Health Care Reform Uncertainty

Health Care Reform Uncertainty: What You Can Do Now

Since all we’ve been hearing on the healthcare front these days is uncertainty about the impact of proposed health care reform, we thought it would be helpful to share a little about the facts we DO know about the cost of health care and how employers’ plans currently measure up to each other.

As health insurance costs continue to rise, there’s been a significant increase in interest amongst employers to get their hands on benchmarking data for their plans. They want to compare their costs and contributions to national and regional numbers, by company size and industry.

Findings from the 2016 Health Plan Benchmarks Report

At Beneflex, each year we provide our clients with a customized health plan benchmarks report so that they can see how they stack up. We find that, especially here in Santa Barbara, employers competing for talent crave this information. This year it seems employers are more prominently focusing on out of pocket maximums, lower cost consumer driven health plans, and prescription drug coverage as cost levers to tap. Here are a some of the key findings from our 2016 survey:

  • Increase in Employee Out of Pocket Expenses: Here on the West Coast we were not the most expensive geographically (that prize goes to the Northeast), but we are also not the least expensive. As a result, employers continue to react to increasing premium costs by increasing employees’ out of pocket costs. The median in-network single deductible for PPO plans has jumped 50% (up from $1,000 in 2015 to $1,500 in 2016). This, coupled with employees’ contributions to their premiums also being increased, is creating significant hardship for these employees.
  • Increase in Consumer Directed Health Plans: Consumer directed health plans increased in prevalence to represent a quarter of all plans and these plans are seeing enrollment increases of nearly 70% since 2012.
  • No More Paying Based on Generic vs Brand Prescriptions: Both insurance carriers and employers are implementing prescription drug plans that restrict access to more costly medications by moving to four, five and even six-tier plans. 53% of plans now offer four tiers or more of coverage, which means gone are the days of just paying based on Generic or Brand.

Our Data Helps Employers

You may be thinking, “what are employers supposed to do with this kind of data?” Well, we’ve had a lot of success in using our benchmarking survey to help employers identify where their strengths and weaknesses are. Then, we help them to leverage their areas of high performance by communicating this data to their employees through proactive benefits communication, such as like total compensation statements.

We also communicate to future employees the value of a company’s benefits so that they will choose that employer over others they may be considering. Finally, for the areas of weakness that the employer identifies, we provide innovative ideas to redesign and refinance their package to offset those weaknesses. For example, we helped one client restructure their benefits so that their medical plan had a high deductible but also embedded a carefully designed Health Reimbursement Account to offset the out of pocket costs to their employees. This worked well to reduce costs to both the employer and employee, while encouraging good health.

It is important to find out how you stack up so you are empowered to make smart decisions with your benefits. Don’t leave it all in the hands of our future health care reform (whatever that may end up looking like).

Contact us today for more information on how we can help you to start controlling your costs today!

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