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2013 benefit strategies health-care

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  • 1. SHRM Survey Findings: State of Employee Benefits in the Workplace—Health Care December 18, 2013
  • 2. Introduction • This is part three of a series of SHRM survey findings examining employee benefits in the workplace. • The following topics are included in the six-part series titled State of Employee Benefits in the Workplace: » » » » » » Part 1: Wellness initiatives Part 2: Flexible work arrangements Part 3: Health care Part 4: Leveraging benefits to retain employees Part 5: Leveraging benefits to recruit employees Part 6: Communicating benefits State of Employee Benefits in the Workplace—Health Care ©SHRM 2013 2
  • 3. Definition • For the purpose of this survey, total health care costs includes employer-paid premiums, administration costs and any possible individual medical claims covered by the employer. State of Employee Benefits in the Workplace—Health Care ©SHRM 2013 3
  • 4. Key Findings • How are organizations trying to control the costs of health care? The majority (83%) of organizations are “very concerned” about controlling health care costs. The top three activities organizations have engaged in to control health care costs are providing educational initiatives related to health and wellness (45%), increasing employee participation in preventive health and wellness initiatives (43%), and creating an organizational culture that promotes health and wellness (41%). • Can employees expect to pay a larger portion of total health care costs in the future? Looking into plan year 2014, 24% of organizations reported they plan to increase the employee share contributed to the total costs of health care, whereas 21% do not plan to increase the employee share, and 55% were unsure. Focusing on the next three to five years, 21% of organizations currently paying the majority or an equal portion of health care costs believe that employees at their organizations will eventually be paying the majority of health care costs. State of Employee Benefits in the Workplace—Health Care ©SHRM 2013 4
  • 5. What do these findings mean for the HR profession? • The current expectation of whether employees will take on more of their health care costs is unclear, but organizations are hopeful that the employees’ share contribution will be smaller than employers’ share contribution in the future. Although there was a decline in the number of organizations raising the employee share contribution compared to 2012, a moderate percentage of organizations still chose to implement such policy to battle health care costs. Nevertheless, many organizations are optimistic that employers will cover a larger amount of total health care costs in the future. • Organizations’ strategies to control health care costs have shifted within the last year, and may continue to transform as organizations comply with the Affordable Care Act (ACA). Compared to last year, more organizations shifted the burden of high health care costs to their employees (e.g., increasing the employee share contribution). This year, however, organizations placed more emphasis on encouraging awareness and engagement of health and wellness. Organizations taking this more proactive approach to support preventive health may see outcomes such as fewer health care claims. As health care costs continue to increase, HR professionals will have to determine modifications to their organization’s health benefit plan, and whether these changes will have any impact on their organization’s overall total rewards strategy. For instance, will trimming or eliminating health care benefits hinder an organization’s ability to attract and retain talent? State of Employee Benefits in the Workplace—Health Care ©SHRM 2013 5
  • 6. How did your organization’s total health care costs change from last plan year compared with the plan year before? 72% Increased 74% 19% Remained the same 17% 2013 (n = 366) 2012 (n = 399) 10% Decreased 9% Note: Only respondents whose organizations provide health care were asked this question. Respondents who answered “not sure” were excluded from this analysis. Percentages may not total 100% due to rounding. State of Employee Benefits in the Workplace—Health Care ©SHRM 2013 6
  • 7. How concerned is your organization about controlling health care costs? 83% Very concerned 84% 16% Somewhat concerned 16% 2013 (n = 411) 2012 (n = 437) Not very concerned Not at all concerned 1% 1% 0% 0% Note: Only respondents whose organizations provide health care were asked this question. Respondents who answered “not sure” were excluded from this analysis. Percentages may not total 100% due to rounding. State of Employee Benefits in the Workplace—Health Care ©SHRM 2013 7
