New research on views of 2,000 employees on their perceptions and preferences around health and wellness benefits

Americans highly value and depend on their employee benefits — health insurance in particular — but lack the savvy and initiative to ask doctors, “How much will it cost?” That question could mean the difference in thousands of dollars for consumers, and millions for U.S. companies. 

These are among the findings from a recent national survey of more than 2,000 employees, led by Benz Communications, a marketing firm that specializes in employee benefits, and Quantum Workplace, a leading technology firm focused on employee satisfaction and engagement surveys.

The goal was to get clear, actionable data for U.S. companies on how to improve their efforts around managing and communicating health and wellness benefits. Top level findings can be found in the infographic below. A deeper dive into the data, including four topical fact sheets, can be found here.

To view full size click here.

Most Employers Reject Private Exchanges According to NBCH and Benz Communications Survey

NBCH teamed with Benz Communications this summer to conduct the 2014 Inside Benefits Communication survey to learn how companies are strategizing and implementing benefits communications through the lens of the Affordable Care Act, compliance mandates and industry trends.

The ACA excerpts of the survey are being released today in the infographic below, and in the accompanying news release and executive summary report.

More than 300 employers across the country participated, spanning a wide cross-section of industries, employer sizes and geographic locations.

The full survey report, including detailed analysis of benefits communication investments, will be released at NBCH's annual conference on November 11.

NBCH and Benz Communications Launch Employer Benefits Communications Survey

NBCH is teaming with Benz Communications to bring you the 2014 Inside Benefits Communication Survey. This survey of benefits professionals will help us learn how companies are strategizing and implementing benefits communication through the lens of the Affordable Care Act, compliance mandates and industry trends.

The first IBC survey conducted by Benz in 2012 reached nearly 300 employee benefits professionals and provided invaluable information about the future and challenges of the industry. Some of the key findings revealed that engaging employees year round is among employers’ top communications challenges; with nearly half (45%) saying they are dissatisfied with their current communications strategies. In addition, 41% said they aren’t sure if their benefits communication efforts are helping them meet their goals.

The 2014 survey is targeted at human resources and employee benefits managers/directors and takes approximately 10 minutes to complete. To make the survey a success, we need to hear from as many benefits professionals as possible.

One of every 50 survey participants will get a free, full registration to either the 2014 NBCH 19th Annual Conference (November 10–12 in Washington) or the 2015 Health & Benefits Leadership Conference (April 8–10 in Las Vegas) led by Human Resource Executive.

Plus, NBCH members may receive exclusive breakout data from the survey that pertains to respondents from their particular region. If 15 members from a regional coalition participate, all respondents from that region will receive this special breakout report.

Interested? Take the survey today!

Final Mental Health Parity Rules Published

The Obama administration has released final rules for the 2008 Mental Health Parity and Addiction Equity Act. The law requires most health plans to provide more generous mental health coverage, comparable what they cover for physical illnesses. Previously, insurers often charged higher co-pays or set stricter limits on mental health services.

The act doesn’t require employers to provide mental health coverage, but those that do must treat mental and physical health care equitably. Plans can’t charge higher co-pays, deductibles or out-of-pocket expenses for mental health services, nor can they apply separate treatment limitations. They must also offer equal out-of-network benefits. The administration released interim rules in January 2010, but the final rules had been delayed.

IRS Eases Restrictions on Flexible Spending Accounts

IRS has announced that employers can allow FSA participants to carry up to $500 of their  balances into the next year — and it can be effective in plan year 2013. Up until now, any money remaining in the account would have been forfeited. The added FSA flexibility is a response to comments from the public about the challenge of accurately predicting medical expenses, especially for certain income levels, and the unnecessary spending prompted by the use-or-lose rule.

Under current law, employers may allow a grace period of up to two and a half months, during which employees can spend funds remaining from the previous plan year. The grace period option will remain in place, but FSAs cannot have both the grace period and carry-over options. Under the Affordable Care Act, health care FSAs are capped at $2,500. Previously, employers often set it at $5,000, but there was no mandated cap.

