Trends&’Plan’Strategiesfor’2017’&’Beyond ...’Plan’Strategiesfor’2017’&’Beyond ... Stas:cs,’Seasonally’Adjusted’Datafrom’the’CurrentEmploymentStas:cs’Survey,’2011F2016’

Trends & Plan Strategies for 2017 & Beyond

Employee Benefit Coverages

Trends and Plan Strategies

§  Health Plan Benchmarks … Design, Cost Share, Innova:on §  Employers Employees…Actual vs. Presumed Wants

§  Defined Contribu:on … Contribu:ng a Defini:on

Benchmarks… Enter the Survey Data All Are Not Created Equal

3

Convenience Samples -‐  Willis Towers Watson Emerging Trends in Health Care 400+ Mid to Large

employers -‐  Employer Policies and PracIces Report US with 800 employers -‐  Aon HewiM Health Care Survey with 1,000 large employers Projectable Samples -‐  Mercer NaIonal Survey of Employer Sponsored Health Plans with 2,100+ -‐  Kaiser Family FoundaIon/HRET Employer Health Benefits Survey with 2000

employers Other -‐  Milliman Medical Index is an actuarial viewpoint on healthcare costs in

premiums, contribuIons, and out of pocket costs -‐  Best PracIces surveys, such as Mercer/HERO, Gallagher Best in Class

Benchmarking

*Projected Source: Mercer’s National Survey of Employer-Sponsored Health Plans; Bureau of Labor Statistics, Consumer Price Index, U.S. City Average of Annual Inflation (April to April) 1993-2014; Bureau of Labor Statistics, Seasonally Adjusted Data from the Current Employment Statistics Survey (April to April) 1993-2014.

Average Annual Increases in Health Benefit Costs Per Employee 1993-‐2015

8.0%

-1.1%

2.1% 2.5%

0.2%

6.1% 7.3%

8.1%

11.2%

14.7%

10.1%

7.5% 6.1% 6.1% 6.1%

6.3%

5.5%

6.9% 6.1%

4.1% 2.1%

3.9% 3.8% 4.3%*

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Workers' earnings Annual change in total health benefit cost per employee Overall inflation

Source: Milliman Medical Index, May 2016

Average Annual Increases in Health Benefit Costs for Employees and Employers 2001-‐2015

$5,277

$4,955

$4,823

$4,565

$4,316

$4,129

$3,997*

$3,515

$3,354

$3,281*

$2,973*

$2,713

$2,661*

$2,412*

$2,137*

$1,787*

$1,619

$1,543

$12,865

$12,591*

$12,011

$11,786

$11,429*

$10,944*

$9,773

$9,860*

$9,325*

$8,824

$8,508*

$8,167*

$7,289*

$6,657*

$5,866*

$5,274*

$4,819*

$4,247

3% 4%

3% 4%

4% 9%

3% 5%

5% 5%

6% 9%

10% 13%

13% 10%

11%

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999 Worker ContribuIon

Employer ContribuIon

Annual Increase

$18,142*

Average Annual Worker and Employer ContribuIons to Premiums and Total Premiums for Family Coverage, 1999-‐2016

*Es:mate is sta:s:cally different from es:mate for the previous year shown (p < .05).

SOURCE: Kaiser/HRET Survey of Employer-‐Sponsored Health Benefits, 1999-‐2016.

$5,791

$6,438*

$7,061*

$8,003*

$9,068*

$9,950*

$10,880*

$11,480*

$12,106*

$12,680*

$13,375*

$13,770*

$15,073*

$15,745*

$16,351*

$16,834*

$17,545*

Press Release

7

Average Annual Workplace Family Health Premiums Rise Modest 3% to $18,142 in 2016; •  More Workers Enroll in High-‐DeducIble Plans With Savings OpIon

Over Past Two Years – leaving tradiIonal PPOs;

•  Average DeducIble Rises 12% to $1,478 Annually for Covered Workers Who Have Them;

•  At Small Firms, Average DeducIbles Now Top $2,000

SOURCE: Kaiser/HRET Survey of Employer-‐Sponsored Health Benefits, 2016.

CumulaIve Premium Increases Covered Workers with Family Coverage, 2001-‐2016

63%

31%*

20%* 14% 12%

6%

15% 16% 11%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2001 to 2006 2006 to 2011 2011 to 2016

Premium Increases Overall InflaIon Workers' Earnings * Percentage change in family premium is sta:s:cally different from previous five year period shown (p < .05). SOURCE: Kaiser/HRET Survey of Employer-‐Sponsored Health Benefits, 2001-‐2016. Bureau of Labor Sta:s:cs, Consumer Price Index, U.S. City Average of Annual Infla:on (April to April), 2001-‐2016; Bureau of Labor Sta:s:cs, Seasonally Adjusted Data from the Current Employment Sta:s:cs Survey, 2001-‐2016 (April to April).

