The health care reform law and high insurance costs are giving businesses plenty to think about, but most employers responding to a survey on employee benefits say their 2013 health insurance packages are close to what they offered in 2012.
More than 2,000 employers participated in the survey from human resource and benefits information provider BLR. Although 73 percent of the respondents said their plans are about the same this year as last, 15 percent said their 2013 package is less generous than last year’s. Six percent said their 2013 package is more generous. The remaining six percent either weren’t sure or answered “other.”
Just over 40 percent of survey participants plan minor to moderate changes for 2014 insurance plans, 34 percent plan no changes, and seven percent plan significant changes. Nineteen percent answered “other.”
Some 29 percent of survey participants said the Patient Protection and Affordable Care Act health reform law caused 2013 insurance costs to increase, but 38 percent said it hasn’t caused significant increases. Twenty-eight percent said they don’t know the cost effect yet.
Though 25 percent of survey participants have considered dropping health benefits because of the health law and one percent plan to do so, 70 percent say they plan to continue providing health insurance to their employees. Four percent weren’t sure or were taking a “wait and see” position.
With health care exchanges becoming available in 2014, seven percent of survey respondents said they may eliminate their group health care plans. Forty-four percent said the availability of exchanges won’t prompt them to discontinue health insurance. Forty-seven percent responded that they aren’t sure what they’ll do as exchanges come on line.
Holding down costs
Cost sharing and cost containment are on the minds of the survey respondents. For survey participants who had increased health insurance costs in 2013, 58 percent passed some of the increase to employees, six percent passed along most of the increase, and another six percent passed on all of the increase to employees. Twenty-two percent reported they absorbed all of the increase.
The steps employers took to contain costs for 2013 health insurance plans included raising the employee portion of the premium (20 percent), implementing wellness programs (16 percent), raising employee deductibles (14 percent), offering Health Spending Accounts/Health Reimbursement Arrangement high-deductible plans (9 percent), and raising employee copayments (7 percent). Some 26 percent of respondents took “other” actions including renegotiating with their provider, shopping for a new provider, and converting to a self-insured program.
Three-fourths of the survey participants expect costs to go up in 2014, with 38 percent of those expecting significant increases. But 15 percent expect costs to stay the same with just a small inflationary increase, and one percent expect costs to go down. Just over nine percent opted for the “other” answer choice, with most saying they’re unsure how health reform will affect their plans.
To deal with the expected cost increase for 2014, 23 percent plan to increase employee premiums, 19 percent plan to implement wellness programs, and 12 percent plan to raise employee deductibles or copayments. Seven percent plan to offer HSA/HRA high-deductible plans, and two percent plan to conduct dependent audits. Thirty-one percent of the participants will either do nothing or don’t know what they’ll do.
Who’s a dependent?
Dependent coverage is also on the minds of employers. Unmarried partners aren’t included in the benefit plans for 60 percent of the survey participants, but they are included by 27 percent of the respondents. Nine percent said they weren’t sure, and the remaining four percent chose the “other” answer choice, some of which allow the benefit for registered domestic partners or if required by state law.
When asked if their organizations allow employees to get insurance for their same-sex partners, 48 percent said no and 32 percent said yes. “Not sure” was the answer for 15 percent and “other” was chosen by five percent.
Employers also were asked about the plan options they offer. PPOs are offered by 68 percent of survey participants, and HMOs are offered by 31 percent. High deductible plans are a benefit for 35 percent, and point-of-service plans are available for 13 percent. Just five percent offer traditional indemnity plans, and six percent answered “other.”
Forty-four percent of survey participants have considered offering high deductible plans, 40 percent have not, 13 percent responded that they didn’t know if they’ve considered such plans, and two percent answered “other.”
Thirty-nine percent of participants offer flexible spending accounts (FSAs) as an option. FSAs are available to 51 percent for child care, 12 percent for elder care, 58 percent for health care, and two percent for disability insurance.
Thirty-five percent of survey participants said their main health care benefits priority for 2013 is cost containment, 30 percent said complying with health care reform, and 29 percent said rethinking their long-term benefits strategy.
Seventy-seven percent of the respondents said their health benefits package is very important in recruiting and retention, while 19 percent said it’s neutral or not important.
Organizations with up to 250 employees account for 68 percent of the 2,055 responses to the survey; 21 percent have 251 to 1,000 employees; another 11percent employ 1,001 to 10,000 individuals, and two percent work in organizations with more than 10,000 employees.