Consensus Statement Offers Guidance on the Use of Biometric Screenings as a Workplace Wellness Tool

Three national health organizations have published new guidance intended to help employers create more successful programs for gathering health-screening information from employees. Known as “biometric screenings,” the gathering of such information — ranging from height and weight to blood pressure and cholesterol levels — can play a key role in an employer’s workplace wellness program.

The Health Enhancement Research Organization (HERO), the American College of Occupational and Environmental Medicine (ACOEM), and the Care Continuum Alliance (CCA) collaborated on a consensus statement titled “Biometric Screening for Employers,” which was published in the October issue of the Journal of Occupational and Environmental Medicine (JOEM), the official publication of ACOEM.

With the growth in the popularity of employer wellness programs, the inclusion of biometric screenings is on the rise. During a biometric screening, factors such as blood pressure, weight, and cholesterol are taken at the worksite and used as a part of a workplace health assessment to benchmark and evaluate changes in employee health status over time. These measurements are often used as an essential component in health management and wellness programs for employees.

But many variables must be taken into account in order for biometric screening programs to succeed, including data collection methods, selection of appropriate populations for screening, operational issues, privacy considerations, budget limitations and others. “Biometric Screening for Employers” offers detailed suggestions on all of these and other variables, organized into four major categories to assist employers when considering biometric screening as part of an overall employee health management approach.

NIHCM Data Brief on Trends in Employer-Sponsored Insurance

Recent accounts of employers dropping health coverage, restricting eligibility for spouses, turning to plans with narrower networks and greater cost sharing, and restructuring workforces are often framed as side effects of the ACA. But many of these cost-cutting trends began long before health reform. This data brief from the National Institute of Health Care Management offers a comprehensive look at how employer-sponsored insurance has been changing and how provisions of the ACA and other dynamics might affect this market. Topics include:

• the decline in rates of employers offering health insurance, particularly for smaller firms with lower-wage workers
• projections of the ACA’s impact on employer-sponsored coverage and part-time workers
• the ongoing movement to greater employee cost sharing and shift into high deductible plans
• growing employer reliance on workforce wellness programs and interest in defined contributions and private exchanges
• the emerging focus on promoting value through reference pricing, high performance networks and transparency
• the trend toward self-insurance among smaller firms

Aon Hewitt Survey: More Employers Will Offer High-Deductible Health Plans

The Washington Post reports on an Aon Hewitt survey that indicates high-deductible (or consumer-directed) health plans could become the most common form of coverage offered by companies with 500 or more workers in the next three to five years, as companies continue trying to cut health-care costs. Aon Hewitt said its annual survey of more than 800 large and mid-size U.S. employers found that 56 percent are offering CDHPs as a plan choice and another 30 percent are considering offering one in the next three to five years.

Employers are considering these plans because they make workers aware of how much their care costs, which could help slow growth in health care expenses for companies. Patients tend to think more about what they need and how to get a better deal for it. That means the employee may fill a prescription with a generic drug instead of the pricier brand-name medicine. They also may look for a better deal on an MRI exam instead of heading to the nearest hospital.

Health care expenses and administrative costs for the coverage grew about 4 percent last year for employers with CDHP plans, according to Aon Hewitt. That compares with growth of 6 percent and 7 percent for more traditional health insurance plans with lower deductibles: HMOs and PPOs.

Employers Preparing Now for Cadillac Tax in 2018

The Commonwealth Fund reports on recent trends among employers to start trimming back benefits now in preparation for the Cadillac Tax hitting "high cost plans" in 2018. As employees at many private companies prepare for the open enrollment season, some will find out soon about decisions their employers have made about benefits in order to escape a tax on expensive health care coverage that hits in 2018.

The tax imposes a 40 percent excise tax beginning in 2018 on the cost of coverage for health plans that goes above limits of $10,200 for individual coverage and $27,500 for self and spouse or family coverage that year.  Nearly a third of all big employers say they are taking steps in 2014 to avoid the tax in 2018, according to a survey released earlier this week by the Mercer consulting firm.

