Wellness & Consumer Driven Health Care

Data That Makes Sense
and
Making Sense of the Data

Copyright © 2009 United Benefit Advisors, LLC. All Rights Reserved.

2009 UBA Health Plan
Survey Initiative


About United Benefit Advisors

 140 Member Firms

 Over 165 Offices nationally

 1,800 Benefits Professionals

 One of the Five Largest Employee
Benefits Organizations in the Country


About United Benefit Advisors

 Serving –

– nearly 40,000 Client Companies

– over 5.5 Million Employees & their
families

– ~$16.5 Billion in Employee Benefits
Expenditures

Why We’re Here


Top decision-maker’s concern about the cost of health
care benefits with respect to:

53.0%
46.3% 47.8%

36.6%

9.5%
5.6%
0.3% 0.1% 0.8% 0.1%

Corporate Costs Impact on Employees
Critical Concern Significant Concern Some Concern Little Concern No Concern


Increases in Health Insurance Premiums
Compared to Other Indicators 1988-2008
20.0
18.0
18.0
16.0
14.0
14.0 12.9 13.9
12.0 11.2
12.0 10.9
10.0
8.5 8.2 9.2
8.0 7.7
5.3 7.3
6.0 6.1
4.0
2.0
0.8
0.0
88

89

90

93

96

99

00

01

02

03

04

05

06

07

08
19

19

19

19

19

19

20

20

20

20

20

20

20

20

20
Health Insurance Premiums Overall Inflation Workers' Earnings
Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits: 1999-2007; KPMG Survey of Employer-Sponsored Health Benefits: 1993, 1996; The
Health Insurance Association of America (HIAA): 1988, 1989, 1990; Bureau of Labor Statistics, Consumer Price Index, U.S. City Average of Annual Inflation
(April to April), 1988-2007; Bureau of Labor Statistics, Seasonally Adjusted Data from the Current Employment Statistics Survey (April to April), 1988-2007.


Health Care Costs
Per Employee Per Year
$9,000
1969 $242
$8,000
$7,000
$6,000
1979 $623
$5,000
$4,000
$3,000
1995 $3,821
$2,000
$1,000
$0
2009 $7,646 1969 1979 1995 2009


2009 Health Care Trend –
Med + RX
Type of Plan 2009 Trend
 Preferred Provider Organization 11.1 %
 Health Maintenance Organization 10.0 %
 Point-of-Service Plan 10.5 %
 Consumer Driven Health Plan 10.6 %
 Indemnity Plan 12.2 %
 Prescription Drugs 9.8 %
Source: United Benefit Advisors – Composite of Published Trends


The Effects of Inflation on
Medical Premiums @ 8% / 13%
8.00% Per Year 13.00% Per Year
Year Single Family Single Family

2008 $4,440 $10,812 $4,440 $10,812

2011 $5,593 $13,620 $6,406 $15,601

2014 $7,046 $17,157 $9,244 $22,510

2017 $8,876 $21,613 $13,338 $32,480

2020 $11,181 $27,226 $19,245 $46,865


2009 Health Plan Survey


Survey Summary

 # of Companies Participating

– 12,316

 # of Medical Plans Reported

– 17,655

Survey Summary

 # of states represented

– 50 (and D.C.)

 # of cities represented

– ~ 3,300

Survey Summary

 # of Employees

– 1.9 Million

 # of Total Lives

– ~ 4.5 Million

Key Survey Findings


Wellness Programs


Percent Offering Wellness by Employee
Size
60%
52.5%

50%

40%
32.2%
28.9%
30%

20%
14.7%

9.0%
10% 5.4%
4.0%

0%
3 - 24 25 - 49 50 - 99 100 - 199 200 - 499 500 - 999 1000 +

Copyright © 2009 United Benefit Advisors, LLC. All Rights Reserved. 17

Summary - Wellness

 Wellness programs are underutilized in
companies <500

 Wellness Plans from 2008 to 2009 grew
from 9.8% to 11.1%; a 13.3% increase.

