2013 NATIONAL SURVEY OF EMPLOYER-SPONSORED HEALTH PLANS Kosciusko / Ft. Wayne area

2013 NATIONAL SURVEY OFEMPLOYER-SPONSORED HEALTH PLANS

Kosciusko / Ft. Wayne area

March 11, 2014

© 2014 Mercer (US) Inc. 2April 20, 2023

Oldest Marking 29 years of measuring health plan trends

Largest 2,842 employers participated in 2013

Statistically valid Based on a probability sample -- only Mercer and Kaiser survey this way

Covers employers of all sizes, all industries, all regions Results project to all US employers with 10 or more employees

Most comprehensive Extensive questionnaire covers a full range of health benefit issues and strategies

About Mercer’s National Survey of Employer-Sponsored Health Plans

Employer size groups in presentation Small: 10-499 employees / Large: 500+ employees / Very large: 5,000+ employees

© 2014 Mercer (US) Inc.

Who’s in the audience?

• Employers (HR, benefits, CFO, etc.)

• Recruiters / Employment

• Healthcare Providers / Health Delivery Organizations

• Vendors / Carriers

• Brokers / Consultants

• Other category?

• Small 10 - 500

• Large 500 – 4,999

• Very Large 5,000+

3

© 2014 Mercer (US) Inc. 4April 20, 2023

Health benefit cost grew 2.1% in 2013 – a 16-year low Employers warned of a rebound in 2014

Most employers say health reform will increase their spending in 2014 Many take action to counter ACA cost challenges

CDHP enrollment continues to grow, matching enrollment in HMOs Employers use CDHPs to meet cost, choice and compliance goals

Health management programs stress innovation and engagement Most employers that measure ROI see lower trends

Widespread interest in private exchanges as a way to add choice While controlling cost and simplifying administration

Employers remain committed to sponsoring health benefits Sustainable health programs will require workforce planning, proven strategies

HIGHLIGHTS…………


*ProjectedSource: Mercer’s National Survey of Employer-Sponsored Health Plans; Bureau of Labor Statistics, Consumer Price Index, U.S. City Average of Annual Inflation

(April to April) 1990-2013; Bureau of Labor Statistics, Seasonally Adjusted Data from the Current Employment Statistics Survey (April to April) 1990-2013.

Cost growth slowed again in 2013, higher increases expected 2014Average total health benefit cost per employee rose just 2.1% in 2013

17.1%

12.1%

10.1%

8.0%

-1.1%

2.5%

0.2%

6.1%

8.1%

11.2%

14.7%

10.1%

7.5%

5.5%5.2%*

2.1%

4.1%

6.1%6.9%

6.3%6.1%6.1%6.1%7.3%

2.1%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Workers' earningsAnnual change in total health benefit cost per employee

Overall inflation

Cost

2014 rebound?

5

© 2014 Mercer (US) Inc. 6

Cost rose faster among larger employers, but mid-sized employers experienced the highest cost per employee

Employers with 5,000 or more

employees

All employers

+ 2.1%

+ 0.8%

+ 1.5%

+ 3.7%

Employerswith 10-499 employees

Employerswith 500-4,999

employees

Cost


Underlying cost trend still high at 8%, but employers plan to hold the average increase in per-employee cost to about 5%

Estimated cost increase to renew plans with no changes vs. actual increase after plan changes

* Projected

Cost


Cost shifting has been considerableAverage PPO deductible for individual, in-network coverageCost


Median cost sharing* amounts for:

Example 60%plan PPO HMO

HSA-eligible CDHP

Deductible $2,000 $500 $500 $1,500

Hospital coinsurance/copay 50% 20% $250 --

Out-of-pocket maximum $6,000 $2,250 -- $3,000

9

The typical employer plan still meets the ACA’s plan value requirement of 60% of covered expenses – with room for further cost shifting

Large employers

* Cost sharing for individual, in-network coverage

Cost

Do you know your plan’s actuarial relative value?


Don’t know Increase of

less than 3%

Increase of more than 10%

No increase in health

spending

Expected impact due to higher enrollment and fees in 2014

Wholesale/

Retail Services

Manufacturing

Government

Transportatio

n/

Communic./Utili

tyHealth

careFinance

Expect increase of 3% or more due to higher enrollment and fees, by industry

Most large employers say reform will boost health spending in 2014 – beyond normal cost increases – due to higher enrollment and fees

Increase of 5-10%

Increase of 3-4%

Cost

Last year’s


Employers’ success in bringing cost growth under control will be challenged by health reform

Employer actions holding cost down

ACA impacts pushing costs up

• Individual mandate

• Expanded eligibility

• Mandated coverages

• Conservative pricing by carriers

• Resetting benefit value consumer-directed health

plans greater employee cost-

sharing

• New focus on employee choice

• More sophisticated health management programs

• Market innovations creating more efficient health care delivery


Managing growth in enrollment by changing contribution strategies

Large employers

Raise employee contribution

percentage for dependent coverage

Raise employee contribution

percentage for employee-only

coverage

Other change

12

ACA


Employers taking bolder action to steer spouses to other coverageSpecial provisions concerning spouses with other coverage available

Large employers Very large employers

Spouses with other coverage are not

eligible

Spouses with other coverage are not

eligible

Spouses with other coverage must pay

surcharge

Spouses with other coverage must pay

surcharge

ACA

If you adopt this approach, be certain not to inadvertently discriminate!

