Want to know what 2025 will look like?
BY KATHRYN MAYER
- Many needs, many models. This scenario is a natural extension of health care as many Americans know it. The scenario forecasts a shortage of primary care physicians, increased emphasis on disease prevention, growth in electronic medical recordkeeping, a shift from employee-based insurance to health insurance exchanges, and growing disparities in access to and quality of primary care based on income and where people live.
- Lost decade, lost health. This scenario forecasts a shortage of primary care physicians, declining income for practicing physicians and more uninsured patients, some of whom resort to black market care and unreliable online advice. Patients with good insurance have access to great care enhanced by advanced technology
- Primary care that works for all. This scenario assumes nearly universal health care coverage, with 85 percent of patients using integrated systems staffed by collaborative teams of health care providers, including physician assistants, nurse practitioners and health coaches who work closely with patients. Seeking to provide better care at lower cost while improving the health of the population they serve, primary care teams join with community partners to address factors that affect a community’s health, including employment, educational attainment, housing, transportation, and access to fruits and vegetables.
- Consumer is boss. Under this scenario, four of 10 patients opt for consumer-directed health plans, which include catastrophic insurance with high deductibles. For the most part, savvy consumers use advanced technologies, including noninvasive bio-monitors, as well as wellness and disease management apps, to stay healthy. Large vendors offer free avatar-based health coaching to consumers who purchase other integrated health products and services. Consumers shop for the best doctor and buy on the basis of high quality and low price.
Employees Placing Greater Reliance on Benefits
By Brian M. Kalish
Tough times have employees placing greater reliance on benefits for financial security, as employers affirm their commitment to sponsoring those benefits albeit with increased cost sharing.
That’s one upshot from the 10th Annual MetLife Annual Study of Employee Benefits Trends released Monday. It found that since 2002 employer’s top benefits objectives -- controlling costs, attracting and retaining employees and increased productivity – have remained fairly constant. However, some delivery aspects have changed, such as the growth of auto-enrollment features in 401(k) plans. For advisers, the trends seem to point toward stable expenditures for core benefits, but greater funding from employees, including voluntary benefit purchases.
Nearly half of the 1,412 employees surveyed said that, because of the economy, they are counting on their employer to help them achieve financial security through employee benefits such as disability and life insurance and health.
For younger generations, that number is even higher. More than half (55%) of Gen X and two-thirds of Gen Y workers said economic pressures leave them counting on employers’ benefits program to help with their financial projection needs, according to the study, presented by MetLife’s National Medical Director Dr. Ron Leopold, an EBA Advisory Board member, at a MetLife Symposium in Washington.
Employers say they are hearing these concerns and rising to the challenge. Regardless of company size, of all companies surveyed, only 10% said they planned to reduce their benefits.
“The workplace has changed rather dramatically over the last decade since MetLife began doing its annual study,” says Anthony Nugent, executive vice president of MetLife. “Ten years ago, many Baby Boomers were planning to retire at age 65, Gen Y workers were just entering the workplace, and communication vehicles like Facebook and Twitter didn’t exist.”
As employees rely more on benefits, they are willing to bear most of the cost of them. Of surveyed Gen X and Gen Y employees, 62% said they are willing to bear more of the cost of their benefits rather than lose them.
And that may happen. While a third of employees believe their employer is likely to soon cut benefits, 70% of surveyed employers said they intend to maintain their current level of employee benefits. However, 30% will do this by shifting costs to employees. Some 57%, are interested in a wider array of voluntary benefits offered by their employer, as compared to 43% of Baby Boomers. The study also found that employers recognize this interest as 62% of employers agree that in the next five years employee-paid benefits will become a more important strategy than they are today.
With the ever-changing benefit landscape, loyalty continued to fall. Only half (42%) of employees feel a strong sense of loyalty to their employer, a seven-year low. Conversely, 59% of employers said they feel a very strong sense of loyalty to employees. One in three people would like to work for a different employer in 2012, but that number climbs to one in two for Gen Y employees.
More than 80% of employers look to adviser for PPACA education
Beginning in 2014, the Patient Protection and Affordable Care Act requires employers with more than 50 employees to offer minimal essential health coverage to employees or be subject to a penalty. More than three-fourths of employers plan to continue to offer coverage for employees once this new requirement takes effect. However, a majority of respondents are also concerned about their ability to offer affordable health coverage to full-time employees.
The 2012 Health Care Reform Survey was conducted from January 6 to February 24 by Milwaukee-based Zywave, a software provider for the insurance and financial service industries. More than 7,800 employers nationwide participated in the survey.
Respondents are from 14 business sectors, with heaviest representation from services (18%), manufacturing (15%), nonprofit (11%), health care (10%) and construction (9%). Respondents spanned organization size: 43% with less than 50 employees, 17% with 50–99 employees, 27% with 100–499 employees and 14% with more than 500 employees.
Among those surveyed, 51% will definitely continue to offer health benefit coverage, 29 % will likely continue coverage, 3% will likely discontinue coverage and 1% will definitely discontinue or have already discontinued coverage. Meanwhile 19% are unsure what they will do when the requirement goes into effect in 2014.
