Company surveys can be useful to understand what will happen to employment-based health benefits, which still provide coverage for the largest number of Americans. The latest survey comes from Towers Watson, covering 368 firms with over 6 million employees. (TW Survey) The respondents had an average cost of $11,202 per employee for coverage. They expect health care costs to grow about 5.9% in 2012 versus 7.6% in 2011. Two-thirds are increasing employee contributions for 2012 and 20% say the increase will be five or more percent. Similarly, 73% are planning to raise dependent contributions. Many are considering even less subsidization of dependents in future years.
In regard to design changes, while use of value-based features is low currently, a large number are considering these features for 2013 or 2014. A larger minority are using and plan to use differentiated cost-sharing based on seeing a high-performance provider, and many companies have or plan to have an onsite health center. In regard to drugs, many employers are creating stronger incentives to not use brand name drugs when a generic is available and intend to toughen their negotiations with PBMs. While growth in account-based consumer-directed plans had plateaued, a significant uptick is expected in the next couple of years, and a higher number of employers are intending to make such a plan the only option, largely because of reduced per person health costs in such plans.
Over half use incentives for health assessments and wellness activities, with more planning to do so, and while only 8% currently reward or penalize employees based on biometric screening results, an enormous 57% more are planning to do so in the next two years. Most employers think the reform act will be implemented as intended, but don’t believe the exchanges will turn out to be a viable coverage option. Most employers are intending to eliminate retiree coverage for both over and under 65 year olds. While most employers say they don’t intend to drop coverage, a very large majority says they will watch what other firms do and follow the lead of those companies. This implies that if a few employers decide to drop coverage, there may be a stampede for the exits.