[HCEs, Civil Rights, Statutory……]

13


But the shared responsibility requirements are just the beginning

Majority of large employers in danger of getting hit with excise tax by 2022

…but almost a third said avoiding the tax influenced health plan decisions for 2014

Percent of employers that would be subject to the excise tax if they made no changes to their current plan…

Avoiding the excise tax influenced health

plan decisions for 2014

Excise tax did not influence 2014

decisions Source: 2011 National Survey of Employer-Sponsored Health Plans

ACA


Taking steps now to avoid the excise tax in 2018

Large employers

For nearly a third of employers – 31% – concerns over the 2018 excise tax influenced decisions for 2104

Introduced a CDHP or took steps to increase enrollment in an existing CDHP

19%

Added or expanded health management programs 12%

Dropped a higher-cost health plan 11%

Unbundled dental and medical plans 4%

Other change(s) 12%

ACA

15


Consumer-Directed Health Plans have become mainstream!

CDHPs seen as central to meeting the challenges of health reform

Provide a low-cost

plan to newly eligible

employees

Encourage employees to use the health care system wisely

Avoid the excise tax


Use of consumer-directed health plans is likely to accelerate over the next three years

Large employers

By 2016, 64% of large employers expect to offer a CDHP

CDHP

17


CDHPs typically pass the 60% “test” and cost about 17%-20% less than PPO and HMO coverage

Medical plan cost per employee per year

HSA-eligible CDHP(Includes employer

contributions to HSA accounts)

PPO HMO

CDHP


Employers working to build enrollment in CDHPs

Large employers

HSA-based CDHP enrollment rises over time% choosing CDHP when offered w/other medical plans

Employer HSA funding drives enrollment . . .% choosing HSA when offered with other medical plans

Expect to offer a CDHP as full replacement 3 years from now

. . . but extensive communication is also important % choosing HSA when offered with other medical plans

Employer HSA contribution of $800+

Employer does not have contribution to HSA

CDHP


Reducing cost by adding choice – a win-win approach

Under health reform all individuals must have health insurance, so employers face rising enrollment and more diverse needs

Choice promotes efficiency

by allowing employees to

buy only what they need

Private exchanges add

choice without adding

administrative burden

Eases transition to sustainable program


PUBLIC VS PRIVATE EXCHANGES

Medical, prescription

Dental, vision, life, voluntary, plus more

Government sponsored

Broker, insurer, TPAtechnology firm

Actives, retirees

PUBLIC PRIVATEOpen Closed

Single or multiple carrier

Individuals Group plans

Insured or self-funded

21


Private health care exchanges poised for rapid growth

Considering for active employees

Considering for pre-Medicare-

eligible retirees

Considering for Medicare-eligible

retirees

Considering private exchanges for either actives

or retirees

One-fourth of employers are considering switching to a private exchange within two years, and 45% would consider

switching within five years

Choice


Mercer MarketplaceEfficient solutions for employers

Funding

DC or DB

Standard Plan Designs

Choice among multiple, pre-screened plans

Employee Communications and

Education

OnlineCall CenterPrint and email

Enrollment

Administration

• Eligibility determination

• Data-driven events

• Election Management

• Contribution calculation

Election Data

Deductions

Reporting and Premium Data

Carriers

Payroll

HR Profes-sionals

23


Early results from Mercer MarketplaceEmployers’ top three reasons for moving to Mercer Marketplace

Simplified administration and compliance

Ability to better manage future costs, defined contribution facilitation

Achieve immediate cost savings

63%

47%

41%

Note: Reflects % of early adopters ranking reason as a significant factor in their decision to move to Mercer Marketplace; for most clients, more than one reason played a significant role.

Choice

24


Right-sizing: Reduced number of over-insured

75%Typical range of value in current medical plans: 85%to

61%Mercer Marketplace

range of value: 92%to

2%Impact of right-sizing

on total cost (estimated): 5%toin year 1, and growing over time

Choice

25


Early results from Mercer MarketplaceMedical right-sizing in first year

Average value of medical plans pre-Marketplace80.4%

71.9% Average value of medical plans post-Marketplace

$800 Per employee cost reduction from right-sizing

Choice

26


Early results from Mercer MarketplaceMost employers providing at least three plan options

Choice

27


More employers using voluntary benefits to maintain employee benefit options as core benefit plans change

Large employers

Give employees opportunity to fill gaps in employer-paid benefits

Help employees take advantage of group purchasing power

Accommodate employee requests

Offer additional benefits at no cost to the employer

To maintain employee benefit options as core benefit plans change

Why employers offer a voluntary benefits program

Profile of a successful voluntary program

Employee-valued products

User-friendly platform

Multi-faceted enrollment solutions

Robust education and communication program

Program coordination

Choice


Voluntary Benefits Work / Life Benefits*

Disability

Vision

83%

77%

Fitness center or discounts

64%

Accident

Whole / universal life

Cancer / critical illness

59%

49%

43%

Legal consult / referral

Financial consult / referral

Dep. care resource / referral

Elder care resource / referral

41%

38%

32%

31%

Long-term care

Auto / Homeowners

Hospital indemnity

Pet

28%

19%

17%

9%

Telecommuting / Work from home

Adoption assistance

On-site / near-site dep. care

25%

22%

11%

29

Per

cent

of l

arge

em

ploy

ers

offe

ring

the

bene

fit

90%

60%

30%

0%

Expanding employees’ view of the whole benefit packageMeeting diverse needs without driving up employer costs

*Data on work/life benefits (with the exception of fitness centers) is from Mercer’s 2012 survey

Choice


Integrating voluntary + core benefits improves employee up-takePercent of large employers reporting increase in up-take in last 2 years

Voluntary benefits sponsors with integrated

platforms reporting growth in take-up

Voluntary benefits sponsors without integrated platforms reporting growth in take-up