CumulaIve Increases Health Insurance Premiums, Workers’ ContribuIons to Premiums, InflaIon, and Workers’ Earnings, 1999-‐2016

98%

160%

213%

92%

167%

242%

24%

45%

60%

21%

35% 44%

0%

50%

100%

150%

200%

250%

300%

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Health Insurance Premiums Workers' ContribuIon to Premiums Workers' Earnings Overall InflaIon

SOURCE: Kaiser/HRET Survey of Employer-‐Sponsored Health Benefits, 1999-‐2016. Bureau of Labor Sta:s:cs, Consumer Price Index, U.S. City Average of Annual Infla:on (April to April), 1999-‐2016; Bureau of Labor Sta:s:cs, Seasonally Adjusted Data from the Current Employment Sta:s:cs Survey, 1999-‐2016 (April to April).

*Es:mate is sta:s:cally different between All Large Firms and All Small Firms es:mate (p < .05).


Average Annual Worker and Employer ContribuIons to Premiums and Total Premiums for Single and Family Coverage, by Firm Size, 2016

$1,021* $1,176* $1,129

$6,597* $4,719* $5,277

$5,408 $5,261 $5,306

$10,949* $13,676* $12,865

Small Firms (3 to 199 Workers)

Large Firms (200 or More Workers)

All Firms Small Firms (3 to 199 Workers)

Large Firms (200 or More Workers)

All Firms

Employer ContribuIon

Worker ContribuIon

$17,546* $18,395* $18,142

$6,429 $6,438 $6,435

Single Coverage Family Coverage

Average Percentage of Premium Paid by Covered Workers for Single and Family Coverage, 1999-‐2016

*Es:mate is sta:s:cally different from es:mate for the previous year shown (p < .05). SOURCE: Kaiser/HRET Survey of Employer-‐Sponsored Health Benefits, 1999-‐2016.

14% 14% 14% 16% 16% 16% 16% 16% 16% 16% 17%

19%* 18% 18% 18% 18% 18% 18%

27% 26% 26% 28% 27% 28%

26% 27% 28% 27% 27% 30%*

28% 28% 29% 29% 29% 30%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Single Coverage

Family Coverage

* Es:mate is sta:s:cally different from es:mate for the previous year shown (p < .05).

NOTE: Covered Workers enrolled in an HDHP/SO are enrolled in either an HDHP/HRA or a HSA-‐Qualified HDHP. For more informa:on, see the Survey Methodology Sec:on. The percentages of covered workers enrolled in an HDHP/SO may not equal the sum of HDHP/HRA and HSA-‐Qualified HDHP enrollment es:mates due to rounding.


Percentage of Covered Workers Enrolled in an HDHP/HRA or an HSA-‐Qualified HDHP, 2006-‐2016

2% 3% 3% 3% 7%* 8% 8% 9% 7% 9% 9%

2% 3% 4%* 6%

6% 9%* 11% 11% 14%

15% 19%*

0%

5%

10%

15%

20%

25%

30%

35%

40%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

HDHP/HRA HSA-‐Qualified HDHP

4% 5% 8%

8%

13%*

17%*

19% 20%

24%

20%

29%

Average Annual Firm and Worker Premium ContribuIons and Total Premiums for Covered Workers for Single and Family

Coverage, by Plan Type, 2016

*Es:mate is sta:s:cally different from All Plans es:mate by coverage type (p < .05).


$943* $1,129

$4,289* $5,277 $4,819* $5,306

$12,448 $12,865

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

$18,000

$20,000

HDHP/SO -‐ Single All Plan Types -‐ Single HDHP/SO -‐ Family All Plan Types -‐ Family

Worker ContribuIon Employer ContribuIon

$18,142

$16,737*

$5,762* $6,435

Family Coverage Single Coverage

$584 $616

$735*

$826*

$917*

$991

$1,097* $1,135

$1,217

$1,318

$1,478*

$303 $343

$433*

$533*

$646*

$747* $802

$883

$989*

$1,077

$1,221*

$300

$400

$500

$600

$700

$800

$900

$1,000

$1,100

$1,200

$1,300

$1,400

$1,500

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Average Deduc:ble Among Covered Workers With a Deduc:ble

Average Deduc:ble Among All Covered Workers

* Es:mate is sta:s:cally different from es:mate for the previous year shown (p<.05). NOTES: Average general annual deduc:ble is among all covered workers. Workers in plans without a general annual deduc:ble for in-‐network services are assigned a value of zero. SOURCE: Kaiser/HRET Survey of Employer-‐Sponsored Health Benefits, 2006-‐2016.

