Employers preparing for big health plan changes: Study

Employers across the U.S. are getting serious about changing their health plans and making employees more accountable for their medical choices, new research says.
The main driver of this bolder approach, of course, is costs. According to the Towers Watson/National Business Group on Health Employer Survey on Purchasing Value in Health Care, the total anticipated annual costs per active employee are expected to reach $11,176 (up 7.6% from $10,387 in 2010), and the average employee’s share of costs in 2011 is expected to rise 11.8%, to $2,660.
Account-based health plans (ABHPs) — health savings accounts (HSAs) and health reimbursement arrangements (HRAs) are booming, the report said.
In 2002, just 2% of all employers offered ABHPs, but by 2011, that number has exploded to 53%. By 2012, another 13% of all respondents plan to add an ABHP.
New emphasis on accountability
Other plan changes being mulled by employers:

  • Dependent coverage subsidies: 68% are moving to increase contributions for dependents, with 19% targeting per-dependent contributions, and 35% using or planning to implement spousal waivers or surcharges.
  • Retiree medical coverage: 26% of employers plan to cease employer sponsorship; 25% plan to convert a current subsidy to a retiree health account, and 23% plan to eliminate employer-managed drug coverage for post-65 retirees and rely on Medicare Part D plans.
  • Incentives for high-value providers: 28% of employers plan to differentiate cost sharing for high-performance networks or centers of excellence in 2012, and 21% plan to adopt value-based designs over the next year. In addition, 18% plan to offer incentives or penalties to providers for coordination of care, use of emerging technologies or use of evidence-based treatments.
  • Accountability for engagement: A third of employers plan to reward or penalize their employees based on biometric outcomes (for weight and cholesterol), compared with just 7% in 2011 and 6% in 2010. Social media is one of the emerging creative strategies employers (9%) are using to improve employee health and well-being.

The survey also revealed that employers believe the opening of insurance exchanges in 2014 will have some impact on their active (70%) and retiree (78%) medical programs.
In addition, more than a quarter of employers (27%) believe the opening of the exchanges will have an extensive impact on their retiree plans.
The implementation of the excise tax is expected to have an impact on both active (81%) and retiree (66%) medical programs as well, with 24% and 20% of employers anticipating an extensive impact on their active and retiree programs, respectively.