Benefits consultant and broker WillisTowerWatson gives us another look at supposed best practices in employment-based insurance. (WTW REPORT) The report focuses on employers of 1000 or more workers. These large employers expect medical trend to rise at about 5% next year, but that is after benefit changes bring it down about a percent. These rising medical costs continue to be the top benefits issue for large employers. And more specifically, 87% say that drug costs, particularly for specialty medications, is their number one priority for the next three years. At the responding employers workers pay about 23% of the premium. Employers claim to be sensitive to the issues this causes lower-paid workers but I am dubious. Only 37% currently modify contributions for low wage workers. And they continue to make it harder to maintain family coverage, adding surcharges and limiting participation. WTW calls this a best practice. How family-friendly of them.
The subset of 41 companies that Willis calls best performers have significantly lower medical spending. It is unclear how much of this though, is due to work force composition. These firms have more engaged employees and are more aggressive in a variety of cost control efforts. They tend to use high deductible plans more and to be more likely to make some contribution to an HSA or similar account, although the amount contributed is seldom close to the deductible. Defined contribution plans are also gaining traction and they similarly are most painful for lower-income workers. Other trends include more use of center of excellence and other network narrowing strategies. Telemedicine and alternative sites like retail and onsite health centers are being used more as well. Notwithstanding uncertain return on investment, wellness programs are heavily relied on for engagement and avoidance of chronic disease. Overall, same old same old–rapidly rising costs and more pain for employees than the companies they work for.