UBA Health Plan Survey Shows Modest 2020 Group Health Plan Cost Increases, Helping Employers Maintain Benefit Plans in Uncertain Times

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Data from the nation’s largest benchmarking survey reveal sectors with the richest plans, regions with the highest cost increases, and small business surprises

"Knowing the plan offerings, contribution levels and deductibles being used by your industry peers is not only crucial when negotiating competitive plans, but it’s a game changer when communicating plan value to employees."- Gary Jurney, UBA Board President

According to the 2020 United Benefit Advisors (UBA) Health Plan Survey, released September 1, 2020, premium renewal rates (the comparison of similar plan rates year over year) for employer sponsored health insurance again rose modestly in 2020. At 5.4%, this was up slightly from the 4.6% increase in 2019, but still considerably less than the nearly 10% increase seen in 2018—the highest increase in the last decade. With fewer cost burdens, employers largely kept in-network deductibles and routine copays flat for singles, although in-network deductibles for families are inching up by $500 on average.

United Benefit Advisors® (UBA) has years of experience surveying thousands of employers across the nation regarding their group health plan offerings. In fact, UBA’s survey is nearly three times larger than the next two of the nation’s largest health plan benchmarking surveys combined. Since 2005 the local Partners across the U.S. have studied plan design and cost trends among employers on a state, regional and national basis. Data in the 2020 UBA Health Plan Survey are based on responses from 11,788 employers sponsoring 21,980 health plans covering 1,366,186 employees nationwide.

Among the key findings in this year’s survey, average plan costs per employee per year are $10,736, with employers contributing approximately 68% of the costs and employees covering 32% on average. The majority of employers nationwide favor preferred provider organization (PPO)/point of service (POS) plans, though California employers still prefer health maintenance organization (HMO)/exclusive provider organization (EPO) plans. Health savings account (HSA) plans (often referred to as “consumer directed” or “high deductible” plans) are popular in the Central and North Central U.S. The majority of employees (nearly 60%) prefer PPO/POS plans; HSAs continue to attract about a quarter of employees, and, excluding California, HMO/EPO plans garner fewer than 15% of employees.

A significant variance between regions makes it valuable for employers to consider each region’s unique trends. For example, while plans in the Northeast are perennially the richest with the highest price tag ($12,460 in 2020), plans in the Central and Northeast regions saw the highest cost increases this year (3%).

Different industries sometimes depart from national and even regional trends. Like their Northeast counterparts, employers of government, education and utility workers offer the richest and priciest plans ($12,324), while these employees contribute the least toward these costs (only 23.4%). In contrast, plans offered by information, arts, and accommodation and food employers are among the lowest cost plans ($9,660), while employees in the construction, agriculture, and transportation industries have the highest contributions (36.4%). “Knowing the plan offerings, contribution levels and deductibles being used by your industry peers is not only crucial when negotiating competitive plans, but it’s a game changer when communicating plan value to employees,” says Gary Jurney, UBA Board Chairman.

Benchmarks by group size offer additional guidance when strategically managing renewal decisions. “Given that UBA’s survey analyzes thousands of large, midsize and small businesses, we can uniquely offer trends by business size,” says Jurney. “For example, while the majority of plans are fully-insured, more than 60% of large employers (500+ employees), 30% of midsize employers (100-499 employees), and a surprising 18% of small employers opted for self-funding, indicating that this model can be a viable option even for small businesses.”

Beyond plan choices and premiums, the UBA Health Plan Survey revealed useful information about many other aspects of benefits plans that employers may want to take note of and continue to watch.

Prescription Drug Plans—Most prescription drug plans now have four tiers. Specifically, survey data show only 19.9% of prescription drug plans have three tiers, nearly 47% of plans have four tiers (up 6% from 2019), and approximately 14% of plans have five tiers. Plans with six tiers grew 42% from last year to 14.5%. While employers with 100 or more employees still primarily offer three- and four-tier plans, smaller employers (fewer than 50 employees) are leading the expansion of five- and six-tier plans, while divesting of three-tier plans.

Deductibles and Out-of-Pocket Costs— While employers have largely kept in-network deductibles for singles unchanged in 2020, in-network family deductibles increased by $500 on average for those on PPO/POS and HMO/EPO plans. But all plans continue to discourage use of non-participating physicians by singles and families by increasing out-of-network deductibles. For example, singles on a PPO/POS plan who go out of network for care face a $5,000 deductible—up from $4,000 in 2019. Out-of-pocket maximums (both in-network and out-of-network) continue to rise for PPO/POS plans (though they remained flat for other plan types). For example, families in PPO/POS plans face a $12,000 in-network out-of-pocket maximum, up from $11,300 in 2019.

Wellness—The survey found that large employers continue to lead when it comes to offering wellness. The primary form of wellness incentives are in the form of extra paid time off, with more than 52% offering the reward for participation. This is up 12% from 2019 and an astronomical 952% from five years ago.

More information, statistics and trends are available in the 2020 UBA Health Plan Survey Executive Summary, available now at https://ubabenefits.com/wisdom/benchmarking/.

About the 2020 UBA Health Plan Survey
The 2020 UBA Health Plan Survey contains the validated responses of 21,980 health plans and 11,788 employers, who cumulatively cover more than 1.3 million employees nationwide. While other surveys primarily target large employers, the focus of the UBA survey is to report results that are applicable to the small and midsize companies that represent the overwhelming majority of the nation’s employers, while also including a mix of large companies in rough proportion to their actual prevalence, nationally. This is an important distinction compared to other national surveys.

About United Benefit Advisors
United Benefit Advisors® (UBA) is the nation’s leading independent employee benefits advisory organization with more than 200 offices throughout the United States, Canada, England and Ireland. UBA empowers more than 2,000 fellow professions to both maintain their individuality and pool their expertise, insight, and market presence to provide best-in-class services and solutions. Employers, advisors and industry-related organizations interested in obtaining powerful results from the shared wisdom of our Partners should visit UBAbenefits.com.

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