Average General Annual DeducIble for Covered Workers Enrolled in Single Coverage, 2006-‐2015

CumulaIve Increases in Health Insurance Premiums, General Annual DeducIbles, InflaIon, and Workers’ Earnings, 2011-‐2016

6%

11%

63%

19%

0%

10%

20%

30%

40%

50%

60%

70%

2011 2012 2013 2014 2015 2016

Overall InflaIon Workers Earnings Single Coverage DeducIbles, all Workers Single Coverage Premiums

NOTE: Average general annual deduc:ble is among all covered workers. Workers in plans without a general annual deduc:ble for in-‐network services are assigned a value of zero. SOURCE: Kaiser/HRET Survey of Employer-‐Sponsored Health Benefits, 2011-‐2016. Bureau of Labor Sta:s:cs, Consumer Price Index, U.S. City Average of Annual Infla:on (April to April), 2011-‐2016; Bureau of Labor Sta:s:cs, Seasonally Adjusted Data from the Current Employment Sta:s:cs Survey, 2011-‐2016 (April to April).

Percentage of Covered Workers Enrolled in a Plan with a General Annual DeducIble of $1,000 or More for Single Coverage, by Firm

Size, 2009-‐2016

40% 46%

50% 49%

58%* 61% 63% 65%

13% 17%

22%* 26% 28%

32%

39%* 45%

22% 27%*

31% 34%

38% 41%

46% 51%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2009 2010 2011 2012 2013 2014 2015 2016

All Small Firms (3-‐199 Workers)

All Large Firms (200 or More Workers)

All Firms

* Es:mate is sta:s:cally different from es:mate for the previous year shown (p< .05).

NOTE: These es:mates include workers enrolled in HDHP/SO and other plan types. Average general annual health plan deduc:bles for PPOs, POS plans, and HDHP/SOs are for in-‐network services.


Percentage of Covered Workers Enrolled in a Plan with a General Annual DeducIble of $1,000 or More for Single Coverage Aner any

HRA/HSA ContribuIons, by Firm Size, 2009-‐2016

34% 40% 42%

39%

50%* 52% 55% 56%

9% 12% 14%

20%* 19% 24%*

28% 31% 17%

22%* 23% 26%

29% 32%

36% 38%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2009 2010 2011 2012 2013 2014 2015 2016



All Firms


NOTE: The net liability for covered workers enrolled in a plan with an HSA or HRA is calculated by subtrac:ng the account contribu:on from the single coverage deduc:ble. HRAs are no:onal accounts, and employers are not required to actually transfer funds un:l an employee incurs expenses. General annual deduc:bles are for in-‐network services.


Among Covered Workers Enrolled in an HDHP/SO, Average General Annual DeducIbles for Single Coverage Aner HRA/HSA ContribuIons, 2016

14%

7%

9%

47%

28%

34%

39%

65%

57%

HDHP/HRA

HSA-‐Qualified HDHP

All HDHP/SO Plans

Account ContribuIon Greater Than or Equal To DeducIble

DeducIble Aner ContribuIon Is $1,000 or Less

DeducIble Aner ContribuIon Is More Than $1,000

NOTE: “Not encountered” refers to firms where no workers requested domes:c partner benefits and there is no corporate policy on coverage for that classifica:on of domes:c partners.


Among Firms Offering Health Benefits, Percentage That Offer to Spouses, Dependents and Partners, 2016

11%

89%

99%

88%

100%

32%

49%

26%

42%

89%

100%

11%

1%

12%

35%

47%

45%

56%

34%

5%

28%

2%

Yes

No

Not Encountered

Firm Only Offers Single Coverage

All Small Firms (3 to 199 workers)

All Large Firms ( 200 or More Workers)

Firm Offers Coverage to Spouses



Firm Offers Coverage to Other

Dependents



Firm Offers Coverage to Same-‐Sex

DomesIc Partners

All Small Firms (3 to 199 workers


Firm Offers Coverage to Opposite-‐Sex

DomesIc Partners



ADDITIONAL COST MANAGEMENT ACTIONS

Eligibility, Contribu:ons, Incen:ves

* Es:mate is sta:s:cally different within response selec:on from all other firms not in the indicated firm size category. SOURCE: Kaiser/HRET Survey of Employer-‐Sponsored Health Benefits, 2016.

