From asking employees to pay a greater portion of premiums to offering incentives for healthy lifestyles, some of the country's largest employers are using a number of cost control measures to counter the expected rise in health care benefits in 2013.
This is according to a new survey from the National Business Group on Health, a nonprofit association of 342 large employers. The data provided one of the industry's first looks at cost and plan design changes for 2013 as employers continue to make adjustments to their benefit plans to comply with additional provisions of the health reform law.
Employer-provided health care benefits at large U.S. employers are expected to rise 7% next year, said the survey, which was based on responses taken in June from 82 of the nation's largest corporations. That's the same increase they projected for this year, but smaller than employers experienced the previous three years.
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Despite being able to hold the line on increases, six of 10 employers said they plan to increase the percentage of the premium paid by employees in 2013, although the majority of those employers indicated that the increase would be by a small amount of less than 5%. Additionally, 40% plan to increase in-network deductibles while roughly one-third will increase out-of-network deductibles (33%) and out-of pocket maximums (32%).
While many employers continue to adopt cost-sharing provisions, survey respondents now consider consumer-directed health plans and wellness initiatives to be more effective at stemming cost than shifting costs to employees.
According to the survey, 43% cited a CDHP as the most effective cost control tactic followed by wellness programs (19%). Less than one in 10 (9%) respondents reported increased employee cost-sharing as the most effective tactic. Last year, cost shifting was cited as the most effective measure.
"Rising health care costs continue to plague employers at an alarming rate," said Helen Darling, NBGH president/CEO, in a statement. "Although cost increases have stabilized somewhat, they are still on a higher base from last year and are simply not sustainable, especially when our nation's economy and workers' wages are virtually flat and everybody is struggling."
The survey found that employers, in their efforts to engage employees in healthy behaviors and lifestyles, continue to experiment and perfect the best ways to incorporate financial incentives into wellness programs.
While nearly half of respondents (48%) use incentives to encourage participation in programs, some employers are basing incentives on specific health outcomes. More than four in ten (44%) provide an incentive based upon tobacco-use status while three in ten (29%) base awards upon achievement of outcomes such as BMI or cholesterol levels. Just under one-fourth of respondents (22%) take a different approach– applying surcharges to employees for not participating in certain programs.
The survey also reported that employers plan to sharply increase the incentive amount for maintaining a healthy lifestyle or participating in a wellness program. Among employers that offer incentives, the median amount employees can earn will jump 50% from $300 this year to $450 next year. The median incentive amount that dependents can earn is expected to increase from $250 this year to $375 in 2013.
Respondents were asked what changes they made or are planning to make as regulations from the Affordable Care Act continue to come into effect. The survey found that half of respondents (50%) no longer have any annual benefit limits in place, while nearly one third (32%) did not make any changes to their annual limits this year.
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