Choice


Taking health management to a new level

Employers are banking on health management to control long-term costs. In 2013, employers took steps to:

Promote engagement

as well as

participation

Create a supportive work

environment

Measure results


Fewer employers are willing to offer only their health plan’s standard services

Large employers More employers are contracting

with specialty vendors and purchasing optional services

from their health plans

Through health plan – standard services only

Through health plan – some optional services

Contract with one or more specialty vendors

Health


Health management now the norm, addressing a full range of needs

Percent of employers offering program

Case management

Disease management

Nurse advice line

Health advocate

Health assessment

Lifestyle management

End-of-life case

management

Health

REACTIVE PROACTIVE

Addressing the continuum of health needs


Financial incentives are becoming the norm in health management programs, and participation rates are rising as a result

More employers are driving engagement

through financial incentives, most often cash or contribution reductions

Large employers using incentives

report higher participation rates*Average % of identified persons

actively engaged in program

Large employers Very large employers

Health assessment completion rate

Lifestyle management program participation

rate*

Validated biometric screening rate

Health


Engaging employees to improve health habits

Group activities and technology-based tools offered

Large employers

Worksite biometric screening event 53%

Business unit / location group challenges 45%

Onsite weight loss programs (such as Weight Watchers) 40%

Web-based portal with activity / incentive tracking 40%

Onsite exercise or yoga classes 39%

Personal challenges 33%

Peer-to-peer support 21%

Mobile apps for activity tracking / peer interactions 15%

None of these 22%

Health


Continued growth in use of outcomes-based incentives

More large employers linking incentives to what employees do about their health

Offer lower premium contributions to non-tobacco users

Provide incentives for achieving or maintaining targets for BP, BMI,

cholesterol

Health


Measuring health management ROI can be challenging, but results are encouraging

Very large employers

38% have formally measured ROI …

Yes

NoSubstantial positive impact on medical cost trend

Small positive impact on medical trend

No improvement in medical trend was found so far

…with 79% reporting a positive impact on medical plan trend

Health


The largest employers lead the way with innovations that reward high-quality, efficient providers

Value-based design

Surgical centers of excellence

Collective purchasing of medical benefits

High-performance networks

Telemedicine

Reference-based pricing

Medical homes

Health


Health reform has employers re-thinking workforce strategies

Building a sustainable health program in the post-reform world means looking at workforce issues as well as benefit plan design

Should we use more part-

timers to limit the number

of eligible employees?

Does a segmentation strategy make sense?

Stay in the game – or exit?


Requirement to extend coverage to all employees working 30 or more hours per week will hit some industries harder than others

Percent of large employers that currently do not offer coverage in a qualified plan to all employees working an average of 30 or more hours per week

Retail / wholesale

ManufacturingTransportation / Communication /

Utility

Government ServicesHealth care Financial services

Takes effect 1-1-15!

40


Likely response to ACA’s requirement that all employees working 30 or more hours per week be eligible for coverage

Based on large employers that do not currently offer coverage to all employees working 30 or more hours per week

41

Make all employees eligible for the full-time employee plans(s)

Add a new lower-cost option for all employees

Use segmentation strategy: Offer a lower-cost plan to newly eligible employees

Pay shared responsibility penalty as necessary

and…..


About one in ten large employers will reduce some workers’ hours to limit the number of newly eligible employees

Will have fewer employees working 30

hours or more per week

Will make some other change in workforce

strategy

Will make no adjustments

Already in compliance

(no change needed)


Large employers remain committed to offering health coverage

Percent of employers that say they are “very likely” or “likely” to terminate plans within the next five years

Employers with fewer than 50 employees

Employers with 50-199 employees

Employers with 500 or more employees

43

Employer profile

© 2014 Mercer (US) Inc. MERCER NATIONAL SURVEY OF EMPLOYER-SPONSORED HEALTH PLANS

About the Survey

EmployersNumber of participants

Kosciusko - Ft. Wayne 14

Indiana 500+ 42

50-499 Employees 720

500-4,999 Employees 1,172

• The employer groups shown in this presentation are:

• The map below shows which states fall into each of the four major geographic regions:

45


Demographics

Kosciusko - Ft. Wayne Indiana 500+

50-499 Employees

500-4,999 Employees

Average employee age 43 44 41 42

% of female employees 45% 45% 48% 52%

% of union employees 13% 11% 6% 16%

Generally, every 1 year of age = +3% increase in cost

And women incur more cost than men, until around age 50…. the the reverse is true.

Unions tend to negotiate for richer (more expensive) plans.

46

Medical plan prevalence


Type of medical plan offeredPercent of employers offering each type of medical plan

48


71%

64%

61%

34%

14%

17%

6%

16%

11%

12%

29%

36%

4%

7%

5%

14%

PPO / POS HMO HSA-eligible CDHP HRA-based CDHP

Kosciusko - Ft. Wayne

Indiana 500+

50-499 Employees

500-4,999 Employees

Employee enrollmentPercent of all covered employees enrolled in each type of medical plan

49

Total health benefit cost


+1.2% +6.1% -1.1% +1.5%

$11,904

$10,214$11,303$11,141

$10,326$11,222$11,115$11,243

Kosciusko - Ft. Wayne Indiana 500+ 50-499 Employees 500-4,999 Employees

2012 % Change 2013

*Total health cost includes medical, dental, Rx and specialty benefits

Average total health benefit cost* per employee

51


Average total health benefit cost as a percentage of payroll for 2012

10.5%

16.7%

14.4% 14.7%


52


Expected average increase in total health benefit cost per employee for 2014

*Changes to plan design or health plan vendor


50-499 Employees

500-4,999 Employees

Before making any changes*

7.1% 7.5% 8.9% 7.5%

After making changes* 3.2% 4.4% 5.4% 5.0%

53

Employee contributions


Employee contribution for individual coverageAverage monthly contribution ($)


