Issue link: https://www.e-digitaleditions.com/i/234597
Upside NEWS FROM THE WORLD OF WORK The Benefits/Cost Pendulum Although health benefit cost growth continued slowly in 2013, employers should not let their guard down yet as there is an anticipated cost increase for 2014. According to the National Survey of EmployerSponsored Health Plans, conducted annually by Mercer, growth in the average total health benefit cost per employee slowed from 4.1 percent in 2012 to just 2.1 percent in 2013. Cost averaged $10,779 per employee in 2013; this includes employer and employee contributions for medical, dental, and other health coverage. The slow cost growth of 2013 is reflective of action that employers took to prevent high rates. But employers expect that the rate of growth in the per-employee cost of coverage will escalate next year to 5.2 percent if they do make changes to attempt cost reduction. If they make no changes to the current plans, employers estimate that cost would rise by an average of 8 percent. While cost growth has slowed among employers of all sizes, it was lowest for small employers in 2013. Among those with between 10 and 499 employees, average cost rose by only about 1 percent, while among very large employers—those with 5,000 or more employees—it rose 3.7 percent. Small employers shifted cost to employees in 2013 with higher deductibles, which helped to hold down cost: The average PPO in-network individual deductible jumped 15 percent in 2013, to reach $1,663. Large employers focused on building enrollment in lowcost consumer-directed health plans and improving employee health management programs. Many employers anticipate an increase in spending in 2014, reflective of higher enrollment. The ACA mandate that requires all individuals to obtain coverage or face a tax penalty goes into effect in 2014. Currently 22 percent of an employer's eligible employees, on average, waive coverage for themselves, either because they are covered under another plan or because they choose to go without. Some large employers say they will take steps to control growth in enrollment, most commonly by increasing the employee contribution for dependent coverage (18 percent) or employee-only coverage (10 percent). Some already impose a surcharge on premium contributions for spouses who have other coverage available (9 percent of large employers) or even make them ineligible for coverage (7 percent of large employers); it seems likely that these provisions will become more common next year. [8] HRO TODAY MAGAZINE | DECEMBER 2013 Enrollment in consumer-directed health plans rose from 16 percent of covered employees in 2012 to 18 percent in 2013, which is the same portion that enrolled in HMOs. CDHPs are an important option for employers looking for a low-cost plan to make extending coverage to additional employees more affordable. The average cost of coverage in a CDHP paired with a tax-advantaged health savings account is 17 percent less than coverage in a PPO and 20 percent less than in an HMO: $8,482 per employee, compared to $10,196 for PPOs, and $10,612 for HMOs. Wellness programs are one of employer's top strategies for controlling health spending, as nine out of 10 of these employers say that their programs have had a positive impact on medical plan trend. Healthy Savings Employees who contribute to health savings accounts (HSAs) generally become more engaged in managing their health after enrolling, according to a survey conducted by Buck Consultants, A Xerox Company. For example, 51 percent of respondents set aside more money for potential medical costs than before they had HSAs, 29 percent have more discussions with their doctors about the cost of care, and13 percent more actively manage their chronic disease. The report BenefitWallet: 2013 Member Survey Report polled more than 23,000 members who own HSAs. The report found that the vast majority (90 percent) of HSA members obtain medical coverage through their employer. More employers are contributing to HSAs (75 percent) than not (25 percent). HSA members are responsible for a greater portion of their health costs, so they expect tools to help them make informed, rational decisions. When ranking important HSA product features, 44 percent of respondents ranked the ability to view claims on the HSA site as most important. They ranked paying medical claims on the HSA member portal second at 35 percent. The survey also reports on respondents' perceptions regarding the impact of the ACA: Choosing a health insurance exchange plan. Forty-two percent of respondents indicate they remain undecided as to whether they will