2013 Healthcare Benefits Trends Study

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The 2013 Healthcare Benefits Trends Benchmark Study report provides insights into the adoption of new healthcare benefits, health exchanges, wellness, and related topics. The survey polled more than 300 human resources (HR) executives, benefit specialists, and other benefit decision-makers across the country to explore the current state of employee healthcare benefits, as well as the expected healthcare benefits outlook in response to sweeping healthcare reform legislation, also known as the Affordable Care Act (ACA). This includes the shift to defined contribution health plans, the launch of insurance exchanges, and the implementation of wellness plans.

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2013 Healthcare Benefits Trends Study

  1. 1. 2013 Healthcare Benefits Trends B E N C H M A R K S T U D Y healthcaretrendsinstitute.org
  2. 2. 2 2013HEALTHCAREBENEFITSTRENDS Background In the fall of 2013, the Healthcare Trends Institute, an educational platform focused on the rapidly changing healthcare benefits industry, conducted a national survey regarding trends in employee healthcare benefits. Polling more than 300 human resources (HR) executives, benefit specialists, and other benefit decision-makers across the country, the survey explored the current state of employee healthcare benefits as well as how they are expected to develop in response to sweeping healthcare reform legislation, also known as the Affordable Care Act (ACA). This includes the shift to defined contribution health plans, the launch of insurance exchanges, and the implementation of wellness plans. This survey formed the basis for the 2013 Healthcare Benefits Trends report on the following topics: CURRENT STATE OF HEALTHCARE BENEFITS: Identifies the most widely deployed employee and healthcare benefits plans, as well as how companies are responding to healthcare reform legislation. USE OF DEFINED CONTRIBUTION HEALTH PLANS, INSURANCE EXCHANGES, AND WELLNESS PLANS: Details the awareness and adoption of defined contribution health plans and insurance exchanges (public and private), and the use of wellness programs to incentivize employees. HEALTHCARE BENEFITS TRENDS – LOOKING FORWARD: Measures the importance of notable healthcare benefits trends and the outlook for 2014.
  3. 3. 3 2013HEALTHCAREBENEFITSTRENDS Study Highlights • Health insurance is the most common type of employee benefits offered today with 95.2% of respondents reporting their company currently offers it • The majority of the employee health benefit programs offered by respondents’ companies include employee+ dependents (80.8%), PPO (70.8%), prescription drug (66.8%), and mental health (45.6%) • The majority of respondents (64.8%) indicated health benefits offerings were very important for retaining and attracting employees • Of those whose companies offered employee health benefits, a majority (35.2%) of the respondents indicated their company offers three or more different group health insurance plan options, 34% reporting only offering one group health plan option, while slightly less (30.8%) offered two health plan options • Respondents indicated healthcare reform will impact their employee benefits packages by increasing employee cost-sharing (38.4%) and increasing premium contributions (33.6%) • The majority of respondents (59.4%) indicated they were somewhat to very familiar with Defined Contribution Plans (DCPs) as they relate to health benefits • Of the respondents who indicated they were interested in DCPs for the future, 55.8% reported they were considering for 2015 followed by 26.9% in 2016, and 17.3% indicated considering DCPs before the end of 2014 • 62.1% of respondents are somewhat to very familiar with public exchanges and 55.5% somewhat to very familiar with private exchanges • Of the respondents indicating they were somewhat to very familiar with exchanges, more than half (51.3%) indicated they believed exchanges will help employees make more cost-conscious benefit decisions as well as offer a wider array of options for benefit plans • 43.9% of companies surveyed are already using some kind of healthy lifestyle incentive/program, while 22.6% are considering one for the future • To promote positive health outcomes, 61% of companies offer at least one wellness program, and 43% offer employees the opportunity for health risk assessment
