TowersWatson Employer Survey

TowersWatson surveyed 379 mid to large-sized employers about their current concerns and intentions regarding health benefits.   (TW Survey)   In terms of cost, the companies are expecting about a 4% increase for 2015, after benefit design changes, which is shorthand for more cost-sharing for workers.  Without the benefit changes, the increase would have been 5.2%.  Almost 90% of these companies say health benefits will be an important part of the total compensations package they offer employees, although the percent drops when asked about 2016 and beyond.  About two-thirds of respondents think the reform has increased and will continue to increase costs, with much of the burden falling on workers.  About half of the firms said they would have to pay the excise tax on rich plans coming in 2018 and making changes to avoid that is a priority, with a majority of companies saying it is their biggest concern in regard to health coverage.

Almost none of these companies intend to stop providing health benefits, partly because they have little confidence in the public exchanges.   Employers are slowly warming to private exchanges; while many feel they are not a good solution today, there is a perception that they will improve in the future.  Companies are also continuing to invest in technology and services aimed at improving patient engagement in health care.  This is reflected in high growth of wellness programs and use of incentives related to wellness activities and biometrics.  And half say a high-deductible plan coupled with a savings account will be there only plan option by 2017, putting more pressure on employees to become better health consumers.  Defined contribution approaches are showing stealth growth, with as many as a third of employers considering this option for 2016 or 2017.   Other features drawing employer attention include value-based designs, high-performing provider networks and specialty pharmacy utilization controls.