Mercer estimates that about 40 percent of companies would have to pay the tax on at least one plan if they did not change the current benefit design. Mercer's figures are the partial findings of a survey of 2,800 large employers across the nation, with about 2,000 responses so far. The full survey will be released later.

NBCH member coalition, The Alliance in Madison, Wisconsin, has developed a Cadillac tax estimate calculator for employers.  You can find the calculator on the newly-launched NBCH ACA Calculators and Resources webpage.

Policy Brief on ACA's Cadillac Tax

A new Health Policy Brief from Health Affairs and the Robert Wood Johnson Foundation explains one of the most controversial provisions of the Affordable Care Act: the so-called Cadillac tax on generous employer-sponsored health insurance plans. Beginning in 2018 a 40 percent excise tax will be assessed on the cost of any of these plans exceeding $10,200 for individual coverage and $27,500 for family coverage. Employers, who would be responsible for paying the tax, are preparing for it by scaling back health benefit offerings or increasing workers' deductibles or co-pays to avoid paying the tax. Although critics of the tax say it unfairly reduces health benefits for subscribers to these plans, particularly those with expensive chronic illnesses, proponents maintain that when consumers pay a larger share of the costs, they will be less likely to overuse care.

Since the excise tax will not take effect until 2018, it will be some time before policy makers determine whether it will work as intended to achieve its dual goals of both raising revenue to fund health coverage expansion nationwide and lowering health care costs. Still, lawmakers from both parties and many policy makers agree that the excise tax should make employers and employees pay much closer attention to their medical spending over the long run.

Large Employers Make Big Changes to Retiree Health Care

Bloomberg reports that GE and IBM have both decided to stop providing traditional retiree health care benefits, and instead shift retirees into private insurance exchanges where they purchase their own insurance plans with a defined contribution. While retiree health benefits have been shrinking for years, the newest cutbacks may quickly become the norm. About 44 percent of companies plan to stop administering health plans for their former workers over the next two years, a survey last month by consultant Towers Watson found. Retirees are concerned their costs may rise, while analysts predict benefits will decline in some cases. Companies argue that many retirees can find more choice and a better deal on the exchanges. Instead of taking a one-size-fits-all company plan, a healthier retiree might find a less expensive policy with a higher deductible, or one that saved money by favoring generic drugs.

UPS Removes Some Employees' Spouses From Health Plan

Kaiser Health News, in partnership with USA Today, reports hat Fortune 100 company UPS will be excluding spouses of certain employees from the company's health plan starting in 2014. Rising medical costs, “combined with the costs associated with the Affordable Care Act, have made it increasingly difficult to continue providing the same level of health care benefits to our employees at an affordable cost,” UPS said in a memo to employees. The company told white-collar workers two months ago that 15,000 working spouses eligible for coverage at their own employers would be excluded from the UPS plan in 2014. The firm expects the move, which applies to non-union U.S. workers only, to save about $60 million a year.

Many analysts downplay the Affordable Care Act’s effect on companies such as UPS, noting that the move is part of a long-term trend of shrinking corporate medical benefits. But the shipping giant repeatedly cites the Act to explain the decision, adding fuel to the debate over whether the law erodes traditional employer coverage. UPS becomes one of the highest-profile employers yet to bar working spouses from the company plan. Many firms already require employees to pay a surcharge for working-spouse medical coverage, but some are taking the next step by declining to include them at all. The health law requires large employers to cover employees and dependent children but not spouses or domestic partners.

Study: Enrollment in Private Exchanges Likely to Grow

Enrollment in private health insurance exchanges is likely to match enrollment in public exchanges by 2017 and may exceed it in 2018, an Accenture study found. According to the Accenture analysis, private exchange participation will approach public exchange enrollment levels as soon as 2017, and surpass them soon after. The result: In 2017, approximately 18% of the American public will purchase insurance through exchanges, radically transforming the health insurance landscape. Many employers favor private exchanges because they offer defined contribution plans and opportunities to customize supplemental offerings such as dental, life and disability products.

While public exchanges will be government operated, private exchanges are being developed by consulting firms, such as Aon Hewitt, Mercer, and Towers Watson, as well as retailers, such Walgreens, and even insurance brokers.  Health insurers are not only joining private exchanges, some like Aetna and Cigna have plans to develop proprietary exchanges of their own. 