  4. 4. 4 2013HEALTHCAREBENEFITSTRENDS What employee benefits does your company currently offer? Health Insurance - 95.2% Dental Insurance - 90.4% Vacation Time - 88.8% Paid Holidays - 87.6% Life Insurance - 84% Disability Insurance - 77.2% Retirement Benefits - 75.6% Wellness Program - 53.6% Tuition Reimbursement - 52% EAPs - 48.8% Domestic Partner Benefits - 39.2% Parking - 24% Recreational Facilities - 12.4% Only Mandated Benefits - 12.4% Other - 12.4% Automobile - 9.2% Meals - 7.6% Hazard Pay - 5.2% Which of the following describes your company’s current employee health benefits program? Employee + Dependents - 80.8% PPO - 70.8% Prescription Drug - 66.8% Mental Health - 45.6% HMO - 36.8% Employee-only - 36.4% HDHP/HSA - 28% Retireetoformeremployees-19.6% Self-Insured - 17.6% Catastrophic - 11.6% Underwritten by Insurer - 6.8% Indemnity - 6% None - 3.6% Other - 2.4% Mini Med - 1.2% Figure 1.2 (findings on next page) Figure 1.1 (findings on next page)
  5. 5. 5 2013HEALTHCAREBENEFITSTRENDS Findings: Figure 1.1 • Health insurance is the most common type of employee benefit offered today with 95.2% of respondents reporting their company currently offers it • Dental insurance (90.4%), vacation time (88.8%), and paid holidays (87.6%) are the next most frequently offered • According to respondents, less than 10% of companies offer automobile (9.2%), meals (7.6%), or hazard pay (5.2%) Findings: Figure 1.2 • The majority of the employee health benefit programs offered by respondents’ companies include employee+ dependents (80.8%), PPO (70.8%), prescription drug (66.8%), and mental health (45.6%) • Less common employee health benefits include indemnity (6%), and mini med (1.2%) • 3.6% of those surveyed reported their companies offered no employee health benefits Insights: Health insurance leads the list of employee benefits, signifying its importance to today’s workforce. The fact that the most common health ben- efits offered are PPO “family” plans that cover Rx drugs and mental health suggest that the companies surveyed offer the kind of benefit-rich coverage many Americans have come to expect from their group health plan. Will employers of any size offer a rich level of coverage in the fu- ture? This is just one of the questions being asked in the midst of healthcare reform. Other questions are: How will the costs of healthcare change over time? As more costs are shifted to the consumer and away from the employer or insurer, how will plan designs change? Many experts believe that in order to continue offering healthcare benefits in an economy of rising costs, more companies will begin offering consumer-driven health plan options such as Health Savings Account pro- grams, which couple a high-deductible health plan with an HSA. These plans tend to have lower monthly premiums and are designed to give people more control over their healthcare savings. They are also ideal for use in a defined contribution health plan benefit model, embraced by companies looking to control their costs while still providing the important health coverage their employees value and need.
  6. 6. 6 2013HEALTHCAREBENEFITSTRENDS Findings: • Of those whose companies offered employee health benefits, a majority (35.2%) of the respondents indicated their company offers three or more different group health insurance plan options • 34% reporting only offering one group health plan option, while slightly less (30.8%) offered two health plan options Insights: The survey results show an almost even spread in the numbers of health insurance plan options offered by respondents’ companies: 1, 2, or 3 or more. Employees of companies offering three or more different plans may, for instance, have their choice of a PPO plan, HMO plan, and or a high-deductible health plan—and they’ll take their anticipated healthcare needs, provider network(s), and budgets into account while making their selection. One of the goals of the ACA is to ensure Americans have choice with respect to how they pay their share of healthcare costs. The health plans on the Health Insurance Marketplace for individuals are categorized based on monthly premium and out-of-pocket costs; the plans on private exchanges are also evaluated based on coverage and price comparisons. By putting health insurance into a consumer marketplace where people compare plan benefits and prices—and as healthcare costs shift to the consumer—it’s likely employers may move toward the addition of options, increased flexibility, and employee choice while designing healthcare benefits. How many different group health insurance plan options do you give employees? 3 or more - 35.2% 2 - 34% No - 30.8%