  • 8. Which of the following activities has your organization engaged in for the purpose of controlling the costs of health care? 2013 (n = 417) 2012 (n = 405) Provided educational initiatives related to health and wellness 45% 52% Increased employee participation in preventive health and wellness initiatives 43% 44% Created an organizational culture that promotes health and wellness 41% 45% Offered consumer-directed health plans (e.g., HRAs, HSAs) 40% 42% Increased the employee share contributed to the total costs of health care 39% 52% Provided lower-cost generic prescription or over-the-counter drugs 39% 50% Provided incentives or rewards related to health and wellness 35% 40% - 3% 7% 2% Activity Changed health care provider* Other Note: Only respondents whose organizations provide health care were asked this question. Respondents whose organizations had not conducted any activities to control the costs of health care were excluded from this analysis. Percentages do not equal 100% due to multiple response options. An asterisk (*) indicates that this response option was not asked in 2013. State of Employee Benefits in the Workplace—Health Care ©SHRM 2013 8
  • 9. Which of the following activities has your organization engaged in for the purpose of controlling the costs of health care? Comparisons by organization staff size • Organizations with 500 to 24,999 employees are more likely than those with 1 to 99 employees to indicate they provided lower-cost generic prescription or over-the-counter drugs to control the costs of health care. Comparisons by organization staff size 500 to 2,499 employees (51%) 2,500 to 24,999 employees (64%) • > 1 to 99 employees (27%) Organizations with 100 to 24,999 employees are more likely than those with 1 to 99 employees to indicate they increased employee participation in preventive health and wellness initiatives to control the costs of health care. Comparisons by organization staff size 100 to 499 employees (47%) 500 to 2,499 employees (59%) 2,500 to 24,999 (49%) • > 1 to 99 employees (25%) Organizations with 500 to 2,499 employees are more likely than those with 1 to 499 employees to indicate they provided incentives or rewards related to health and wellness to control the costs of health care. Comparisons by organization staff size 500 to 2,499 employees (63%) > 1 to 99 employees (16%) 100 to 499 employees (31%) Note: Only statistically significant differences are shown. State of Employee Benefits in the Workplace—Health Care ©SHRM 2013 9
  • 10. Which one activity has been the most successful in terms of helping your organization control the costs of health care? 2013 (n = 365) 2012 (n = 380) 22% 15% 20% 25% 13% 17% Created an organizational culture that promotes health and wellness 12% 11% Provided lower-cost generic prescription or over-the-counter drugs 10% 12% Provided incentives or rewards related to health and wellness 9% 9% Provided educational initiatives related to health and wellness 7% 5% - 4% 7% 0% Activity Offered consumer-directed health plans (e.g., HRAs, HSAs) Increased the employee share contributed to the total costs of health care Increased employee participation in preventive health and wellness initiatives Changed health care provider* Other Note: Only respondents whose organizations provide health care and conduct some kind of activity to control the costs of health care were asked this question. An asterisk (*) indicates that the option was not asked in the 2013 survey. State of Employee Benefits in the Workplace—Health Care ©SHRM 2013 10
  • 11. In plan year 2013, did your organization increase the employee share contributed to the total costs of health care? 45% Yes 47% 2013 (n = 389) 2012 (n = 410) 55% No 53% Note: Only respondents whose organizations provide health care were asked this question. Respondents who answered “not sure” were excluded from this analysis. State of Employee Benefits in the Workplace—Health Care ©SHRM 2013 11
  • 12. In plan year 2013, did your organization increase the employee share contributed to the total costs of health care? Comparisons by organization staff size • Organizations with 500 to 2,499 employees were more likely than organizations with 1 to 99 employees to increase the employee share contributed to the total costs of health care in plan year 2013. Comparisons by organization staff size 500 to 2,499 employees (57%) > 1 to 99 employees (33%) Note: Only statistically significant differences are shown. State of Employee Benefits in the Workplace—Health Care ©SHRM 2013 12
  • 13. In the next plan year, does your organization plan to increase the employee share contributed to the total costs of health care? 24% Yes 22% 21% 2013 (n = 406) No 2012 (n = 439) 18% 55% Not sure 60% Note: Only respondents whose organizations provide health care were asked this question. State of Employee Benefits in the Workplace—Health Care ©SHRM 2013 13
  • 14. In plan year 2013, is your organization paying the majority (more than half) of the total health care costs? Yes, the organization is paying the majority of health care costs No, the organization and employee pay an equal share of the health care costs No, the employee is paying the majority of the health care costs 92% 90% 5% 6% 2013 (n = 402) 2012 (n = 438) 3% 3% Note: Only respondents whose organizations provide health care were asked this question. Percentages may not total 100% due to rounding. State of Employee Benefits in the Workplace—Health Care ©SHRM 2013 14