Among Firms Offering Family Coverage, Percentage of Employers Using Various Approaches to Family Premium ContribuIons, by Firm Size, 2016

45%*

18%*

45%*

67%*

7%

9%

3%

6%


All Large Firms (200 or

More Workers)

Firm contributes the same dollar amount for family coverage as for single coverage

Firm contributes a larger dollar amount for family coverage than single coverage

Some other approach

Varies by class of employees

Among Large Firms (200 or more workers) Offering Health Benefits, Percentage of Firms Offering IncenIves for Various Wellness and Health

PromoIon AcIviIes, 2016

NOTE: Among large firms that offer a health risk assessment, 54% had incen:ves or penal:es to encourage employees to complete it. Among large firms that offer biometric screening, 59% had incen:ves or penal:es to encourage employees to complete it and 14% had incen:ves or penal:es for employees to meet a biometric outcome. Among large firms that offer a wellness program, 42% had incen:ves or penal:es to encourage employees to complete it.

‡ Firms that offer either “Programs to Help Employees Stop Smoking”, “Programs to Help Employees Lose Weight”, or “Other Lifestyle or Behavioral Coaching”.


59%

32%

53%

31%

8%

74% 68%

73% 83%

32%

0%

20%

40%

60%

80%

100%

Opportunity to Complete Health Risk Assessment

IncenIves to

Employees Who

Complete HRAs

Opportunity to Complete Biometeric Screening

IncenIve For

Employees To Complete Biometric Screening

Reward or Penalty For MeeIng Biometric Outcomes

Programs to Help

Employees Stop

Smoking

Programs to Help

Employees Lose Weight

Lifestyle or Behavioral Coaching

Any Wellness Program Offered to Employees‡

IncenIves to

Encourage Employees

to ParIcipate

in or Complete Wellness Program

Health Risk Assessments Biometric Screening Wellness Programs

Among Large Firms That Offer Employees an IncenIve to ParIcipate In or Complete Any Health PromoIon Programs, Maximum Annual Value of the IncenIve for All Programs Combined‡, 2016

26%

35%

23%

9% 7%

0%

10%

20%

30%

40%

50%

$150 or Less >$150 to $500 >$500 to $1,000 >$1,000 to $2,000 Greater than $2,000

Large Firms (200 or more Workers)

‡Includes incen:ves for health risk assessments, biometric screenings, and wellness programs. Forty-‐nine percent of large firms offering health benefits offer incen:ves for at least one of these ac:vi:es. NOTE: Firms with at least one of the listed health promo:on programs were asked to report the maximum incen:ve an employee and his/her dependents could receive for all of the firm's health promo:on programs combined. SOURCE: Kaiser/HRET Survey of Employer-‐Sponsored Health Benefits, 2016.

Among Large Firms Offering Health Benefits, Percentage of Firms That Have Taken Various AcIons in AnIcipaIon of the Excise Tax on High Cost Plans,

2016


64%

15% 9% 8%

1% 2% 2% 1% 1% 0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Conducted an analysis to determine if plans will

exceed limits

Increased Cost Sharing

Switched to a Lower Cost Plan or

Eliminated a Plan Op:on

Moved Benefits Op:ons to

Account based plan such as an HRA or HSA

Began Offering Health

Insurance through a Private Exchange

Selected a Plan with a Smaller Network of Providers

Other Eliminated FSA Reduced the Scope of Covered Services


24

Among Firms Who Have Conducted an Analysis to Determine Their Liability Under the Excise Tax, Percentage of Large Firms (200 or more workers) that Believe that

Their Plan with the Largest Enrollment Will Exceed the Thresholds, 2016

Note: Sixty-‐four percent of large firms (200 or more workers) offering health benefits report that they conducted an analysis to determine if plans will exceed the thresholds. SOURCE: Kaiser/HRET Survey of Employer-‐Sponsored Health Benefits, 2016.

26%

27%

31%

67%

58%

65%

7%

15%

4%

2018

2020

Percentage of Firms Whose Largest Plan will Exceed the Limits in:

Percentage of Firms That Reconsidered or Postponed Changes Because of the Delay from 2018 to 2020

Yes No Don't Know

Among Offering Firms with 50 or More Employees, Percentage of Covered Workers Enrolled at a Firm That Offers Benefits Through a Private or

Corporate Exchange, by Firm Size, 2016

NOTE: A private exchange is one created by a consul:ng company; not by a federal or state government. Private exchanges allow employees to choose from several health benefit op:ons offered on the exchange. In 2016, 4% of offering firms with 50 or more employees offered coverage through a private exchange.