  7. 7. 7 2013HEALTHCAREBENEFITSTRENDS Findings: • 58.5% of respondents reported their companies have not yet put into effect any new business practices regarding health or other company benefits due to the Affordable Care Act • 41.2% of respondents reported their companies had put new business practices in place in response to the ACA Insights: These findings indicate that businesses are at different stages along the ACA learning curve, making decisions and implementing changes as they’re ready. While a few of the employer-related ACA provisions have already taken effect, such as the requirement to notify employees of the new health insurance marketplace, others have yet to take center stage. Some companies may have gotten a head start by preparing to meet the terms of the Wellness Regulations of the ACA, which becomes effective in 2014. Employers are permitted to offer employees rewards of up to 30% (it was previously 20%) of the cost of participating in a wellness program and meeting certain health-related standards. Another of the key ACA provisions many employers have started to contemplate is the “Play or Pay” mandate. Beginning in 2015, the ACA will assess a $2,000 fee per full-time employee, excluding the first 30 employees, on employers with more than 50 employees that don’t offer coverage and have at least one full-time employee receiving a premium tax credit. Many businesses have already begun to prepare to comply with the health insurance coverage reporting requirements associated with this regulation. Additionally, employers will need to determine if their insurance plans meet the federal definitions of “affordable” and “minimum value.” Some businesses may have a “wait and see” attitude and still consider what steps to take—or what business practices they’ll have to change—in order to maintain compliance with ACA. Yes - 41.2% No - 58.5% Has your company put any new business practices into effect regarding health plan benefits or other company benefits due to the Affordable Care Act?
  8. 8. 8 2013HEALTHCAREBENEFITSTRENDS Findings: • Respondents indicated healthcare reform will impact their employee benefits packages by increasing employee cost-sharing (38.4%) and increasing premium contributions (33.6%) • Only 6% indicated reform would narrow their networks of hospitals and physicians • Less than 5% (3.2%) indicated it would shift their company towards defined contribution plans (DCP) Insights: While it remains to be seen how healthcare reform will affect the cost of employer-sponsored health benefits, these findings indicate that employers recognize the impact of rising healthcare costs on their benefits package—whether they are taking on an additional financial burden or passing the costs along to employees. Based on the ACA mandates already in effect, reform efforts are generally mandating that plans offer “richer” coverage, and richer coverage is more expensive. Both a plan’s design and cost-sharing structure can make a big difference to employers and employees alike. Even if employers choose to shift a larger share of healthcare costs to employees by moving to more consumer-driven high deductible plans, they can enable employees to better plan for their healthcare utilization and savings, or at least give them the tools they need to make the most of their coverage. Wellness and other healthy lifestyle programs including smoking cessation or disease management can also help promote efficient use of health care and spending. How will healthcare reform impact your employee benefits package? Increase employee cost-sharing - 38.4% Increase our premium contributions - 33.6% Other - 28.4% Enhance wellness, preventative health programs - 22.4% Adopt new wellness, preventative health programs - 12.8% Reduce covered benefits - 12.4% Introduce HDHPs/CDHPs - 8.4% Narrow networks of hospitals & physicians - 6% Shift to defined contribution plans (DCP) - 3.2%
  9. 9. 9 2013HEALTHCAREBENEFITSTRENDS Findings: • The majority of respondents (64.8%) indicated health benefits offerings were very important for retaining and attracting employees, while only 1.6% felt they were not important • In addition, more than half of respondents indicated health benefits were very important towards improving employee morale and satisfaction (56.6%) and improving employee health, reducing absenteeism, and improving productivity (52%) Insights: Half of the respondents, at the very least, find it important to match the competition on healthcare benefit offerings. This suggests that moving forward, they’ll continue to offer health benefits that have value to employees and prospective employees. How important are your health benefits offerings to... 5 - Very important 4 3 - Important 2 1 - Not important Retain and attract quality employees – 4.48 Avg. Rating Improve employee morale and satisfaction – 4.34 Avg. Rating Improve employee health, reduce absenteeism, improve productivity – 4.215 Avg. Rating Match competition – 4.16 Avg. Rating 64.8%22.5%7.8%3.3% 1.6% 56.6%28.7%11.5% 1.6% 1.6% 52%27.9%14.8%3.3% 2% 50%27.1%16.2%2.9%3.8%
