Another Survey of Employer Health Plans

By November 10, 2017 Commentary

United Benefit Advisors helps employers with health plan design and execution and has conducted an annual survey since 2005.   (UBA Survey)   The firm tends to help many smaller and medium-sized companies, as well as large ones, so the survey gives a good picture of trends at all sizes of employers.  About 11,200 employers participated in the survey.  About 55% of these firms over only one health plan choice to their workers, 28% offer two and 17% offer three or more plan options.  The average cost per employee was $9,934, a slight increase from 2016, but employees share of the costs rose 5% while employers saw less than a 1% rise, as costs continue to be shifted with premium contributions and cost-sharing.  The cheapest from of coverage was HMO, followed by high-deductible plans.  The lowest costs per employee are in the agriculture, retail, construction and hospitality sectors; probably driven by plan design factors.  The highest costs per employee are in the government, education and utility industry sectors, again likely driven by richer benefit designs in those sectors.  Premium increases averaged 6.6% for all plans up from 5.6% in 2016.  Across all plans, employers were covering 69% of the single premium and only 53% of family premium.  HMO enrollment is generally dropping, while high-deductible plans are gaining share.  There is geographic and industry variation in the types of plans offered.

According to this survey, 44% of employees elect to have dependent coverage.  24% of firms offer a comprehensive wellness program, others offer slimmed down ones.  The most common components are health risk assessments, biometric screenings, coaching and health education classes.  Most firms offering wellness benefits offer incentives for participation.  3.5% of employees offer a bonus to employees to opt-out of coverage, but the practice is under regulatory scrutiny.  Self-funding continues to grow, particularly among companies with 25 to 49 workers, where self-insurance rose 48%.  Another notable trend is increasing the number of tiers for prescription drug coverage, in some cases up to six, with three of the tiers used for specialty drugs, and using coinsurance instead of copays for covered drugs.  But this survey, like others, shows that the trend having the most interest to, and impact on, consumers is the increase in cost-sharing, with rises in deductibles, copays, coinsurance and out-of-pocket maximums.  HSAs can help offset some this increased cost-sharing, but a minority of 39% of companies offer this option and many employees don’t participate even when offered.

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