 Over ¾ (78.4%) of firms with Wellness
plans use Health Risk Assessments


Summary - Wellness

 Over half (56.9%) of Wellness plans use
Incentives:
– 30.9% use Cash / 401(k) / FSA incentives
– 56.9% use gift cards or health club
memberships
 2008 UBA ER Opinion Survey result: 49.6%
said Wellness was Effective / Very Effective
way to control rising costs


Consumer Driven
Health Care

20

Prevalence of Plan Type by Region (CDHP)

25% 23.0%

20.1%
18.8%
20%

15%
12.4%
10.8%

10%

5%

0%
Northeast Southeast North Central Central West


% of Employers Offering CDHP by
Employee Size
20% 19.7% 19.1%

18% 16.8%
15.6%
16% 14.8%
13.6%
14%
11.2%
12%

10%

8%

6%

4%

2%

0%
3 - 24 25 - 49 50 - 99 100 - 199 200 - 499 500 - 999 1000 +


CDHC Plan Designs

 Median CDHP Deductible = $2,000 / $4,000

 Median CDHP Coinsurance = 100% / 70%

 Median CDHP OOP Max. = $6,000 / $12,000

 Median CDHP Office Visit CoPay = $20


Consumer Driven Health Plans

 High Deductible Health Plans with an HRA
or HSA, are 17.0% (a 33.9% increase over
the 12.6 % last year), with 15.4% of all
employees now enrolled in CDHPs
 Over ½ (53.8%) of CDHPs are from
companies with fewer than 100
employees, with the over 1000 employee
groups accounting for 6.2% of the CDHPs


HRAs And HSAs


Summary - CDHP

 34.9% of CDHP Plans offer HRAs

 68.7% offer 1st Dollar Preventative benefits

 Median Employer HRA Single contribution: $1,000

 65.9% of CDHPs offer HSAs

 87.6% of HSA plans offer 1st Dollar Preventative

 Median Employer HSA Single contribution is $417


Employer Contributions

 Average HRA contributions:

– $1,310 single

– $2,502 family

 Average HSA contributions:

– $621 single

– $976 family


CONSUMER DRIVEN HEALTH CARE

HRAs or HSAs coupled with High Deductible Health
Plans (HDHPs) are effective vehicles to:
Increase employee sensitivity to 78.2%
6.5%
real cost of health care 15.3%

Provide a financial incentive for 69.7%
13.5%
EEs to manage their health 16.8%
64.7%
Shift more cost to employees 16.6%
18.6%

Lower health care costs, 62.0%
13.6%
including premium costs 24.5%
60.9%
Expand options for employees 17.8%
21.3%

Strongly Agree / Agree Disagree / Strongly Disagree Don't Know


CONSUMER DRIVEN HEALTH CARE

HRAs or HSAs coupled with High Deductible Health
Plans (HDHPs) are problematic because:
The need to increase health 66.7%
15.2%
education for employees 18.2%

The plan design complexity for our 59.1%
16.8%
employee population 24.1%

EEs have limited time or interest in 54.6%
24.2%
directly managing their health 21.2%

50.1%
Increased HR workload 25.9%
24.0%

Strongly Agree / Agree Disagree / Strongly Disagree Don't Know


Comparisons of Enrollment
by Plan Type By Region


5-Region Map


% of Employees Enrolled
by Plan Type by Region (CDHP)
25% 23.0%

19.8%
20%

14.5%
15%
11.1%

10%

4.2%
5%

0%
Northeast Southeast North Central Central West


Differences by Industry Category
 Many Prevention & Wellness Programs
– Health Care & Social Assistance
– Public Admin; Education; Utilities
– Finance, Insurance & Real Estate
 Few Prevention & Wellness Programs
– Professional, Scientific, & Technical Services
– Information, Entertainment, Food & Accomm.
– Construction; Ag & Forestry; Mining; Transport

Health Plan Management


Which specific strategies or programs do you currently
have in place or planned for next year?
Increase deductibles, 49.2%
coinsurance, and/or out-of- 19.8%
pocket maximums 8.5%

34.8%
Increase office visit /
18.9%
immediate care / ER copay
11.8%

18.5%
Add higher Specialty Care
12.6%
Physician (SCP) copay
14.5%

In Place Now Likely Next Year Would Like Someday


Which specific strategies or programs do you currently
have in place or planned for next year?
Implement a High Deductible 11.9%
5.4%
Health Plan with an HRA 17.3%

6.8%
Health Plan with an HSA 21.3%

2.0%
Health Plan with no HRA or HSA 7.2%
Implement a HDHP with an 10.5%
employer-funded medical 3.4%
reimbursement plan 14.7%



Which health plan cost-control strategies/programs do you
currently have in place or planned for next year?
Increase employee share of 30.7%
27.5%
premiums 12.6%
Implement 24-Hour Nurse 33.9%
Hotline or Patient Advocate 3.0%
Service 25.6%