50-499 Employees

500-4,999 Employees

PPO / POS $100 $117 $130 $122

HMO $111 ID $146 $119

HSA-eligible CDHP $59 $66 $73 $74

HRA-based CDHP $116 ID $112 $97

Dental $16 $14 $23 $16

55


Employee contribution for individual coverageAverage contribution as a % of premium


50-499 Employees

500-4,999 Employees

PPO / POS 18% 22% 25% 23%

HMO 19% ID 31% 23%

HSA-eligible CDHP 16% 15% 22% 18%

HRA-based CDHP 19% ID 26% 22%

Dental 36% 47% 64% 50%

56


Employee contribution for family coverage*Average monthly contribution ($)

*Family coverage is defined as coverage for employee, spouse and two children


50-499 Employees

500-4,999 Employees

PPO / POS $292 $334 $550 $419

HMO $322 ID $553 $404

HSA-eligible CDHP $210 $195 $324 $270

HRA-based CDHP $336 ID $471 $358

Dental $43 $48 $67 $52

57


Employee contribution for family coverage*Average contribution as a % of premium

*Family coverage is defined as coverage for employee, spouse and two children


50-499 Employees

500-4,999 Employees

PPO / POS 18% 22% 50% 31%

HMO 20% ID 47% 31%

HSA-eligible CDHP 20% 16% 35% 25%

HRA-based CDHP 26% ID 38% 30%

Dental 36% 51% 70% 55%

58


Salary-based contributions


50-499 Employees

500-4,999 Employees

Contribution is same percentage of salary for all employees

0% 0% 0% 2%

Use salary bands 7% 7% 1% 11%

Median number of salary bands

3 ID ID 3

59

Coverage eligibility, election



50-499 Employees

500-4,999 Employees

Average % of employees waiving own coverage

22% 19% 20% 18%

% of employers offering incentive to waive coverage

14% 15% 11% 17%

Coverage waivers

61



50-499 Employees

500-4,999 Employees

% of employees electing dependent coverage

55% 60% 47% 58%

Make spouses ineligible for coverage if other coverage is available

29% 21% 8% 7%

Surcharge applies for spouses with other coverage available

21% 21% 2% 8%

Offer same-sex domestic partner coverage

0% 33% 51% 50%

Dependent coverage

62



50-499 Employees

500-4,999 Employees

Offer coverage to part-time employees*

46% 64% 43% 64%

Average number of hours / week required for coverage

23 23 27 24

Part-time and full-time employees are offered different health plans

50% 19% 7% 7%

Part-time employees

*Among employers that have part-time employees

63


Offer mini-med or limited health plan

14%

10%

2%

6%


Eliminated 2014Next up: Skinny Med!

Covers only 100% preventive care; qualifies as MEC and meets

individual mandate

64

Strategic planning


Expect to offer an account-based CDHP in next three years

43%

26%

16% 16%

50%

60%

24%

47%


As only type of plan offered forat least some employeesAlongside other medical planchoices for all employees

66


Offer on-site or near-site medical services*

30%

35%

27%

20%

35%

16%


Occupational health clinic

Primary care clinic

*Based on employers with 500 or more employees

67



50-499 Employees

500-4,999 Employees

Accountable care organizations

9% 12% ID 9%

Collective purchasing of medical benefits

0% 16% ID 13%

Data warehouse 45% 35% ID 18%

High-performance networks 27% 21% ID 14%

Medical homes 0% 8% ID 5%

Reference-based pricing 0% 8% ID 10%

Surgical centers of excellence

36% 29% ID 21%

Telemedicine 0% 8% ID 10%

Value-based plan design 27% 32% ID 26%

Advanced strategies used*

*Based on employers with 500 or more employees

68



50-499 Employees

500-4,999 Employees

Raise employer contribution by a set amount each year, employees absorb the rest of the increase

0% 7% 18% 12%

Provide same dollar contribution for all plans, employees pay more for more expensive coverage

31% 24% 43% 29%

Provide employees with subsidy to purchase coverage on their own

0% 0% 10% 5%

Some other defined contribution approach

15% 10% 11% 11%

Not currently using or considering defined contributions

54% 64% 44% 58%

Considering (or currently using) a "defined contribution" approach to funding health coverage

69



50-499 Employees

500-4,999 Employees

For active employees 25% 26% 39% 27%

For pre-Medicare-eligible retirees

0% 20% 24% 16%

For Medicare-eligible retirees

8% 20% 17% 13%

Would not consider a private health exchange within five years

67% 60% 57% 64%

Would consider providing a private health exchange within five years

70


Health Care Reform


Provide coverage to employees working an average of 30+ hours per week

71% 71%

75%

68%


72



50-499 Employees

500-4,999 Employees

Make all employees eligible for current full-time employee plan(s)

100% 92% 82% 71%

Use a "segmentation strategy"

0% 0% 8% 9%

Add a lower-cost plan and offer it to all employees

25% 8% 28% 34%

Make no changes to eligibility and pay the shared responsibility penalty

0% 8% 7% 9%

Likely actions to extend coverage to employees working 30+ hours per week*

*Based on employers not currently covering employees working 30+ hours per week

73


Likelihood of terminating medical plan(s) within the next five years

0% 0%

6%

1%

8%

3%

16%

6%


Very likely

Likely

74

Preferred Provider Organization (PPO) / Point-of-Service Plans (POS)


