- Posted by Chris Elvidge
- On April 21, 2015
As the ongoing affordability question of health care insurance continues, there is a consistent inquiry we hear from our clients—what are other employers doing to manage escalating health care premiums? Below are just a few examples of the strategies clients are adopting to help stay above water with managing this expense:
Spousal and Dependent Participation, Defined Contribution
Among the actions gaining traction are changes to benefits for spouses and dependents. For example, the percentage of employers using spousal surcharges (when coverage is available elsewhere) is expected to nearly double in the next three years according to a recent Towers Watson survey. Half of the respondents plan to significantly reduce subsidies for spouses and dependents by 2018. In addition, four in 10 employers say they may adopt a defined contribution arrangement (capping employer contributions at a flat dollar amount) by 2018.
Narrow Networks, Telemedicine, and More Rigid Specialty Pharmacy Programs
An emerging trend available from some carriers is managing cost by offering a more limited network from a ‘subset’ of their whole provider base. Using these specific ‘centers of excellence’ (within health plans or via a separate network) and ‘narrow networks’ are expected to triple over the next three years. The use of telemedicine (phone or web based) services in place of in-person physician visits, when appropriate, will continue to be adopted, already expanding by more than one-third in 2015 over 2014. Over 80% of employers say they could be offering telemedicine services by 2018 according to a new Towers Watson study. Over the next few years, more than 80% of employers will evaluate specialty pharmacy programs and benefits embedded in their medical plans. Over half of employers have taken a more aggressive approach at step therapy protocols and utilization restrictions in their specialty pharmacy (injectable and Biotech drugs) strategy today. Specialty drug and ‘compound’ drug use can drive significant cost in a pharmacy benefit plan.
Increased Employee Engagement
There is a definite benefit to a healthy workforce and encouraging employees to take control of their health should be a priority for all companies. Many employers are now making employee engagement and accountability a critical component of their benefit plan—developing or enhancing a workplace culture where employees are responsible for their health. Adopting and expanding the use of financial incentives to encourage healthy behaviors can help change behavior and healthy engagement.
Among employers surveyed, the most popular tactics for boosting employee engagement in health care are:
Education and tools for better decision-making – Nearly half of employers will place more emphasis on educating employees about how to select providers based on quality and cost information (transparency) over the next two years. Many of these transparency tools are already available from the carriers.
Mobile apps to deliver health messages – Today, 60% of employers deliver health and wellness messages through mobile apps and portals. That percentage will increase to 95% by 2018.
High Deductible, HSA compatible Accounts ONLY – While 17% of employers currently offer full-replacement HDHP HSA’s (high-deductible plans tied to tax-advantaged health savings accounts), the percentage may increase to nearly 50% by 2018.
For more details and assistance in formulating a successful benefits strategy and managing rising costs, contact your KTB Employee Benefits Consultant or Account Executive.
Towers Watson surveyed 444 mid-sized US employers representing 7.2 million employees in January 2015 to yield insights into what actions were being anticipated over the next three years.