  10. 10. 10 2013HEALTHCAREBENEFITSTRENDSDEFINEDCONTRIBUTIONPLANS(DCPS) Findings: • The majority of respondents (59.4%) indicated they were somewhat to very familiar with Defined Contribution Plans (DCPs) as they relate to health benefits • 40.6% of respondents indicated they were not familiar with DCPs as they relate to health benefits Insights: Defined Contribution Plans began as retirement accounts for retiring employees. Throughout the years, large companies began to adopt the DCP model to allow all employees to pick and choose the benefits most important to them. Employers of all sizes are learning that DCPs provide employees with a specific dollar amount toward health insurance and a private exchange on which to shop for their benefits. Employees who want more benefit-rich health plans or additional health options contribute more based on their selections. 5 - Very familiar 4 3 - Familiar 2 1 - Not familiar 40.6% How familiar are you with Defined Contribution Health Benefit Plans? 13.9% 16.8% 12.7% 16%
  11. 11. 11 2013HEALTHCAREBENEFITSTRENDS Findings: • Of those respondents who indicated they were somewhat – very familiar with DCPs , a majority (54.1%) indicated offering a DCP would help employees make more cost-conscious benefit decisions. Furthermore, 40.5% of these respondents indicated that a DCP offering would also lead to increased employee understanding of benefit costs • Allowing the company to continue offering benefits otherwise in jeopardy and leading to lower health benefits costs for the company were reported with the same frequency (31.5%) Insights: Employers interested in DCPs understand the value that their companies receive if they were to provide a fixed dollar amount toward health coverage. A well-run private exchange will provide numerous health plan options with several network and prescription drug networks from where their employees can choose. Containing healthcare costs remains paramount to companies, but as the findings indicate, so does involving the employee in the process to help ensure positive healthcare outcomes that are mutually beneficial to both employers and employees. Do you think offering a defined contribution plan (DCP) would: Help employees make more cost-conscious benefit decisions - 54.1% Lead to better employee understanding of benefit costs - 40.5% Offer a wider array of options for benefit plans - 39.6% Allow continued health benefits otherwise in jeopardy - 31.5% Lead to lower health benefit costs for the organization - 31.5% Allow less focus on benefit selection and more on employee value - 28.8% Other - 10.8% DEFINEDCONTRIBUTIONPLANS(DCPS)
  12. 12. 12 2013HEALTHCAREBENEFITSTRENDS Findings: • The majority of respondents (36.1%) indicated they were considering DCPs for the future while just more than a quarter (25.2%) indicated they were not interested on adopting DCPs Insights: With about 56% of respondents interested in learning about and considering DCPs for the future indicates that each year more and more companies will begin using DCPs as a means for their employees to choose and enroll in the health benefits most important to them. This insight is supported by the fact about 94% of the employers surveyed currently offer health insurance and 65% are committed to providing health insurance to attract and retain employees. And yet, the average cost of health coverage is about $10,000 per employee. Therefore, controlling these costs through a DCP may provide the solution many employers turn to in the near future. Where are you in the process of exploring/ adopting defined contribution plans? Considering for future - 36.1% Not interested - 25.2% Still learning - 18.9% Already using - 14.4% Other - 5.4% DEFINEDCONTRIBUTIONPLANS(DCPS)