+1.1% +7.2% -1.8% +0.2%

$12,574

$9,843$10,645$10,624

$10,020

$11,729

$10,276$10,389


2012 % Change 2013

Average PPO / POS* cost per employee, for active employees

*Includes traditional indemnity plans

76


In-networkKosciusko - Ft. Wayne Indiana 500+

50-499 Employees

500-4,999 Employees

Deductible required (% of employers) 100% 100% 93% 90%

Median individual deductible amount $500 $475 $1,000 $500

Median family deductible amount $1,200 $1,000 $2,600 $1,000

PPO / POS deductibles

Out-of-network

Deductible required (% of employers) 86% 94% 94% 95%

Median individual deductible amount $1,275 $1,000 $2,000 $1,000

Median family deductible amount $2,850 $2,000 $4,000 $2,000

77



50-499 Employees

500-4,999 Employees

% requiring copay 86% 78% 86% 83%

% requiring coinsurance 43% 28% 13% 22%

No cost-sharing is required

0% 6% 6% 1%

Median copay amount $25 $25 $25 $25

PPO / POS in-network primary care physician (PCP) visit cost-sharing

78



50-499 Employees

500-4,999 Employees

% requiring higher copay for specialist

43% 47% 46% 47%

Median copay amount, when higher than PCP

$35 $35 $50 $40

PPO / POS in-network specialist visit cost-sharing

79



50-499 Employees

500-4,999 Employees



No cost-sharing is required 0% 0% 5% 3%

Median coinsurance amount 40% 40% 40% 40%

PPO / POS out-of-network physician visit cost-sharing

80



50-499 Employees

500-4,999 Employees

% requiring deductible / per-admission copay

0% 9% 13% 21%



Median deductible amount ID ID $250 $250


PPO / POS in-network hospital stay cost-sharing

81



50-499 Employees

500-4,999 Employees

% requiring deductible / per-admission copay

0% 3% 11% 13%



Median deductible amount ID ID $500 $400


PPO / POS out-of-network hospital stay cost-sharing

= 80% in / 60% out

82



50-499 Employees

500-4,999 Employees



Subject to plan's overall deductible

14% 16% 7% 7%

No cost-sharing for emergency room visit

0% 0% 3% 0%

Median emergency room copay amount

$150 $100 $125 $100

PPO / POS emergency room visit cost-sharing

83


Individual OOP maximumKosciusko - Ft. Wayne Indiana 500+

50-499 Employees

500-4,999 Employees

Median for in-network services

$2,000 $2,000 $3,000 $2,250

Median for out-of-network services

$4,000 $4,250 $5,250 $4,000

PPO / POS out-of-pocket (OOP) maximums*

Family OOP maximum


$4,000 $4,100 $6,000 $5,000


$9,000 $9,000 $11,000 $9,000

*Includes deductible

84



Indiana 500+

50-499 Employees

500-4,999 Employees

PPO / POS funding method

85

HSA-eligible Consumer-Directed Health Plans (CDHP)


-4.9% +2.3% +11.9% +4.9%

$8,803 $8,667 $8,668$8,263

$7,742

$8,609$9,429

$8,966


2012 % Change 2013

Average HSA-eligible CDHP cost per employee*, for active employees

*Includes employer account contribution, if any

87


Individual deductibleKosciusko - Ft. Wayne Indiana 500+

50-499 Employees

500-4,999 Employees


$1,500 $1,500 $2,500 $1,500


$4,450 $3,000 $4,000 $3,000

HSA-eligible CDHP deductibles

Family deductible


$3,500 $3,000 $5,000 $3,000


$8,450 $6,000 $8,000 $6,000

88



50-499 Employees

500-4,999 Employees




25% 12% 43% 31%

Median coinsurance amount

20% 20% 20% 20%

HSA-eligible CDHP in-network physician visit cost-sharing

89



50-499 Employees

500-4,999 Employees




0% 0% 22% 13%


35% 40% 40% 40%

HSA-eligible CDHP out-of-network physician visit cost-sharing

90



50-499 Employees

500-4,999 Employees

Median for in-network services $3,950 $3,300 $4,000 $3,000


$9,750 $7,250 $6,500 $6,000

HSA-eligible CDHP out-of-pocket (OOP) maximums*

Family OOP maximum

Median for in-network services $7,150 $6,500 $7,500 $6,000


$19,500 $16,000 $13,000 $12,000


91


Preventive Rx covered at separate, higher benefit level


50-499 Employees

500-4,999 Employees

Not subject to deductible 0% 8% 4% 23%

100% coverage for at least some Rx categories

25% 42% 3% 15%

Lower cost-sharing, but not 100%

0% 4% 3% 6%

Non-preventive prescription drugs subject to same coinsurance as any other medical expense

100% 77% 73% 67%

HSA-eligible CDHP prescription drug coverage


92


Average % of eligible employees enrolled in HSA-eligible CDHP when offered as an option

26%

36%

27%

38%


93


Fee paid by:Kosciusko - Ft. Wayne Indiana 500+

50-499 Employees

500-4,999 Employees

Employer 38% 58% 34% 60%

Employee 25% 19% 21% 15%

No vendor fee 38% 19% 27% 17%

Not applicable – Employees independently select HSA trustee

0% 4% 19% 8%

HSA-eligible CDHP health savings account core / monthly maintenance fee

94


Percent of employers making an HSA account contribution

75%

64%

81%88%


95


Employer contribution to account


50-499 Employees

500-4,999 Employees

Median for employee-only coverage

$735 $750 $800 $500

Median for family coverage $1,350 $1,500 $1,500 $1,000

HSA-eligible CDHP employer contributions Among employers contributing to the account

Type of employer account contribution

Matching contributions 29% 5% 5% 8%

Incentive-based contributions 0% 5% 2% 20%

Fixed, non-conditional contributions

71% 90% 95% 82%

96


25%

11%

24%

14%

38%

34%

43%

43%

37%

55%

33%

43%

Fully pre-fund Fund every paycheck Fund monthly or on other schedule


Indiana 500+

50-499 Employees

500-4,999 Employees

HSA-eligible CDHP funding schedule for employer account contributions

97


57%

27%

58%

25%


Offer a limited-purpose

Caution: Can be confusing! True or False?