3% 2% 1% 2% 2%

0%

10%

20%

30%

40%

50%

50-‐199 Workers 200-‐999 Workers 1,000-‐4,999 Workers 5,000 or More Workers


~ Firms were asked if their plan with the largest enrollment had these features. ‡ Among Firms with 50 or more employees. Twenty-‐five percent of offering firms with 1,000 or more employees have an on-‐site clinic. SOURCE: Kaiser/HRET Survey of Employer-‐Sponsored Health Benefits, 2016.

Among Firms Offering Health Benefits, Percentage of Firms Whose Plans Include Various Features, by Firm Size, 2016

60%*

20%*

3%*

11% 6% 7%

73%*

39%*

12%* 14%

5% 6%

0%

20%

40%

60%

80%

100%

Coverage At Retail Clincs~

Delievery of Care Through Telemedcine~

On-‐Site Health Clinic‡ High Performance or Tiered Provider

Network~

Eliminated Hospitals or Health Systems From

Network

Offers Plan Considered a Narrow Network



Among Large Firms (200 or more Workers) Offering Health Benefits, Percentage of Firms Whose Plan With the Largest Enrollment Includes The

Delivery of Services through Telemedicine, 2016

NOTE: Telemedicine is the delivery of health care services through telecommunica:ons to a pa:ent from a provider who is at a remote loca:on, including video chat and remote monitoring. In 2016, we modified our ques:ons about telemedicine to clarify that we were interested in the provision of health care services, and not merely the exchange of informa:on, through telecommunica:on.


39% 37% 33%

0%

10%

20%

30%

40%

50%

Percentage of Large Firms Whose Plan with the Largest

Enrollment Covers Telemedicine

Firm Covers Behavioral Health Through Telemedicine

Firm has Financial IncenIve for Workers to Use

Telemedicine Instead of VisiIng a Physician's Office

In-‐Person

Among Large Firms Whose Largest Plan includes Coverage through Telemedicine

EMPLOYEE BENEFIT TRENDS 14th Annual MetLife Study

30

What Do Employers Want?

SOURCE: MetLife’s 14th Annual US Employee Benefit Trends Study 2015

What Do Employees Want?

SOURCE: Mercer “Inside Employee’s Minds”, 2015

Employees are Financially Frustrated

32

Gevng to the Heart of Financial Fears

33

34

Employee Benefits Match?

OpportuniIes

35

OpportuniIes

36

Opportunity for Greater Understanding

37

OpportuniIes

DEFINED CONTRIBUTION The Transi:on is Underway

Capitalizing on the Opportunity Economists have posited that defined-‐contribuBon health insurance plans offer two key benefits. 1.  First, enrollees in such plans receive more choice than they would in the

one-‐size-‐fits-‐all plans typically offered by employers. They can thus consider the quality of plans and express their preferences for various features of benefits packages, such as open or limited provider networks and low or high deduc:bles.

2.  Second, defined-‐contribu:on plans can give employers greater certainty about costs, insula:ng them from unpredictable health care infla:on. Such plans might also curb or reverse the trend toward employees’ passively shouldering the growing costs of employer-‐based defined-‐benefits plans. (Between 2003 and 2013, employer spending increased by 77%, while employees’ costs increased by 89%) .

ShiGing toward Defined ContribuBons — PredicBng the Effects By Kevin A. Schulman, M.D., Barak D. Richman, J.D., Ph.D., and Regina E. Herzlinger, D.B.A. The New England Journal of Medicine, June 26, 2014

DC Best PracIces

§  Communicate … early, and ouen

§  Leverage technology … in a year you’ll thank yourself §  Be transparent … it diffuses the “take away” chaver §  Provide tools … examples, decision support, cost calculators all will engage employees and breed trainers

§  Provide meaningful op:ons with a no:ceable cost spread §  Set expecta:ons … Will plans change every year? Will we get the same DC allowance every year?

Ø  This is your :me to set a long term strategy!

Documents

Trends&’Plan’Strategiesfor’2017’&’Beyond ...’Plan’Strategiesfor’2017’&’Beyond ... Stas:cs,’Seasonally’Adjusted’Datafrom’the’CurrentEmploymentStas:cs’Survey,’2011F2016’