New Health Benefits Survey Reveals Changes in Plan Design

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Conrad Siegel Actuaries Releases Results from its Annual Medical and Prescription Drug Survey

Conrad Siegel Actuaries released the results of its annual Medical and Prescription Drug survey, an employee benefits survey gauging how Central PA businesses manage health benefits.

As we continue to see healthcare costs increase, employers are more prone to reduce benefits rather than passing costs onto employees through payroll deductions.

Conrad Siegel Actuaries, delivering comprehensive employee benefits services, announced today the results of its annual Medical and Prescription Drug survey, an employee benefits survey gauging how Central PA businesses manage health benefits.

The survey revealed that employer premium sharing continues to remain consistent this year, which shows that employers may be changing the benefit design instead of shifting more premium costs to employees. Based on the survey results, the average percentage of the medical premium that employees paid in 2014 was 15 percent, and the average percentage of the medical premium paid for employee plus dependents was 21 percent.

“As we continue to see healthcare costs increase, employers are more prone to reduce benefits rather than passing costs onto employees through payroll deductions. To a degree, this may be in response to concerns over the impending impact of the Cadillac Tax,” said Rob Glus, partner at Conrad Siegel Actuaries. “To mitigate the increasing costs, many employers are taking on more risk with self funding, cutting back on spousal coverage and encouraging employees to better manage their costs through consumer directed plans.”

Self-Funding Surpasses Fully Insured Plans
Self-funded arrangements for medical plans have increased over the past year and for the first time they are more prevalent than fully insured plans. In self-funded arrangements, groups take more risk by paying the cost of their claims plus an administrative fee. According the survey, 52 percent of plans are self-funded and 48 percent of plans are fully insured. In 2013, employers reported that 40 percent were self-funded and 60 percent of plans were fully insured. The increase may be in response to the Health Insurers Tax (HIT) on insured plans, which is not assessed on self-funded plans.

Cutting Back on Spousal Coverage
Approximately 47 percent of employers are either charging spouses more to be covered or not allowing them on the plan if they have access to coverage through their own employer. Thirty one percent of employers do not cover spouses who have coverage available through their own employer, which is up from 25 percent in 2013 and from 20 percent in 2012. Of the 69 percent of employers that will cover spouses who have health insurance available through their own employer, 16 percent require a surcharge. The average yearly surcharge is approximately $1,700.

Consumer-Directed Health Care
Consumer directed health care plans include Health Savings Accounts (HSA), Health Reimbursement Accounts (HRA), Medical Expense Reimbursement Plans (MERP) and Flexible Spending Accounts (FSA). The survey showed an increase in the amount of Central PA companies offering health spending accounts in conjunction with a qualified high deductible health plan to their employees. The HSA programs enable employees to receive tax-preferred treatment of money saved for medical expenses.

  • Twenty percent of employers offer a HSA to their employees.
  • Of the employers that offer a HSA, 73 percent fund at least part of the account. The average funding for individuals is approximately $840 and the average funding for families is $1,560.
  • Twenty one percent of employers offer a HRA or a MERP to employees. Ninety six percent of the companies offering these plans fund at least a portion of the deductible.
  • Forty-seven percent of employers offer a FSA to employees.

Over 130 companies of all sizes responded to the survey with 60 percent coming from organizations with more than 100 employees. Companies that responded to the survey were from a wide range of industries including Education, Healthcare, Social Assistance, Government, Manufacturing, and Finance.

Conrad Siegel Actuaries maintains one of the largest, most comprehensive regional employee benefit databases available today in central Pennsylvania. Through its regional employee benefits survey program, Conrad Siegel Actuaries is able to benchmark the best practices surrounding local employer benefit programs.

For more information about the Conrad Siegel Actuaries Health & Welfare Survey or to participate, please contact the Benefit Survey Team at benefitsurvey(at)conradsiegel(dot)com.

About Conrad Siegel
Conrad Siegel Actuaries is one of the largest and most respected employee benefits firms in the Mid-Atlantic region. Recognized as both an industry leader and a trusted advisor, the firm stands apart by offering unbiased, fee-based services backed by careful attention to detail. Conrad Siegel partners with its clients to offer a comprehensive source for all employee benefit needs. For more information, please visit http://www.conradsiegel.com.

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Amanda Ratner
Abel Communications
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