How Does Your Benefits Plan Stack Up?

The Kaiser Family Foundation and the Health Research & Educational Trust (HRET) released their 2017 Employer Health Benefits Survey in September. The report sheds light on the employer-sponsored insurance landscape, which covers around 151 million workers.

Not surprisingly, costs continue to rise for both employers and employees, although the increases are in the single digits again this year.

Employee contributions

Workers covered under employer plans are paying for a larger percentage of the healthcare services they receive, in the form of:

  • Deductibles
  • Premiums
  • Copayments
  • Hospital admissions
  • ER visits
  • Outpatient surgeries.

Deductibles

With the widespread adoption of high deductible health plans, employees are spending more of their paychecks to cover healthcare services.

  • In 2012, 34% of employees with single coverage had a deductible higher than $1000.
  • In 2017, more than 51% of those with single coverage have a deductible of $1000 or higher.

Premiums

Employees are also paying more out-of-pocket to cover plan premiums. On average:

  • Single and family coverage have both increased 19% since 2012.
  • Those with single coverage are contributing 18% of the premium costs.
  • Employees with family coverage pay 31% of their premium costs.

Premiums vary greatly

Healthcare costs and employer benefits strategies impact the cost of premiums regionally, by industry, and by company size. For example:

  • Covered workers in small companies pay 39% for family coverage, while those in larger firms contribute only 28%.
  • 17% of covered workers pay at least $22,517 in premiums for family coverage, which is 120% or more than the average family premium.
  • 21% of covered workers pay at least $15,011 in premiums for family coverage, which is less than 80% of the average family premium.

How does your plan compare?

You know what you and your employees pay for healthcare, so how does it compare to the rest of the country? The Kaiser/HRET survey shows that for 2017, the average annual premium for:

  • Single coverage is $6,690
  • Family coverage is $18,764.

This lets you see if your healthcare benefits are in line with the national averages of the employers responding to the survey. It even provides a snapshot of the costs in the Northeast, South, Midwest, and West.

But don’t get too excited. While this information helps put your healthcare benefits program in context, it doesn’t really give you the insight you need.

Why not?

Well to start, the 4 regions the report is broken in to cover a large area and millions of workers in urban and rural locations.

To get a true comparison, you need to have more focused data, specific to your localized region. You want to benchmark your company against those you compete with for talent and who face the same health issues that you do. To get that type of insight, you need a data analytics vendor who provides regional benchmarking.

The best data analytics vendors integrate data across all your benefits programs to give you a 360-degree view of your population. But even if you only integrate medical and Rx, you’ll get a much better understanding what’s happening within your population. The vendor should also be able to benchmark your program to others in your region.

Discover how your benefits costs are impacting your overall business

  • Recruitment and retention. If your company’s benefits aren’t competitive, you’re losing talent.
  • Morale. If your workforce is unhappy with your benefits package, they aren’t as engaged, which could also impact productivity and absenteeism.
  • Healthcare utilization and costs. If employees can’t afford medical services because of high out-of-pocket costs, they could delay treatment until their conditions require more expensive services like ER visits, hospitalizations, or surgeries.
  • Poor health outcomes. If workers can’t afford medications and services to control their chronic conditions, your medical costs could actually be higher than they would be if workers’ conditions were managed effectively. And sicker workers impact productivity, absenteeism, and presenteeism, which are a direct hit to your bottom line.
  • Partnering with a data analytics vendor who offers more than an out-of-the box solution and that provides added analysis, not just static reports, will give you the insight you need to improve health and control costs. Choose wisely to get the most out of your vendor.

    Sashi Segu

    Sashi Segu

    Sashi Segu, Counsel, has participated in cases and provided legal expertise on HIPAA, ERISA, privacy, compliance, and other healthcare-related fields. Sashi left Innovu in March 2019 to pursue other interests.

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