Kaiser Health Insurance Survey Part III

The last installment of our review of the Kaiser employer health benefits survey covers a variety of topics.  The first is prescription drug coverage which is provided to 98% of employees.  (Kaiser Report II) Almost all workers, 88%, have drug coverage with tiers, and 77% have three or more tiers.  Copayments are more common than coinsurance and the average copay in the first tier is $10, $29 in the second and $49 in the third.  For plans with four tiers, which often is specialty drugs, the copay in that last tier averages $91.  In terms of plan funding, 60% of workers are in a self-funded plan, which is up from less than 50% in 2000.  Workers in large firms are much more likely than those in smaller companies to be in a self-funded plan.

Retiree health benefits continue to be offered by very few firms, down to 26% in 2011 from 66% in 1988.  Once again large firms are much more likely to have such coverage and state and local governments are far more likely to have retiree benefits, but that is likely to change.  According to this survey, wellness benefits may not be as prevalent as is commonly perceived.  Sixty-five percent of firms that offer health benefits offer at least one wellness program and 52% of those firms offer them to dependents as well as the employee.  For 87% of companies, most of the wellness programs come from their health plan.  Only 14% of companies offer incentives in connection with the wellness program.   Forty-six percent of firms offer the wellness programs just because they come with their health plan, 26% do so to improve employee health and reduce absenteeism and 8% to reduce costs.    Among those with wellness programs, 65% think they do improve health and 55% think they reduce health costs.  Not exactly a ringing endorsement.

In regard to reform, 72% of all firms have at least one grandfathered plan and 56% of workers are in such a plan.  For companies that didn’t keep grandfathered status, the primary reasons were the plan wasn’t in effect, cost-sharing changed more than permitted or administrative difficulty.  Many firms had to enroll adult children and a total of 2.3 million adult children are estimated to have been added to coverage.  For employers of more than 5000 workers, the average number added was 492.  That is a not insignificant additional cost.  Many firms also had to change cost-sharing on preventive services.  Finally, employers are most likely, at 26%, to say disease management is effective at controlling costs; 22% say high deductible plans do so, 18% say tighter managed care restrictions will and 14% believe in more employee cost sharing.  Of companies with more than 200 workers, 46% increased premium sharing last year and 22% reduced benefits.