Implement a wellness program 20.4%
13.5%
with health risk assessments 38.6%

Implement a chronic disease 15.9%
7.3%
management program 36.0%



Health Plan Management
Which health plan cost-control strategies/programs do you
currently have in place or planned for next year?
Implement tiered network 7.4%
2.7%
plan 31.9%
Provide an opt-out bonus for 16.3%
employees or spouses waiving 2.6%
coverage 26.3%
Increase premiums or eliminate 7.7%
coverage for spouses eligible or 5.4%
covered under another plan 26.8%

Implement different smoker 4.4%
5.4%
vs. non-smoker premiums 46.2%



Effectiveness of Plan
Management Strategies


Rate the effectiveness for these cost-containment
strategies (whether you have such a program or not):
Wellness/prevention 49.6%
36.2%
programs 14.2%

Higher deductibles 44.5%
44.4%
and/or reduced benefits 11.2%

Chronic disease 41.4%
32.7%
management programs 26.0%

Increased employee 40.2%
47.5%
premium cost-sharing 12.4%

Very Effective / Effective Limited / None Don't Know


Rate the effectiveness for these cost-containment
strategies (whether you have such a program or not):
32.8%
Consumer driven
31.7%
health plans
35.5%

30.5%
Tiered network
30.1%
programs 39.4%

Coalition 15.2%
purchasing 23.4%
programs 61.4%

Very Effective / Effective Limited / None Don't Know


Employer Predictions


What do you predict will happen to health plans in the
next 5 years?

Costs will shift more to 86.8%
employees 3.8%

Consumer Driven Health Care 51.0%
plans will dominate 12.1%

A move to Individual coverage 56.8%
and HSAs 12.9%

Strongly Agree / Agree Disagree / Strongly Disagree


next 5 years?

All cost and quality data will be
47.4%
directly accessible to employees
20.3%
in advance of purchasing care

A return to more tightly 38.1%
controlled managed care plans 29.3%

Smaller provider networks based 33.6%
on quality and efficiency 22.0%



next 5 years?

Employers will move to a 37.2%
compensation-only approach 21.3%

No significant changes from 25.9%
current structure 40.0%

The U. S. will switch to a 7.5%
Canadian-style, tax-based system 62.1%



Shared Wisdom…
Powerful Results
 Talk with us after the seminar

– Representatives of Hierl Insurance
Inc will be available for further
discussion (920) 993-9573

 Call us for more detailed, company-
specific benchmarks and analysis


Shared Wisdom. Powerful Results.

About UBA is an alliance of the nation’s premier independent benefit advisory firms. By working
collaboratively, UBA members are better positioned to help employers and employees respond more
United Benefit Advisors efficiently and effectively to the challenges of an ever-changing employee benefits marketplace. By
(UBA) combining diverse talents, seasoned experience, innovative technologies, and strategic partnerships,
UBA Members offer employers exceptional employee benefits advisory services.

In only five years, UBA has become one of the nation’s five largest employee benefits advisory
organizations, with nearly 1,900 experienced benefits professionals located in 165 offices across the
country. UBA Members provide employee benefits consulting, brokerage services, and best-in-class
products to over 37,000 private corporations and public employers. As trusted advisors, UBA
Members help their clients manage nearly $16.5 billion annually in employee benefit expenditures on
behalf of nearly 5.4 million employees and their families. Visit www.benefits.com for more
information.

If You Believe There Has Be A Better Way To Manage Benefit Programs In Order to Get
Better, Long Term Results…, You’ll Want To Spend Some Time With Us

Our approach deals with a specific set of problems and will provide a clear, proactive strategy for
managing your risks. You’ll learn whether you’re paying money for unnecessary coverage, or if you
have an exposure(s) that’s gone undetected… and therefore not covered. We’ll show you how to
About detect if your employees are engaged in the success of your company or if they’ve become
Hierl Insurance Inc dissatisfied and see your company only as a source for a paycheck?

If you’re experiencing high turnover, declining productivity, uncovered claims, or any other symptoms
that are causing you to lose your best employees, we have the experience and proven strategies to
help you turn things around. We’ll help demonstrate The Real Bottom Line ™ and how you can
effectively measure the impact your programs are having on the success of your company.
Sit down with us and take just 60 minutes to share your challenges and frustrations. If we believe that
we can create a more effective strategy, we’ll put our full resources to work for you.

Visit us at www.hierl.com, or e-mail at ssmeaton@hierl.com.


2009 UBA Health Plan
Survey


Wellness & Consumer Driven Health Care

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