FSA in conjunction with HSA

98

HRA-based Consumer-Directed Health Plans (CDHP)


+6.1%

$10,586$11,206

$11,892


2012 % Change 2013

Average HRA-based CDHP cost per employee*, for active employees

*Includes employer account contribution

100


Individual deductibleKosciusko - Ft. Wayne Indiana 500+

50-499 Employees

500-4,999 Employees


$3,750 ID $3,000 $1,500


$3,750 ID $5,000 $2,500

HRA-based CDHP deductibles

Family deductible


$5,000 ID $6,000 $3,125


$5,000 ID $10,000 $5,000

101



50-499 Employees

500-4,999 Employees

% requiring copay 0% ID 43% 16%

% requiring coinsurance 0% ID 28% 69%


100% ID 29% 18%


ID ID ID 20%

HRA-based CDHP in-network physician visit cost-sharing

102



50-499 Employees

500-4,999 Employees

% requiring copay 0% ID 14% 4%

% requiring coinsurance 50% ID 76% 96%


50% ID 9% 0%


30% ID 30% 40%

HRA-based CDHP out-of-network physician visit cost-sharing

103



50-499 Employees

500-4,999 Employees

Median for in-network services $2,500 ID $5,000 $3,000


$5,000 ID $6,000 $5,000

HRA-based CDHP out-of-pocket (OOP) maximums*

Family OOP maximum

Median for in-network services $3,800 ID $10,000 $6,000


$10,000 ID $18,000 $10,000


104



50-499 Employees

500-4,999 Employees

Median for employee-only coverage

$1,575 ID $1,250 $750

Median for family coverage

$1,950 ID $2,000 $1,500

HRA-based CDHP employer contribution to account

105


Place maximum on amount that can accumulate in account

46%

57%

50%


106


Average % of eligible employees enrolled in HRA-based CDHP when offered as an option

35%

52%

80%


107

Prescription drug benefits


3.9%3.5%

2.2%

5.6%

2.5%

3.7% 3.6%

5.5%


At last renewal

Expected at next renewal

Annual change in cost per employee for prescription drug benefits

109


RetailKosciusko - Ft. Wayne Indiana 500+

50-499 Employees

500-4,999 Employees

Same level for all drugs 14% 12% 6% 5%

2 levels: generic, brand 0% 0% 13% 7%

3 levels: generic, formulary, non-formulary

29% 56% 56% 71%

4 or more levels 50% 27% 21% 15%

Use coinsurance for 1 or more drug categories

58% 55% 23% 26%

Employee cost-sharing requirements for prescription drug plans

Mail-order

Same level for all drugs 8% 12% 7% 6%

2 levels: generic, brand 0% 0% 9% 8%

3 levels: generic, formulary, non-formulary

46% 63% 60% 73%

4 or more levels 38% 15% 16% 10%

Use coinsurance for 1 or more drug categories

45% 45% 22% 21%

110


RetailKosciusko - Ft. Wayne Indiana 500+

50-499 Employees

500-4,999 Employees

Generic $13 $10 $12 $11

Brand-name formulary $25 $28 $32 $31

Brand-name non-formulary $45 $47 $55 $50

Copayments in prescription drug plansAverage copayment among employers with three payment levels

Mail-order (for 90-day supply)

Generic $21 $21 $22 $21

Brand-name formulary $46 $55 $66 $62

Brand-name non-formulary $92 $100 $114 $105

111


86% 83%

96%

82%

14% 17%

3%

17%


Through the medical plan

Through a separate Rx plan (carve-out)

How drug benefits are provided

112



50-499 Employees

500-4,999 Employees

Mandatory generics (with or without physician override)

18% 26% ID 32%

Step therapy (generics / preferred brands required before non-preferred brands)

55% 69% ID 49%

Mandatory mail-order (maintenance drugs must be filled by mail after 2-4 fills at a retail pharmacy)

18% 12% ID 11%

Retail penalty program (maintenance drugs are subject to higher cost sharing after 2-4 fills at a retail pharmacy)

9% 7% ID 7%

Drug plan features among employers with 500+ employees

113



50-499 Employees

500-4,999 Employees

Offer lower cost-sharing when filled at specialty pharmacy

10% 12% ID 9%

Exclude some or all specialty medications from coverage under the retail pharmacy benefit or medical benefit

40% 39% ID 18%

Other method 20% 12% ID 12%

Do not steer members to specialty pharmacy

30% 37% ID 62%

Encourage use of specialty pharmacyAmong employers with 500 or more employees

114

Health management programs



50-499 Employees

500-4,999 Employees

Health assessment (HA) 77% 90% 51% 78%

Any disease management (DM) program

79% 93% 53% 79%

Lifestyle management / behavior modification

69% 74% 47% 65%

Nurse advice line 79% 87% 59% 79%

Health advocate services 46% 62% 38% 51%

Case management 77% 90% 48% 81%

End-of-life case management

17% 26% 28% 46%

Onsite fitness facility / subsidized or discounted

57% 76% 42% 63%

Type of health management programs offered

116



50-499 Employees

500-4,999 Employees

Face-to-face individual coaching

44% 52% 21% 37%

Telephonic coaching 78% 81% 78% 80%

Web-based individual coaching (email, texting)