Participating in a private HIX provides something of a win-win for insurers and employers. Both have been looking for ways to extract themselves from the annual uncertainty of renewing healthcare benefit contracts. The advantage of defined contribution for employers is that it takes the guesswork out of budgeting for healthcare costs from year-to-year, and benefits employees by providing decision support technology that enables them to choose benefits that make sense for their circumstances.

Kaiser Family Foundation/HRET Annual Employer Health Benefits Survey

Annual premiums for employer-sponsored family health coverage reached $16,351 this year, up 4 percent from last year, with workers on average paying $4,565 toward the cost of their coverage, according to the Kaiser Family Foundation/Health Research & Educational Trust (HRET) 2013 Employer Health Benefits Survey released today. During the same period, workers' wages and general inflation were up 1.8 percent and 1.1 percent respectively.

This year's rise in premiums remains moderate by historical standards. Since 2003, premiums have increased 80 percent, nearly three times as fast as wages (31 percent) and inflation (27 percent). The survey of over 2,000 large and small employers shows that firms with many lower-wage workers (at least 35 percent earning $23,000 or less annually) require workers to pay $1,363 more on average toward family premiums than workers at firms with fewer lower-wage workers ($5,818 vs. $4,455 annually). The lower-wage firms on average offer less costly coverage too, creating a large disparity in the share of the premium that their workers pay (39 percent vs. 29 percent).

Employee wellness programs are a popular strategy for employers trying to control costs. Nearly all large employers (at least 200 workers) offer at least one wellness program, which can take many forms and target a wide range of conditions. More than a third (36 percent) of large employers who offer wellness programs offer some kind of financial incentive for workers to participate, such as lower premiums or a lower deductible, receiving a larger contribution to a tax-preferred savings account, or gift cards, cash or other direct financial incentives.

Employers Are Concerned About Aging Workforce

Employers are concerned about health and wellness issues connected with an aging workforce, but most haven't implemented strategies to manage safety and leave for an older population, according to a joint study released by the Disability Management Employer Coalition and Cornell University.

In the survey of 522 employers, 85% of respondents said they are "very" or "somewhat" concerned about an aging workforce. However, 64% of respondents said they have not designed their absence and disability management programs around those concerns.

The statistics coincide with a workforce that is growing older on average. About 19.5% of the workforce was 55 years old or older in 2010, and such workers are expected to account for about 25% of the workforce by 2020, according the report from DMEC and Cornell.

The study also found that the disability prevalence rate is close to 10% for workers who are 60 years old or older, compared with a rate of less than 5% for workers under 40 years old.

Employers can better manage safety and health concerns for older workers through strategies such as schedule flexibility, wellness programs, ergonomic job accommodations and safety checks to determine whether safety procedures are being followed correctly.

State and Local Governments Burdened by Retiree Health Care Costs

Reuters reports on findings from two Federal Reserve Board of Governors senior economists that U.S. state and local governments have about $1 trillion of unfunded retiree health care liabilities, a shortfall that is expected to pressure budgets in the near future even more than pension costs. "Because retiree health obligations are mostly unfunded, they exert pressure on state and local budgets long before the pension plans do, even though the size of the pension problem is significantly greater in the long run," wrote Byron Lutz and Louise Sheiner in a paper to be published in the next couple of months. Retiree health care benefits have fewer legal protections than pensions, which are often protected by state laws. But these health care benefits are largely unfunded in the United States, with most states and cities paying as they go. Many public employees retire before reaching the age of 65, which leaves municipalities to pay for their coverage until they become eligible for the Medicare.

States and cities have recently been exploring new ways to do value-based purchasing and value-based benefit design to attempt to alleviate some of these burdens. Implementing VBID in a state or local government plan can be especially challenging since, historically, these employers have offered very rich benefits with little or no employee cost sharing. The VBID Center at the University of Michigan earlier this year evaluated efforts by the State of Connecticut to introduce VBID into its health plan. Early indications are that the effort is working - employees are taking more control of their own health, and the State's cost growth is slowing.

