Current State of Health Benefit Strategies

With unemployment being lower and the economy continuing to be strong, employers need to attract and retain employees. The threat of quality employees leaving is higher now, and I am sure there is some pent-up desire to change jobs.

According to the Willis Towers Watson 23rd Annual Best Practices in Health Care Employer Survey, employers have identified priorities that will improve health outcomes and the health experience for employees. (Unless otherwise noted, all stats cited in this blog are from the Willis Towers Watson survey.) Over the next three years, employers’ top priorities include:

  1. Clinical conditions: Improving the health of employees and reducing the costs for key clinical areas
  2. Employee wellbeing: Enhancing employees’ physical, emotional, financial, and social wellbeing
  3. Employee experience: Promoting employee involvement in workplace, technological, and physical environments
  4. Healthy workplace: Creating a workplace environment that encourages healthy living

Clinical Conditions

Employers report that the following clinical conditions are their top concerns:

  1. Metabolic syndrome/diabetes
  2. Musculoskeletal disease
  3. Mental/behavioral health
  4. Cardiovascular disease
  5. Cancer
  6. Maternity/infertility

Well-being

Well-being is a significant focus, concentrating on physical, financial, and mental well-being. Over the next three years, 82% of employers are investing in well-being initiatives.

Top Performers

The survey isolates the best performing companies (48 of them) that have both costs and trends lower than the national average.

  • Best performers are estimated to pay $1,393 PEPY less than the average employer ($11,219 in 2018 compared with the national average of $12,612).
  • For perspective, a best performer with 10,000 employees is saving almost $14 million a year over similar size peers.

Cost Increases

Healthcare costs continue to increase at a lower rate than ten years ago or so, but the increases are still above inflation. So even though the increases aren’t near double digits, they are not palatable.

A Kaiser Family Foundation graphic shows that drug costs really peaked in 2014 and 2015, but have dropped considerably since then.

The large bump in drug costs during 2015 and 2016 was influenced by the Hepatitis C curative drugs as seen below in a graph from Kaiser Family Foundation.

Data analytics is also a best practice, as it is needed to effectively measure any programs or changes that are implemented. Data analytics can also determine the financial impact of making these changes, allowing employers to dip their toe in the water before jumping in.

Brandon Conroy

Brandon Conroy

Brandon Conroy, ASA, FCA, MAAA, is a leader in developing and implementing new tools and strategies that reduce client risk. He’s developed and implemented an interactive healthcare cost projection model, underwriting templates, renewal presentations, IBNR tools, a health plan chooser tool, and financial wellness education models. Brandon left Innovu in February 2019 to pursue other interests.

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