  13. 13. 13 2013HEALTHCAREBENEFITSTRENDS Findings: • Of those respondents who indicated they were interested in DCPs for the future, 55.8% reported they were considering for 2015 followed by 26.9% in 2016 • Only 17.3% indicated considering DCPs before the end of 2014 Insights: As large employers gear up for the ACA 2015 mandates, foremost in their minds is the $2,000 per full-time employee penalty for not providing health coverage to their employees. Instead of dropping coverage and facing a government penalty, employers may view DCPs as a way to continue giving their employees this benefit and keeping their businesses’ competitive edge in hiring and retaining talent. Providing a DCP would also allow companies to receive numerous tax benefits from offering health coverage. If considering exploring/adopting defined contribution plans (DCPs) for the future, when? 2015 - 55.8% 2016 - 26.9% 2014 - 17.3% DEFINEDCONTRIBUTIONPLANS(DCPS)
  14. 14. 14 2013HEALTHCAREBENEFITSTRENDS What partners would you depend on to help you learn about new health benefit designs such as defined contribution plans? Insurance Broker - 46.2% Benefit Consultant - 45.3% Will do research independently - 44.9% Insurance Carrier - 23.7% TPA (Third Party Administrator) - 19.1% Industry/Trade Association - 17.8% Payroll Co. - 7.2% Other - 5.1% DEFINEDCONTRIBUTIONPLANS(DCPS) What information would your company be looking for regarding new health benefit designs, such as defined contribution plans? How would our company benefit from DCP? - 27.6% What are DCPs? - 25.7% Do employees like DCPs? - 19.1% What other health plan designs are available? - 15.8% Other - 9.2% Can our company offer a DCP plan under PPACA? - 2.6% Figure 2.1 (findings on next page) Figure 2.2 (findings on next page)
  15. 15. 15 2013HEALTHCAREBENEFITSTRENDS Findings: Figure 2.1 • Insurance brokers (46.2%) and benefit consultants (45.3%) were the top two external partners respondents reported they would depend on to learn about new health benefit options and DCPs • 44.9% of respondents reported they would do the research independently • Payroll companies (7.2%) are the least used resource for learning about the latest health benefit plan designs Findings: Figure 2.2 • Of those interested in learning more about new health benefit designs, the top information sought out by respondents included how the company would benefit from a DCP (27.6%) and more information about fundamentals of DCP offerings (25.7%) • Only 2.6% indicated wanting to know more about whether or not their company could offer a DCP under the PPACA Insights: Over time, outreach and educational efforts by insurance brokers and benefit consultants at least initially, have the potential to significantly impact company decision-makers. These two groups as well as online tools will need to match the changing needs of employers as they begin the process of considering DCPs and then move to more sophisticated customers of private exchanges. In light of the ACA mandates, employers are also looking at ways to continue providing benefits and control their healthcare costs. Relevant information that provides cost-saving business solutions that employers can implement in their companies, make the deliverer a valuable asset in this new world of healthcare reform. DEFINEDCONTRIBUTIONPLANS(DCPS)
  16. 16. 16 2013HEALTHCAREBENEFITSTRENDSPRIVATE/PUBLICEXCHANGES Findings: • 62.1% somewhat to very familiar with public exchanges and 54.5% somewhat to very familiar with Private exchanges • Overall respondents were less familiar with private exchanges (45.5%) than public exchanges (37.9%) Insights: The recent October 1 launch of the public and state exchanges and the subsequent media coverage of the online process has promoted familiarity with the term “public insurance exchanges.” The public exchanges are designed initially only for individuals to purchase coverage. As most employers surveyed provide group coverage for their employees, the awareness of the public exchange may not be as important to these respondents. Additionally, because DCPs are just starting to gain ground among employer groups, awareness of private exchanges is expected to grow in correlation with DCP use in companies. How familiar are you with public and private healthcare exchanges? Public Private 37.9% 45.5% 5 - Very familiar 4 3 - Familiar 2 1 - Not familiar 12.3% 20.4% 14.5% 14.9% 11.7% 18.6% 10.8% 13.4%
