How Does Your Health Benefit Plan Stack Up?

Saturday, November 16, 2019

Designing the optimal benefit plans for employees is a goal of most employers. Data analytics provides a huge assist in doing that. It is also nice to see where your plan designs fall when looking at other employers around the country. I’m using charts from the 2017 Kaiser Family Foundation (KFF) employer health benefits survey to help illustrate certain points and show if you’re ahead of the curve, part of the pack, or behind (hopefully not) on benefit design and strategies.

The following chart illustrates the shift over the years to higher deductibles, painting a picture of why employees should have a vested interest in controlling their health and the dollars they spend on it. This chart also shows that the last couple of years have not moved as much as previous years. Employers are looking for alternative ways to intelligently control costs, like through data analytics. Brokers and consultants need to be more creative and provide data-driven decision-making recommendations to employers. Shifting costs to the employees is not the answer any longer.

Brokers and consultants need to be more creative and provide data-driven decision-making recommendations to employers. Shifting costs to the employees is not the answer any longer.

Click To Tweet

The chart below illustrates the change in employers cost versus employee costs over the last 19 years, as evidence by pushing costs to employees.

Employer change
1999-2007
102%Employer change
2007-2017
45%Employee change
1999-2007
118%Employee change
2007-2017
75%

What I believe to be going on here is the large firm percentages are lower because those employees usually have the option to choose between a higher deductible plan and a richer plan. As I discussed in an earlier blog, people do not make optimal decisions. In this instance, people are choosing to over-insure, even though usually the plans are financially equivalent, or financially it favors the high deductible plan, as they are priced to entice employees to choose that plan.

Having access to your data through a data analytics partner allows you to look at your past claims and help predict future claims to determine what stop loss thresholds and deductibles make sense for you. The KFF chart below shows how employers are utilizing stop loss.

Stop Loss Overview% of Covered Workers Enrolled in a Self-Funded Plan that Purchased Stop Loss Insurance% of Covered Workers Enrolled in a Self-Funded Plan that Purchased Stop Loss Insurance that Included a Limit on per Employee SpendingAverage per Employee Claims Costs at which Stop Loss Insurance Pays Benefits (Attachment Point)Small Firms

(3-99 workers)

60%93%$  80,000*Large Firms

(200+ workers)

58%88%$ 340,000*Self-Funded Firms59%88%$ 320,000Note:A limit on per employee spending includes stop loss insurance plans that limit a firm’s per employee spending, as well as plans that limit both a firm’s overall spending and per employee spending. Attachment points refer to the dollar amount at which stop loss coverage begins to pay for most of all of a claim.

Understanding your employee population and effective communication goes a long way to driving a successful wellness program. Here are some stats around wellness programs:

  • Among firms offering health benefits, 38% of small firms and 62% of large firms provide workers the opportunity to complete a health risk assessment (HRA).
  • In firms providing workers the opportunity to complete an HRA, 42% of covered workers complete an assessment, similar to the percentage in 2016.
  • There is considerable variation across firms in the percentage of workers who complete the HRA:
  • 19% of large firms providing workers the opportunity to complete an HRA assessment report that more than 75% of their workers complete the assessment.
  • 45% report that no more than 25% of workers complete the assessment.
  • Among large firms that offer HRAs, 52% offer workers an incentive to complete the assessment.
  • Among large firms offering incentives for workers to complete HRAs:
  • 46% lower premium contributions or reduce cost sharing
  • 40% offer cash, HSA, or HRA contributions, or allow workers to avoid payroll deductions.

Understanding your employee population and effective communication goes a long way to driving a successful wellness program.

Click To Tweet

Among companies offering benefits, the table below shows the percentage of companies offering specific wellness programs to their employees. The chart shows the types of incentives offered.

Wellness ProgramCompanies with 200+ EmployeesHelp Workers Stop Smoking72%Help Workers Lose Weight67%Other Lifestyle or Behavioral Coaching72%At Least One of the Programs85%

The table below shows the percentage of companies who offer disease management as part of their benefits package, followed by a chart of those offering incentives to participate.

Among Companies Offering Health Benefits, Percentage of Companies that Offer Disease ManagementBy SizeEmployers Offering Disease ManagementSmall Employers (3-199 Workers)40%Large Employers (200+ Workers)68%By IndustryAgriculture/Mining/Construction28%Manufacturing60%Transportation/Communications/Utilities14%Wholesale15%Retail32%Finance35%Service44%State/Local Government36%Health Care63%

Among Larger Employers Offering Disease Management Programs, Percentage of Employers Offering Incentives to Workers Who Participate in or Complete Programs

The following charts provide a snapshot of firms providing telemedicine as a benefit program offering.

The following chart shows other strategies employers use to control benefit program costs.

Again, these charts and figures are helpful to see where your company or clients stand compared to the rest of the country in benefits offered and details of benefits offered, but the use of data analytics is important to offer the right program or benefit, designed the most effective way.

More from the Innovu Blog

Learn more about how Innovu can help you.
Request a demo today.

Your clients expect you to control benefit costs and improve the health of their employees. Do both more efficiently & effectively.

Address

stay in touch

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form