“These findings are consistent with other recent surveys on the topic,” says Zywave attorney Erica Storm. “Given the uncertainty surrounding health care reform, employers do not appear eager to make big changes to their benefit offerings. Plus, employers remain concerned about competing for talent and seem nervous that dropping coverage could affect recruiting and retention efforts, despite other health care options provided for in the law.”
Other survey results include:
• 57% of employers responding are concerned about their ability to offer affordable health coverage to full-time employees.
• More than three-quarters of respondents have already seen an increase in their organizations health benefit costs or expect to see an increase as a result of PPACA provisions. Sixty-three percent of employers plan to pass these increases on to employees.
• PPACA requires group health plans that provide dependent coverage of children to make that coverage available to children up to age 26. In response to this requirement, 10% of employers surveyed increased the employee share of premiums or benefit costs for all coverage, 9% increased the employee proportion of dependent coverage cost and 2% eliminated dependent coverage.
• PPACA provisions that employers are most concerned about implementing and administering include: new reporting, disclosure and notification requirements (57%), the requirement to automatically enroll new employees in a health plan (40%) and additional W-2 reporting requirements (49%).
By Marli D. Riggs
Employers Continue to Look for Savings
The recent trend of shifting more health care and benefit costs to employees is showing no signs of letting up, according to new industry research.
A survey displayed that 22 percent of employers had medical deductibles of at least $1,000 this year for in-network services for their most popular plans, according to a report in Business Insurance, compared with just 8 percent in 2008. Twice as many employers (44 percent) imposed that deductible level on out-of-network services this year, the survey found.
"The biggest change in the past two years has been the increase in cost sharing with employees," said Michael Thompson, a principal. "Employers have been careful not to shift premium costs to employees, but have decided that the better way to shift costs is to require those who use health care services to pay more."
A separate report by Milliman also points to an increase in cost sharing in PPO family plans. According to Healthcare Town Hall, a website sponsored by Milliman, the survey found that the average premium cost of those plans this year increased $1,319, or 7.3 percent. Of the total cost increase, employers paid $641, while workers picked up the rest, totaling an increase of $275 in additional cost sharing and an additional $403 in payroll contributions..
Many employers, however, are searching for solutions beyond deductible increases. More employers -- especially midsize companies -- are turning to voluntary benefits to reduce their burden while still offering valuable benefits to their employees, according to a new LIMRA study. While employers traditionally have used voluntary benefits as a morale booster, nearly 80 percent of polled employers said they are most interested in voluntary worksite benefits because they bring no direct costs to their business, an onlinePLANSPONSOR news report noted. Two-thirds said they offer such benefits because it boosts their overall benefits package and allows workers to receive services cheaper than if they tried to buy coverage in the marketplace.
Although the trend of cost sharing is growing, U.S. workers are starting to see improvements in their overall compensation, which is creeping back toward pre-recession levels, according to a recent survey published on the Society for Human Resource Management's website. Only 9 percent of polled employers still have a pay freeze in place - down from 48 percent in mid-2010. More companies also are restarting bonus programs in an effort to retain top talent, the survey said.
Voluntary benefits can help contain company costs
To recap a previous blog post before jumping straight in to the questions: Voluntary benefit plans help employers round out their employee benefit offerings amid cutbacks in company-paid core health care, allowing employers to provide employees with additional benefits without bearing the weight of increasing cost pressures. These optional benefits can serve as value-added tools to help attract and retain top talent. Employees often pay 100 percent of the premium on these voluntary benefits through payroll deduction. Many of these benefits can be offered to family and friends as well. It's up to the employee; it's their money, and it's not costing the employer anything.
How can companies determine if adding a voluntary benefit program is the right choice for them?
They have to look at the true cost of running a company. Adding a voluntary benefit program can help offset those costs for them. Many companies are looking to ways to cut costs in the health insurance arena. It is extremely costly to maintain these major benefits. Often, what these companies are doing, ultimately, is passing those costs on to their employees.
Most voluntary benefit programs will help reduce that cost to employees because of the unique system of these benefits. If employers decide to lower their cost of mandatory benefits by passing some of that cost on to their employees, the employees can then offset those costs by participating in, for example, auto and home insurance programs saving them money over the traditional coves they would shop on their own.
What should companies look for in a voluntary benefit program?
You want to choose a company that can provide access to a variety of types of voluntary coverage and choice for your employees in the plans available. The last thing you would want to do is to present a variety of new benefits to your employees, only to have them ultimately be confused about the different types of coverage, from different sources and the costs of each one. You will want to work with a company that can provide a powerful, effective and simple voluntary benefits package that will be communicated clearly to your employees to achieve the highest level of participation and acknowledgement of the added perks.
What is the benefit of having several policies within the same voluntary benefit package?
Simply put, the renewal process for any benefit plan can be extensive to research and implement at the term of each and every policy, not to mention having to do that multiple times across multiple carriers for multiple plans. That is a huge migraine in the making just thinking about it! By having your plan developed and presented in a unified way to your employees, you will not only save administrative costs communicating these benefits, but you will also save time and money when it comes time to renew.
If you have additional voluntary benefit questions, please do not hesitate to contact our office to learn more!