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The 2014 Mercer National Survey of Employer-Sponsored Health Plans
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Mercer’s National Survey of Employer-Sponsored Health Plans 2014
SOURCE: MERCER’S NATIONAL SURVEY OF EMPLOYER-SPONSORED HEALTH PLANS
Summary:
Modest health benefit cost growth continues as consumerism kicks into high gear
• Mercer survey finds average total health benefit cost per employee rose
3.9% in 2014
• Enrollment in high-deductible, consumer-directed health plans (CDHPs)
jumps from 18% to 23% of all covered employees following a surge of
new implementations
• Nearly half of large employers (48%) now offer a CDHP, up from 39%
• Private exchanges used by 3% of large employers, with 28% likely to
make the shift within five years
• See selected findings in the following slides and read the full press
release here
1
SOURCE: MERCER’S NATIONAL SURVEY OF EMPLOYER-SPONSORED HEALTH PLANS November
20, 2014
*Projected
Source: 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) 1993-2014; Bureau of Labor Statistics, Seasonally Adjusted Data from the
Current Employment Statistics Survey (April to April) 1993-2014.
FIGURE 1
Average annual health benefit cost increases still low, but edging up
8.0%
-1.1%
2.1%
2.5%
0.2%
6.1%
7.3%
8.1%
11.2%
14.7%
10.1%
7.5%
6.1% 6.1% 6.1%6.3%
5.5%
6.9%
6.1%
4.1%
2.1%
3.9%
4.6%*
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Workers' earnings
Annual change in total health benefit cost per employee
Overall inflation
SOURCE: MERCER’S NATIONAL SURVEY OF EMPLOYER-SPONSORED HEALTH PLANS
FIGURE 2
Employers may see jump in enrollment as they comply with ACA requirement to extend coverage to all employees working 30+ hours/weekLarge employers (500 or more employees)
Took action to comply in 2014,
15%
Waited to comply until
2015, 23%
Already in compliance with
ACA requirement,
62%
SOURCE: MERCER’S NATIONAL SURVEY OF EMPLOYER-SPONSORED HEALTH PLANS
FIGURE 3
Jumbo employers added surcharges in 2014 for employees’ spouses with other coverage available
7%9%9% 9%
2013
2014
3%
20%
5%
27%
2013
2014
Employers with 500 or more employees
Employers with 20,000 or more employees
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
SOURCE: MERCER’S NATIONAL SURVEY OF EMPLOYER-SPONSORED HEALTH PLANS
FIGURE 4
Sharp increase in offerings of consumer-directed health plansPercent of employers offering/likely to offer CDHP, by employer size
Number of employees 2010 2011 2012 2013 2014
Very likely
to offer in
2017
All employers
(10+ employees) 17% 20% 22% 23% 27% 36%
All large employers
(500+ employees) 23% 32% 36% 39% 48% 66%
Jumbo employers
(20,000 + employees) 51% 48% 59% 63% 72% 88%
SOURCE: MERCER’S NATIONAL SURVEY OF EMPLOYER-SPONSORED HEALTH PLANS
61%
61% 8%
69%
69%
69%
67%
65%
64%
61%
24%
23%
23%
21%
19%
20%
18%
18%
16%
3%
5%
7%
9%
11%
13%
16%
18%
23%
1
1
1
1
1
3
3 9%2006
2007
2008
2009
2010
2011
2012
2013
2014
Traditional indemnity plan PPO POS PPO/POS* HMO CDHP
FIGURE 5
CDHP enrollment growth accelerated in 2014Percentage of all covered employees enrolled in each plan type
*Combined in 2008 due to declining offerings of/enrollment in POS plans. Includes traditional indemnity plans beginning in 2013.