  • 15. In three to five years, do you believe employees at your organization will be paying the majority of health care costs? 21% Yes 15% 39% 2013 (n = 390) No 50% 2012 (n = 421) 40% Not sure 35% Note: Only respondents whose organizations provide health care were asked this question. Respondents whose organizations indicated that employees were paying the majority of total health care costs were excluded from this analysis. State of Employee Benefits in the Workplace—Health Care ©SHRM 2013 15
  • 16. Organization Demographics State of Employee Benefits in the Workplace—Health Care ©SHRM 2013 16
  • 17. Demographics: Organization Staff Size 1 to 99 employees 33% 100 to 499 employees 32% 500 to 2,499 employees 17% 2,500 to 24,999 employees 25,000 or more employees 12% 6% n = 363 State of Employee Benefits in the Workplace—Health Care ©SHRM 2013 17
  • 18. Demographics: Organization Sector Privately owned for-profit 51% 24% Nonprofit organization Publicly owned for-profit 12% Government sector 11% Other 2% n = 377 State of Employee Benefits in the Workplace—Health Care ©SHRM 2013 18
  • 19. Demographics: Organization Industry Percentage Professional, scientific and technical services Health care and social assistance Manufacturing Government agencies Finance and insurance Educational services Religious, grantmaking, civic, professional and similar organizations Accommodation and food services Administrative and support and waste management and remediation services Construction Mining Transportation and warehousing Arts, entertainment and recreation Information Retail trade Real estate and rental and leasing Repair and maintenance Utilities Whole trade Agriculture, forestry, fishing and hunting Personal and laundry services Other 21% 17% 15% 12% 10% 9% 5% 4% 4% 4% 4% 4% 3% 3% 3% 2% 2% 2% 2% 1% 1% 7% Note: n = 375. Percentages do not equal 100% due to multiple response options. State of Employee Benefits in the Workplace—Health Care ©SHRM 2013 19
  • 20. Demographics: Other Is your organization a single-unit organization or a multiunit organization? Does your organization have U.S.based operations (business units) only, or does it operate multinationally? U.S.-based operations only 80% Multinational operations 20% n = 381 Single-unit organization: An organization in which the location and the organization are one and the same. 39% Multi-unit organization: An organization that has more than one location. 61% n = 381 What is the HR department/function for which you responded throughout this survey? For multi-unit organizations, are HR policies and practices determined by the multi-unit headquarters, by each work location or by both? 59% 73% Multi-unit headquarters determines HR policies and practices. Business unit/division 16% Each work location determines HR policies and practices. 4% Facility/location 11% A combination of both the work location and the multi-unit headquarters determines HR policies and practices. 37% Corporate (company-wide) n = 244 n = 244 State of Employee Benefits in the Workplace—Health Care ©SHRM 2013 20
  • 21. SHRM Survey Findings: State of Employee Benefits in the Workplace—Health Care Survey Methodology • Response rate = 11% • 441 HR professional respondents from a randomly selected sample of SHRM’s membership participated in this survey • Margin of error +/- 5% • Survey fielded May 3-22, 2013 State of Employee Benefits in the Workplace—Health Care ©SHRM 2013 21
  • 22. Additional SHRM Resources • SHRM Research Findings: Health Care Reform—Impact of Health Care Coverage and Costs • SHRM Research Findings: Health Care Reform—Challenges and Strategies • Health Care Reform Resource Page • SHRM Toolkit: Managing Health Care Costs State of Employee Benefits in the Workplace—Health Care ©SHRM 2013 22
  • 23. About SHRM Research For more survey/poll findings, visit www.shrm.org/surveys For more information about SHRM’s Customized Research Services, visit www.shrm.org/customizedresearch Follow us on Twitter @SHRM_Research Project leaders: Christina Lee, researcher, SHRM Research Project contributors: Alexander Alonso, Ph.D., SPHR, vice president, SHRM Research Evren Esen, manager, Survey Research Center, SHRM Research Copy editor: Katya Scanlan, SHRM Knowledge Center State of Employee Benefits in the Workplace—Health Care ©SHRM 2013 23
  • 24. About SHRM The Society for Human Resource Management (SHRM) is the world’s largest association devoted to human resource management. Representing more than 250,000 members in over 140 countries, the Society serves the needs of HR professionals and advances the interests of the HR profession. Founded in 1948, SHRM has more than 575 affiliated chapters within the United States and subsidiary offices in China, India and United Arab Emirates. State of Employee Benefits in the Workplace—Health Care ©SHRM 2013 24