78% 64% 64% 69%

Online coaching modules 56% 56% 67% 71%

Type of coaching in lifestyle management program*

*Among employers that offer lifestyle management programs

117


Spouses eligible for key elements of health management program

64%68%

83%

100%


118


62%56%

50% 52%

8%

22%

12%

23%

46% 47%

16%

35%


Through the health plan, standard services only

Through the health plan, optional services

Through one or more specialty vendors

How disease / health management programs are offered

119



50-499 Employees

500-4,999 Employees

Business unit / location group challenges

29% 45% 24% 44%

Personal challenges 43% 43% 17% 32%

Worksite biometric screening event

64% 64% 22% 52%

Onsite exercise or yoga classes

21% 43% 16% 37%

Onsite weight loss programs

29% 40% 11% 38%

Web-based portal with activity or incentive tracking

29% 33% 20% 39%

Mobile apps for activity tracking or peer interaction

7% 17% 8% 14%

Peer-to-peer support 21% 24% 16% 21%

None of the above 21% 12% 51% 23%

Other wellness activities offered

120


61% 64%

44% 44%

77%71%

28%

38%

48%

31%

11%15%

48%

33%

21% 20%


Health assessment – % of eligible employees

Validated biometric screening – % of eligible employees

Disease management – % of identified persons actively engaged

Lifestyle program – % of identified persons actively engaged

Program participation rates

121



50-499 Employees

500-4,999 Employees

Financial rewards 45% 53% 23% 44%

Financial penalties 27% 24% 8% 15%

Make charitable contributions on behalf of members

0% 0% 3% 2%

Non-financial rewards 0% 6% 4% 4%

Do not use any incentives 27% 26% 70% 45%

Use incentives in connection with health management program

122


Use incentives or penalties to encourage participation in:


50-499 Employees

500-4,999 Employees

Health assessment, when offered

57% 46% 20% 43%

Validated biometric screening

40% 41% 9% 30%

Lifestyle management program, when offered

29% 40% 13% 28%

Health management incentives / penalties

123



50-499 Employees

500-4,999 Employees

Require multiple actions to earn incentive (or use point system)*

0% 25% 25% 46%

Use outcomes-based incentives for achieving, maintaining or progressing toward specific health status targets

27% 27% 15% 20%

Maximum annual value of outcomes-based incentives an employee can earn (median)

$860 ID $200 $350

Health management incentives / penalties continued

* Among employers offering incentives

124



50-499 Employees

500-4,999 Employees

Cash / gift cards 25% 42% 45% 40%

Financial contribution to HRA, HSA, FSA

25% 25% 16% 17%

Lower premium contributions

50% 42% 46% 39%

Lower deductible, copay or other cost sharing

0% 0% 11% 5%

Median incentive* $85 $197 $200 $120

Type of incentives used for health assessmentAmong employers offering HA incentive

*Among employers that offer incentives in the form of cash, lower premium contribution or financial contribution to employee account

125



50-499 Employees

500-4,999 Employees

Cash / gift cards 25% 38% 35% 33%


25% 23% 20% 16%


75% 54% 44% 42%


25% 8% 12% 5%

Type of incentives used for validated biometric screeningAmong employers offering biometric screening incentive

* Among employers offering biometric screening incentive

126



50-499 Employees

500-4,999 Employees

Cash / gift cards 0% 30% 42% 50%


0% 20% 15% 11%


50% 50% 27% 25%


0% 0% 14% 3%

Type of incentives used for lifestyle managementAmong employers offering lifestyle management incentive

* Among employers offering lifestyle management incentive

127



50-499 Employees

500-4,999 Employees

Lower premium contribution 14% 24% 5% 16%

Other incentive 0% 19% 2% 7%

Provide incentive for non-use of tobacco

128

Dental benefits


+1.0% -0.6% -6.5% +2.2%

$622

$693

$796$779$741

$626$595 $601


2012 % Change 2013

Average cost of dental coverage, per employee

130



50-499 Employees

500-4,999 Employees

Active PPO 23% 48% 50% 51%

Passive PPO 69% 52% 26% 42%

Dental HMO 15% 5% 8% 13%

No provider network 8% 10% 20% 7%

Type of dental plan offered

131



50-499 Employees

500-4,999 Employees

Sealants 85% 79% 76% 78%

Implants 62% 61% 53% 54%

Treatment of TMJ 23% 21% 32% 23%

Posterior composites 54% 32% 47% 41%

Dental services covered

132


Median coinsurance amount paid by plan for:


50-499 Employees

500-4,999 Employees

Preventive services (Type A) 100% 100% 100% 100%

Basic restorative services (Type B)

80% 80% 80% 80%

Major restorative services (Type C)

50% 50% 50% 50%

Dental plan coinsurance

133


Individual deductibleKosciusko - Ft.