  17. 17. 17 2013HEALTHCAREBENEFITSTRENDS Findings: • Almost half (47.2%) of respondents indicated they are not interested in an exchange type model for healthcare benefits • Still learning accounted for 23.4% of responses, while only 6.4% reported they were already using an exchange type model for their healthcare benefits Insights: Education of DCPs and private exchange models will continue to play a large role as to their adoption rate in companies. As the findings indicate, private exchanges have the potential for enormous growth in the coming years. Private exchanges are new avenues that employers will need to fully explore in order to make informed decisions for their companies. Due to the tax incentives offered to smaller companies through the Small Business Health Options Program (SHOP), many smaller businesses may find this program beneficial as an alternative to private exchanges. Where are you in the process of offering an exchange type model for healthcare benefits (individual or group policies)? PRIVATE/PUBLICEXCHANGES Not interested - 47.2% Still learning - 23.4% Considering for future - 17% Already using - 6.4% Other - 6%
  18. 18. 18 2013HEALTHCAREBENEFITSTRENDS Findings: • Half of respondents interested in an exchange type model for healthcare benefits indicated they would consider offering in 2015 • The other half of respondents were closely split on whether they would offer in 2014 (26.9%) or wait until 2016 (23.1%) Insights: In 2015, ACA provisions will regulate a penalty for companies, with 100 or more full-time employees, who do not offer coverage pointing to an interest in private exchanges in 2015. If considering offering an exchange type model for healthcare benefits, when? 2015 - 50% 2014 - 26.9% 2016 - 23.1% PRIVATE/PUBLICEXCHANGES
  19. 19. 19 2013HEALTHCAREBENEFITSTRENDS Findings: • Of the respondents indicating they were somewhat to very familiar with exchanges, more than half (51.3%) indicated they believed exchanges will help employees make more cost-conscious benefit decisions as well as offer a wider array of options for benefit plans • Allowing for employees to focus less on benefit selection and more on employee value was the least popular response with 16.3% Insights: Of the respondents familiar with private exchanges, more than half believe exchanges will have the ability to make an impact on cost and options. Healthcare plan affordability and options are two of the main goals of the healthcare reform and show a correlation with employer’s beliefs about exchanges. These findings are also consistent with employers’ understanding of the benefits associated with DCPs. As employers look to implement cost-saving measures within their organizations, they will rely on mechanisms that increase employees’ knowledge and awareness regarding benefit costs. Do you think private exchanges will: Help employees make more cost-conscious benefit decisions - 51.3% Offer a wider array of options for benefit plans - 51.3% Lead to better employee understanding of benefit costs - 43.8% Allow employers to continue offering benefits that would otherwise be in jeopardy - 36.3% Lead to lower health benefit costs for organization - 23.8% Allow employees to focus less on benefit selection and more on employee value - 16.3% Other - 12.5% PRIVATE/PUBLICEXCHANGES
  20. 20. 20 2013HEALTHCAREBENEFITSTRENDS Findings: • COBRA Compliance is indicated to be the attribute that most respondents (35.3%) felt to be very important to offering health plans in an exchange environment • Carrier integration (33.6%) and health spending accounts (33%) were also indicated to be attributes felt to be very important • The majority of respondents (9.5%) indicated payroll processing to not be an important attribute Insights: Results indicate that employers are looking for an exchange environment to provide many value-added services. Employers list COBRA compliance, integration with health spending accounts and carriers, premium payment automation and payroll processing all to be important attributes for working with a private exchange. Streamlining these processes has equal appeal to small and large businesses, and demonstrates a desire for simplified employer administration of benefits. Please rank the attributes you would value in offering health plans in an “exchange” environment: Carrier Integration – 3.83 Avg. Rating Payroll Processing – 3.57 Avg. Rating Premium Payment Automation – 3.69 Avg. Rating Health Spending Accounts (e.g. Health Savings /Flexible Spending) – 3.76 Avg. Rating 33.6% 26.7% 29.2% 33% COBRA Compliance – 3.71 Avg. Rating 35.3% 5 - Very important 4 3 - Important 2 1 - Not important 29.3%23.3%6.9%6.9% 27.6%29.3%6.9%9.5% 32%24.8%6.2%7.1% 25.2%26.9%8.4%6.7% 21.8%25.2%10.1%7.6% PRIVATE/PUBLICEXCHANGES