SOURCE: MERCER’S NATIONAL SURVEY OF EMPLOYER-SPONSORED HEALTH PLANS
$10,664 $11,052
$8,789
PPO HMO HSA-eligible CDHP
FIGURE 6
Employers save with HSA-based CDHPs: They cost 18% less than PPOs and 20% less than HMOs in 2014 Medical plan cost per employee (includes employer contributions to HSA accounts)
SOURCE: MERCER’S NATIONAL SURVEY OF EMPLOYER-SPONSORED HEALTH PLANS
31%35%
39%
47%51%
33%
39%
45%
52%
58%
2018 2019 2020 2021 2022
All employers
Large employers (500+employees)
FIGURE 7
About a third of employers at risk of hitting excise tax threshold in 2018 Percentage of employers that will be subject to tax by the specified year if they make no changes to their current plans
Estimates based on data from Mercer’s National Survey of Employer-Sponsored Health Plans 2014; premium trended at 6%, tax threshold trended at 3% for 2019 and 2% for future years
SOURCE: MERCER’S NATIONAL SURVEY OF EMPLOYER-SPONSORED HEALTH PLANS
FIGURE 8
Making consumerism work: Employers provide support to help employees manage their health care spending
Large employers
(500 or more
employees)
Jumbo employers
(20,000 or more
employees)
Transparency tools 77% 86%
Telehealth services 18% 34%
Voluntary benefits offered specifically
to fill gaps in employer-paid benefits
77% 74%
SOURCE: MERCER’S NATIONAL SURVEY OF EMPLOYER-SPONSORED HEALTH PLANS
FIGURE 9
Majority of large employers expect to offer a CDHP by 2017 – but most see it as an option, rather than a full replacement
18%
48%
34%
26%
62%
12%
Large employers (500+ employees)
Jumbo employers (20,000+employees)
Will offer along with other medical plan option(s)
Will not offer CDHPWill offer CDHP as a full replacement to
at least some employees within the next 3 years
SOURCE: MERCER’S NATIONAL SURVEY OF EMPLOYER-SPONSORED HEALTH PLANS
23%
12%
6%
16%
6%4%
2013
2014
Employers with 200-499 employees
FIGURE 10
Fewer employers than ever expect to drop their health plansPercent of employers that say they are “very likely” or “likely” to terminate plans within the next five years
Employers with 50-199 employees
Employers with 500 or more employees
SOURCE: MERCER’S NATIONAL SURVEY OF EMPLOYER-SPONSORED HEALTH PLANS
About Mercer and the Mercer National Survey of Employer-Sponsored Health Plans
Survey methodology
The Mercer National Survey of Employer-Sponsored Health Plans is conducted using a national probability sample of public and private employers with at least 10 employees; 2,569 employers completed the survey in 2014. The survey was conducted during the late summer, when most employers have a good fix on their costs for the current year. Results represent about 600,000 employers and nearly 100 million full- and part-time employees. The error range is +/–3%.
The full report on the Mercer survey, including a separate appendix of tables of responses broken out by employer size, region and industry, will be published in April 2015. For more information, visit www.mercer.com/ushealthplansurvey.
SOURCE: MERCER’S NATIONAL SURVEY OF EMPLOYER-SPONSORED HEALTH PLANS
About Mercer and the Mercer National Survey of Employer-Sponsored Health Plans
About Mercer
Mercer is a global leader in talent, health, retirement and investments. Mercer helps clients around the world advance the health, wealth and performance of their most vital asset – their people. Mercer’s 20,000 employees are based in more than 43 countries and the firm operates in over 130 countries. Mercer is a wholly owned subsidiary of Marsh & McLennan Companies(NYSE: MMC), a global team of professional services companies offering clients advice and solutions in the areas of risk, strategy and human capital. With 55,000 employees worldwide and annual revenue exceeding $12 billion, Marsh & McLennan Companies is also the parent company of Marsh, a global leader in insurance broking and risk management; Guy Carpenter, a global leader in providing risk and reinsurance intermediary services; and Oliver Wyman, a global leader in management consulting. For more information, visit www.mercer.com. Follow Mercer on Twitter @MercerInsights.
SOURCE: MERCER’S NATIONAL SURVEY OF EMPLOYER-SPONSORED HEALTH PLANS