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AIS's Health Business Daily
Featured Story November 10, 2008 New Study Finds That Employers Want Health Plans to Help Control Premiums Reprinted from HEALTH PLAN WEEK, the industry's leading source of business, financial and regulatory news of health plans, PPOs and POS plans. By Chris Meehan, Contributing Editor, (cmeehan@aispub.com) As employers roll out their benefit plans for the 2009 plan year, a new study finds that they want health plans to help them minimize premium rate hikes and offer products that can help them better manage the health of their employees. On Oct. 15, PricewaterhouseCoopers, LLP (PwC) released the results of an employer-satisfaction study that targeted 12 aspects of health coverage. The company's Health Research Institute surveyed CEOs from 250 companies with fewer than 250 employees, and senior executives at 107 large U.S.-based multinational companies. Ben Isgur, director of the Health Research Institute, tells HPW that the overall value of the health plan is the most important factor for employers to consider. He says employers are looking for an "insurer that can become a partner" with the employer to help them keep rate hikes under control "without having to pass it on to employees." Asked whether the recent economic decline is affecting purchasing decisions, he says, "We certainly had a drop over the last 10 years of small employers offering insurance. The [unstable economy] makes the situation that much more acute," Isgur says. Large employers, which typically finalize their coverage contracts for the following year over the summer months, will be less affected in their 2009 offerings by the turmoil on Wall Street. According to PwC, 93% of large employers and 84% of small employers say claims-handling accuracy and timeliness is the most important factor to consider when looking for a health insurer. Provider discounts were important to 82% of large-group and 71% of small-group respondents, the second most important factor in choosing a health plan. The vast majority (78%) of large groups cited the importance of employee wellness benefits. Small groups, however, told PwC that administrative costs and access to eligibility/payments were more important (56% of respondents) than wellness benefits (50% of respondents). The largest satisfaction discrepancy between large and small employers was seen in wellness benefits. Only 50% of small businesses were satisfied with wellness programs, while 74% of their larger peers were. Despite their responses, "Employers are willing to forgo customization of health coverage (e.g., reducing the number of plans offered) in exchange for a reduction in costs," PwC explained. In fact, 69% of large and 63% of small employers would accept less health plan customization in exchange for significant administrative fee reductions, according to the firm. Health Incentives to Become More Common A report released last month by Watson Wyatt asserted that "the number of employers offering financial incentives to maintain healthy lifestyles or participate in wellness programs continues to grow." The company also said employer offerings for 2009 will include value-based drug benefits, shifting from copayments to coinsurance, and more access to clinics — on-site and retail — and health coaches. Recent estimates
from benefits consulting firms peg 2009 premium rate increases versus
2008 at 6%. Michael Taylor, an employee benefits consultant at Towers
Perrin, says premiums for the 2009 plan year are "pretty much set."
But the recent financial problems mean Towers Perrin clients, many of
which have self-funded plans, are likely to see a higher percentage
premium increase in subsequent years. He says health plans are continuing
to add more value to their products. They're "offering employers
a sort of one-stop shop," he contends. And he says health plans
are seeing pressure to increase the amount of health care information
technology used, so that claims processing is more accurate. The recent
meltdown of the financial markets will have employers going "back
to basics" in the short term, he adds. |
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