. The average monthly waiver bonus amount in 2013 was $127 per month for single coverage and $154 for a family plan. To those employees it was offered to, only 23% accepted the payment in 2013, compared to 20% in 2012.

 

Amy Gallagher has over 21 years of healthcare industry experience guiding employers and employees. As Vice President at Cornerstone Group, she advises large employers on all aspects of healthcare reform, benefit solutions, cost-containment strategies and results-driven wellness programs. Amy speaks regularly on a variety of healthcare-related topics, and is often quoted by national publications on the subject matter. Locally, Amy is a member of SHRM-RI, the Rhode Island Business Group on Health, and the Rhode Island Business Healthcare Advisory Council. 

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