  21. 21. 21 2013HEALTHCAREBENEFITSTRENDS Findings: • Most respondents (84.9%) are looking for plan and cost comparison tools in a benefit offering within an insurance exchange environment • Online access (76.2%) and combined benefit enrollment (61.1%) are also features respondents want to see included • The least selected feature was progressive cost tracking tools (27%) Insights: Employers are requesting a comprehensive platform to provide employees with tools to help them make knowledgeable decisions and engage them in the healthcare process. The high percentage of employers seeking online access for their employees also suggests ease of use is a priority for handling enrollment and questions. If you choose or could design a benefit offering using an insurance exchange environment, what features would you include? Plan and cost comparison tools - 84.9% Online access - 76.2% Combined benefit enrollment - 61.1% Help line - 56.3% Consolidated employer billing services - 47.6% Financial account options - 36.5% Progressive cost tracking tools - 27% Other - 4% PRIVATE/PUBLICEXCHANGES
  22. 22. 22 2013HEALTHCAREBENEFITSTRENDS Findings: • The majority of respondents (53.2%) indicated they would research private exchanges independently while going through an insurance broker (53.2%) or benefit consultant (48.4%) were also popular selections • Only 5.6% indicated they would go through a payroll company Insights: Employers are looking for reliable resources to help them navigate this new system of healthcare. The response to this question is similar as to how employers would like to get information regarding DCPs. They are willing to do their own research, but are also looking to their broker or benefit consultant to provide insight and recommendations that make sense for their business. Opportunities exist for brokers to become health program experts to get their foot in employers’ doors, and to share their knowledge through reliable online resources for those employers searching independently. What partners will you depend on to help you learn about private exchanges? Will do research independently - 53.2% Insurance Broker - 53.2% Benefit Consultant - 48.4% Industry/Trade Association - 30.2% Insurance Carrier - 26.2% TPA (third party administrator) - 19% Payroll Company - 5.6% Other - 5.6% PRIVATE/PUBLICEXCHANGES
  23. 23. 23 2013HEALTHCAREBENEFITSTRENDSWELLNESS Findings: • 43.9% of companies surveyed are already using some kind of healthy lifestyle incentive/program, while 22.6% are considering for the future • The smallest majority (15.2%) indicated they are not interested in adopting a health lifestyle incentive program Insights: Companies have long had an interest in keeping their workers healthy, productive, and satisfied while cutting healthcare costs. Wellness programs encourage employees to take measures to lead healthier lifestyles and prevent possible future diseases. Employers responding positively to implementing healthy lifestyle programs have made the correlation between influencing employees to adopt healthier lifestyles and a reduction in employee healthcare costs. Where are you in the process of exploring/adopting a healthy lifestyle incentive/program? Already using - 43.9% Considering for future - 22.6% Still learning - 15.7% Not Interested - 15.2% Other - 2.6%
  24. 24. 24 2013HEALTHCAREBENEFITSTRENDS Findings: • Of those offering wellness programs or services, 74.5% offer flu shots or vaccinations, 69.4% offer an Employee Assistance Program (EAP), and 54.6% offer gym membership discounts or on-site exercise facilities • Only 4.2% of companies surveyed don’t offer any wellness programs or services Insights: Major pharmacy chains in conjunction with health plans have provided more training for vaccination administration than ever before. Employers have demonstrated in part why this may be the case, listing it as their top wellness service for employees. Nearly 70% of employers also demonstrated that they understand the importance of providing a culture that supports its healthy lifestyle program with almost 70% of them noting that they have an Employee Assistance Program in place to help workers with a variety of work/life balance challenges. What specific wellness programs/ services do you offer employees? Flu shot or vaccinations - 74.5% Employee assistance program (EAP) - 69.4% Gym membership discounts or on-site exercise facilities - 54.6% Smoking cessation program - 44.9% Web-based resources for healthy living - 43.5 Weight loss program - 38% Biometric screening - 31.5% Other - 5.1% None - 4.2% WELLNESS