New Report: Private Insurance Exchanges on the Rise

Nearly one in five people will purchase health coverage through a privately run insurance exchange within four years, according to new research by Accenture Research, an arm of the global consulting firm, predicted that private exchanges will "upend … purchasing for many of the 170 million people who receive benefits through their employer." In this model, employers purchase coverage through a marketplace, allowing their workers to choose from a range of health plans. It is comparable to the publicly run exchanges soon to launch under healthcare reform.

Private exchanges appeal to employers because they operate on the basis of a defined contribution, allowing firms to better plan for future insurance costs. Accenture cites surveys by benefits consultants Mercer and Aon Hewitt indicating that one quarter of employers are considering switching to a private exchange within five years.

But the firm cautioned that very few consumers understand the new model, which would "shift considerable financial responsibility to employees."

"This creates tremendous opportunity for carriers, brokers and employers to take credit for enhanced experience, yet also creates equally tremendous risk as dissatisfied consumers will blame plan sponsors," the analysis states.

Projected Tax Revenues from "Cadillac Tax" Drop in New CBO Estimate

According to a new Congressional Budget Office report, revenues expected to be generated by the ACA's excise tax on high-cost employer-sponsored plans (the "Cadillac Tax") have dropped from $137 billion to $80 billion. Largely because of this drop-off in projected tax revenues, the estimated cost of implementing the law through 2023 rose by $40 billion to $1.36 trillion, the budget office said.

The law imposes the “Cadillac Tax" starting in 2018. Sixty-one percent of employers with 500 workers or more said in a 2011 survey that they expected to trigger the tax unless they took steps, according to Mercer Inc.

CBO analysts said in a May 14 blog post that the projection changed because of “new data on the health insurance premiums paid by employers. As a result, we now expect fewer employment-based plans to be subject to the excise tax.” Other potential reasons for the decrease include employers pressing hospitals and health systems for better rates, adding wellness programs, and raising deductibles and other cost-sharing on workers. A slowdown in U.S. medical costs overall since the recession that began in 2008 probably also contributed to the CBO’s forecast.

Urban Institute Study on Impacts of Limiting Tax Exclusion for Employer-Sponsored Health Care

Capping the tax exemption for employer-sponsored health coverage would raise hundreds of billions of dollars over the next decade, according to new analysis by the Urban Institute. As the single largest tax expenditure, the employer-sponsored insurance exclusion massively reduces the tax revenues the government collects each year — by a total of $268 billion in 2011. Placing a cap on the exemption that allows the top 25 percent of the most expensive health benefits to be taxed would raise $264 billion for the federal government by 2023.

A cap on the exemption for employer-sponsored health care has started to come up for discussion frequently as Congress looks toward a broad tax reform in 2014. The cap analyzed by the Urban Institute would lead to a tax increase for 16 percent of people who file taxes in 2014 and 20 percent of people who file taxes in 2023.

Survey: Employees Do Not Want More Control over Health Insurance Decisions

Fifty-four percent of U.S. workers prefer not to have more control over health insurance options because making such decisions is daunting, a survey says.  The third annual Aflac WorkForces Report -- an online survey of nearly 1,900 benefits decision-makers and more than 5,200 U.S. workers -- was conducted in January by Research Now and released by Aflac, a provider of supplemental and guaranteed-renewable insurance in the United States.

The survey found 62 percent of workers said medical costs they would be responsible for would increase, but only 23 percent were saving money for potential increases.  Seventy-five percent of workers said they think their employer would educate them about changes to their healthcare coverage as a result of the Affordable Care Act, but only 13 percent of employers said educating employees about healthcare reform was important to their organization.

Fifty-three percent said they feared their employers might not adequately manage their coverage, leaving their families less protected. Eighty-nine percent admitted they chose the same benefits year over year -- and many don't understand the options provided.

Even though educating employees is a low priority, helping workers learn how to manage their health care choices effectively presents an opportunity for employers to demonstrate they care about their employees, and to curb potential absenteeism, low morale, and low productivity.