Another Broker Perspective on 2016 Employer Plans

Broker Arthur J. Gallagher surveyed 3031 companies on their health care plans looking forward to 2016.  45% of respondents had 100 or fewer employees, 12% had more than 1000, 62% were for-profit, and the leading industries represented were manufacturing, education, health care and government.  (AJ Gallagher Survey)   Total annual per employee benefit costs were between $5,000 and $10,000 for 43% of the firms, but 20% reported per employee costs of more than $15,000.  The distribution of the most recent premium increase was 10% seeing a decrease and 16% experiencing a 12% or greater rise, with 60% having an increase over 4%.  97% of respondents said they intend to keep offering health coverage.

The primary tactics described for cost control were cost-shifting to enrollees by 67% and changing their plan by 49%.  Note that neither of these is actually related to controlling either health care prices or utilization.  Relatively proven cost control efforts are seldom used–35% are using a high deductible plan with an HSA, but only 15% mandate generic drug use, 12% mandate use of a specific specialty pharmacy, 11% use a reduced or narrow provider network and 2% use a narrow pharmacy network.  The respondents did indicate some greater consideration of using these tactics in the next three years–35% considering a funding change, mostly to self-funded, 13% using a narrow network and 22% mandating generic drug use.

Committment to wellness efforts is strong.  40% of all firms offer some wellness program and 70% of companies with 1000 or more employees do.  The most common components are education, health risk assessments, bioscreening, flu shots, and smoking cessation.  The top challenge to successful wellness efforts is participation, cited by 70% of respondents, and employers seek to influence that by use of incentives, with cash used by 63% and premium differentials by 39%.  The survey paints an interesting picture of continuing health benefit cost growth concern, but lagging use of techniques that might actually more successfully rein in those increases.