  25. 25. 25 2013HEALTHCAREBENEFITSTRENDS Findings: • To promote positive health outcomes, 61% of companies offer at least one wellness program and 43% offer employees the opportunity for health risk assessment • Offering a disease management program was the least popular way employers chose to promote positive health with 23.3% Insights: The Affordable Care Act incentives for 2014 recognize the link between company wellness initiatives and lowering healthcare costs. The Affordable Care Act creates new incentives and builds on existing wellness program policies to promote employer wellness programs and encourage opportunities to support healthier workplaces. The proposed rules also implement changes in the ACA that increase the maximum permissible reward under a health-contingent wellness program from 20% to 30% of the cost of health coverage, and that further increase the maximum reward to as much as 50% for programs designed to prevent or reduce tobacco use. As employers will continue to be encouraged to provide wellness programs to their employees, an increase in positive health outcomes should be experienced by more and more organizations. How do you promote positive health outcomes at your company? Offer at least one wellness program - 61% Opportunity for health risk assessment - 43% Provide incentives/rewards for certain health-related tasks - 36.8% Biometric screening - 28.3% Nothing at this time - 26.9% Offer at least one disease management program - 23.3% Other - 4.5% WELLNESS
  26. 26. 26 2013HEALTHCAREBENEFITSTRENDSTHEDEMOGRAPHICS Other - 18.9% Manufacturing - 15% Government - 11% Technology - 10.6% Education - 10.1% Finance Insurance - 8.8% Healthcare - 7.5% Non-profit - 7.5% Retail goods Services - 4.4% Construction - 4.4% Travel Entertainment - 1.8% 101-1000 - 33.6% 2,501 - 22.7% 50 - 22.7% 1001-2500 - 10.9% 51-100 - 10% Approximately how many full-time employees are in your company/ organization? What industry is your company in?
  27. 27. 27 2013HEALTHCAREBENEFITSTRENDS Survey Summary/Conclusion • Ongoing cost concerns among employers of all sizes will continue to spur change both in the form of defined contribution plans and the use of health insurance exchanges • Most employers are interested in learning more about DCPs for the future supporting the shift away from a traditional defined benefit model to manage employee healthcare benefits and control costs • Overall, employers are more familiar with public exchanges than private exchanges. This may be due to the October 1 launch of the Federal Insurance Marketplace, which coincided with survey data collection. As most employers surveyed provide group coverage, the awareness of public exchanges may not be as important to these respondents • Because DCPs are starting to gain ground among employer groups, awareness of private exchanges is expected to grow in correlation with DCP use in companies • We can expect an increase in the number of companies offering at least one wellness program or health initiative as ACA wellness incentives go into effect in 2014
  28. 28. 28 2013HEALTHCAREBENEFITSTRENDS About the Healthcare Trends Institute The Healthcare Trends Institute is an educational platform to help employers, third-party administrators, health plans, brokers, banks, payroll providers, consumers, and other stakeholders keep up with the rapidly changing healthcare benefits industry. It covers a range of topics related to the administration and management of healthcare benefits. To ensure all content and programs achieve the highest level of quality and relevancy, the Institute is guided by an Editorial Advisory Board comprised of subject-matter experts that represent diverse aspects and perspectives within the healthcare benefits industry. More information is available at www.healthcaretrendsinstitute.org Tiffany Wirth, Executive Director Healthcare Trends Institute 4324 20th Avenue, SW, Ste. 200 Fargo, ND 58103 P 701.499.7215 E info@HealthcareTrendsInstitute. org ABOUT EVOLUTION1, INC. – A WEX COMPANY At Evolution1, Inc. – a WEX Company, we simplify the business of healthcare. We do that through innovative cloud-based payment and technology solutions that administer and manage consumer-directed and defined contribution accounts. But we don’t do it alone. Our network of partner organizations enables us to deliver our industry-leading and award-winning solution to 125,000 employers and more than 11,000,000 consumers across the country. Together we take the complexity out of defined contribution, HSAs, HRAs, FSAs, VEBAs, PRAs, wellness plans, and transit plans. Learn more at www.evolution1.com.

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