Wayne Indiana 500+50-499

Employees500-4,999

Employees

% requiring deductible 77% 67% 67% 77%

Median deductible $50 $50 $50 $50

Dental plan deductibles for restorative services

Family deductible

% requiring deductible 77% 67% 64% 76%

Median deductible $150 $150 $150 $150

Preventive care is subject to deductible

8% 10% 15% 7%

134



50-499 Employees

500-4,999 Employees

Median maximum annual benefit

$1,000 $1,500 $1,500 $1,500

Median lifetime maximum orthodontic benefit

$1,000 $1,500 $1,000 $1,500

Dental plan maximums

135

Other benefits



50-499 Employees

500-4,999 Employees

Accident 64% 55% 55% 59%

Cancer / critical illness 36% 38% 48% 44%

Disability 79% 81% 76% 84%

Whole / universal life 57% 43% 60% 50%

Vision 71% 83% 67% 77%

Hospital indemnity 21% 12% 29% 17%

Long-term care 21% 24% 26% 28%

Auto / homeowners 21% 31% 3% 18%

Pet 0% 7% 2% 9%

Voluntary insurance benefits offered

137


Health care FSAKosciusko - Ft. Wayne Indiana 500+

50-499 Employees

500-4,999 Employees

% offering health care FSA 71% 90% 48% 84%

Average employee participation

26% 19% 27% 22%

Average annual voluntary contribution

$1,571 $1,440 $1,238 $1,354

Average % of contribution dollars forfeited in 2012

9% 10% 3% 5%

Flexible spending accounts (FSA)

Dependent care FSA

% offering dependent care FSA

71% 90% 46% 83%

Average employee participation

3% 3% 8% 6%

Average annual voluntary contribution

$3,282 $3,086 $2,987 $3,257

Average % of contribution dollars forfeited in 2012

2% 2% 1% 2%

138

Retiree health care


Offer retiree coverage*

36%33%

4%

21%

7%

14%

4%

16%


To pre-Medicare-eligible retirees

To Medicare-eligible retirees

*To most retirees, on an ongoing basis (new hires will be eligible)

140


Pre-Medicare-eligible retirees


50-499 Employees

500-4,999 Employees

Private exchange or connector

0% 0% 1% 1%

Premium reimbursement plan, health reimbursement account, or other subsidy

0% 2% 1% 4%

Provide a subsidy or other assistance to retirees purchasing health coverage independently

Medicare-eligible retirees

Private exchange or connector and a financial contribution

7% 7% 0% 1%

Private exchange or connector, but not a contribution

7% 2% 1% 1%

Premium reimbursement plan, health reimbursement account, or other subsidy

7% 2% 0% 4%

141



50-499 Employees

500-4,999 Employees

Receive 28% subsidy for all / most covered retirees

ID ID ID 34%

Offer a plan that wraps around a PDP

ID ID ID 24%

Contract with vendor to offer PDP, EGWP or MA-PD plan

ID ID ID 5%

Continue to provide drug coverage through standard plan and do not receive subsidy

ID ID ID 27%

Some other approach ID ID ID 3%

Current approach to coordinating with Medicare Part D prescription drug benefit*

* Based on employers with 500 or more employees

142



Indiana 500+

50-499 Employees

500-4,999 Employees

Contribution requirements for retiree-only coverage*Pre-Medicare-eligible retirees


143


8% 49% 43%

Employer pays all Cost is shared Retiree pays all


Indiana 500+

50-499 Employees

500-4,999 Employees

Contribution requirements for retiree-only coverage*Medicare-eligible retirees


144



50-499 Employees

500-4,999 Employees

Pre-Medicare-eligible retirees

65% ID ID 32%

Medicare-eligible retirees ID ID ID 34%

Average retiree contribution* as a percent of premium, when cost is shared

*For retiree-only coverage. Based on employers with 500 or more employees.

145


Expect to continue offering retiree health coverage to new hires for the next five years*

50%

44%

45%


*Among employers that currently offer retiree health benefits to new hires and have 500 or more employees.

146


Please participate

in our next national survey!

(and you’ll get your own customized report!)

[email protected] or 317-261-9586

147

Definitions


Definitions

• A consumer-directed health plan eligible for a Health Savings Account is a high-deductible health plan with an employee-controlled account. Employer contributions are optional. Account funds roll over at year end and are portable.

• A consumer-directed health plan with a Health Reimbursement Account is a health plan with an employer-funded spending account. Account funds may roll over at year end, but are not portable.

• Total health benefit cost is the total gross cost for all medical, dental, prescription drug, MH / SA, vision and hearing benefits for all covered active employees and their dependents divided by the number of enrolled employees. Total gross annual cost includes employer contributions to a Health Savings Account. Employee contributions are also included but not employee out-of-pocket expenses.

• Medical plan cost is the total gross cost for medical plans divided by the number of enrolled employees. Prescription drug, mental health, vision and hearing benefits for all active employees and their covered dependents are included if part of the plan. Dental benefits, even if a part of the plan, are not included in these costs. CDHP cost includes any employer account contribution.

• Nationally projectable PPO/POS and HMO medical plan costs for 2013 have been restated to include all prescription drug benefit costs (formerly, cost for carve-out prescription drug plans was not included in the medical plan cost, but will be going forward).


Definitions, continued

• A mini-med or limited plan is a health insurance plan that provides far lower benefits than the typical comprehensive major medical plan. The annual maximum amount payable typically ranges from $1,000 to $50,000.

• Unless otherwise noted, employers with multiple plans of the same type were asked to respond for the largest plan of each type (i.e., the one with the largest enrollment).

• Family coverage is the coverage level for an employee, spouse and two children.

• A private exchange is a marketplace for insurance run by a private company or non-profit corporation that offers a choice of health plans and possibly voluntary products and services. Employers often provide a set contribution for each employee to spend on insurance. The exchange also typically provides an enrollment and administration platform with decision-support tools for employees to help them select appropriate coverage.

Documents

2013 NATIONAL SURVEY OF EMPLOYER-SPONSORED HEALTH PLANS Kosciusko / Ft. Wayne area