2013 healthcare benefits trends study

2013 Healthcare Benefits Trends

Benchmark Study

healthcaretrendsinstitute.org

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BackgroundIn the fall of 2013, the Healthcare Trends Institute, an educational

platform focused on the rapidly changing healthcare benefits industry, conducted a national survey regarding trends in employee healthcare benefits. Polling more than 300 human resources (HR) executives, benefit specialists, and other benefit decision-makers across the country, the survey explored the current state of employee healthcare benefits as well as how they are expected to develop in response to sweeping healthcare reform legislation, also known as the Affordable Care Act (ACA). This includes the shift to defined contribution health plans, the launch of insurance exchanges, and the implementation of wellness plans.

This survey formed the basis for the 2013 Healthcare Benefits Trends report on the following topics:

Current State of HealtHCare BenefitS: Identifies the most widely deployed employee and healthcare

benefits plans, as well as how companies are responding to healthcare reform legislation.

uSe of DefineD ContriBution HealtH PlanS, inSuranCe exCHangeS, anD WellneSS PlanS:

Details the awareness and adoption of defined contribution health plans and insurance exchanges (public and private), and the use of wellness programs to incentivize employees.

HealtHCare BenefitS trenDS – looking forWarD: Measures the importance of notable healthcare benefits trends

and the outlook for 2014.

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Study Highlights• Healthinsuranceisthemostcommontypeofemployeebenefitsofferedtoday

with95.2%ofrespondentsreportingtheircompanycurrentlyoffersit

• Themajorityoftheemployeehealthbenefitprogramsofferedbyrespondents’companiesincludeemployee+dependents(80.8%),PPO(70.8%),prescriptiondrug(66.8%),andmentalhealth(45.6%)

• Themajorityofrespondents(64.8%)indicatedhealthbenefitsofferingswereveryimportantforretainingandattractingemployees

• Ofthosewhosecompaniesofferedemployeehealthbenefits,amajority(35.2%)oftherespondentsindicatedtheircompanyoffersthreeormoredifferentgrouphealthinsuranceplanoptions,34%reportingonlyofferingonegrouphealthplanoption,whileslightlyless(30.8%)offeredtwohealthplanoptions

• Respondentsindicatedhealthcarereformwillimpacttheiremployeebenefitspackagesbyincreasingemployeecost-sharing(38.4%)andincreasingpremiumcontributions(33.6%)

• Themajorityofrespondents(59.4%)indicatedtheyweresomewhattoveryfamiliarwithDefinedContributionPlans(DCPs)astheyrelatetohealthbenefits

• OftherespondentswhoindicatedtheywereinterestedinDCPsforthefuture,55.8%reportedtheywereconsideringfor2015followedby26.9%in2016,and17.3%indicatedconsideringDCPsbeforetheendof2014

• 62.1%ofrespondentsaresomewhattoveryfamiliarwithpublicexchangesand55.5%somewhattoveryfamiliarwithprivateexchanges

• Oftherespondentsindicatingtheyweresomewhattoveryfamiliarwithexchanges,morethanhalf(51.3%)indicatedtheybelievedexchangeswillhelpemployeesmakemorecost-consciousbenefitdecisionsaswellasofferawiderarrayofoptionsforbenefitplans

• 43.9%ofcompaniessurveyedarealreadyusingsomekindofhealthylifestyleincentive/program,while22.6%areconsideringoneforthefuture

• Topromotepositivehealthoutcomes,61%ofcompaniesofferatleastonewellnessprogram,and43%offeremployeestheopportunityforhealthriskassessment

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What employee benefits does your

company currently offer?Health Insurance - 95.2%

Dental Insurance - 90.4%

Vacation Time - 88.8%

Paid Holidays - 87.6%

Life Insurance - 84%

Disability Insurance - 77.2%

Retirement Benefits - 75.6%

Wellness Program - 53.6%

Tuition Reimbursement - 52%

EAPs - 48.8%

Domestic Partner Benefits - 39.2%

Parking - 24%

Recreational Facilities - 12.4%

Only Mandated Benefits - 12.4%

Other - 12.4%

Automobile - 9.2%

Meals - 7.6%

Hazard Pay - 5.2%

Which of the following describes your company’s

current employee health benefits program?Employee + Dependents - 80.8%

PPO - 70.8%

Prescription Drug - 66.8%

Mental Health - 45.6%

HMO - 36.8%

Employee-only - 36.4%

HDHP/HSA - 28%

Retiree to former employees - 19.6%

Self-Insured - 17.6%

Catastrophic - 11.6%

Underwritten by Insurer - 6.8%

Indemnity - 6%

None - 3.6%

Other - 2.4%

Mini Med - 1.2%Figure1.2(findingsonnextpage)

Figure1.1(findingsonnextpage)

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a Findings: Figure 1.1• Healthinsuranceisthemostcommontypeofemployeebenefitofferedtoday

with95.2%ofrespondentsreportingtheircompanycurrentlyoffersit• Dentalinsurance(90.4%),vacationtime(88.8%),andpaidholidays(87.6%)

arethenextmostfrequentlyoffered• Accordingtorespondents,lessthan10%ofcompaniesofferautomobile(9.2%),

meals(7.6%),orhazardpay(5.2%)

Findings: Figure 1.2

• Themajorityoftheemployeehealthbenefitprogramsofferedbyrespondents’companiesincludeemployee+dependents(80.8%),PPO(70.8%),prescriptiondrug(66.8%),andmentalhealth(45.6%)

• Lesscommonemployeehealthbenefitsincludeindemnity(6%),andminimed(1.2%)

• 3.6%ofthosesurveyedreportedtheircompaniesofferednoemployeehealthbenefits

Insights:

Health insurance leads the list of employee benefits, signifying its importance to today’s workforce. The fact that the most common health ben-efits offered are PPO “family” plans that cover Rx drugs and mental health suggest that the companies surveyed offer the kind of benefit-rich coverage many Americans have come to expect from their group health plan.

Will employers of any size offer a rich level of coverage in the fu-ture? This is just one of the questions being asked in the midst of healthcare reform. Other questions are: How will the costs of healthcare change over time? As more costs are shifted to the consumer and away from the employer or insurer, how will plan designs change?

Many experts believe that in order to continue offering healthcare benefits in an economy of rising costs, more companies will begin offering consumer-driven health plan options such as Health Savings Account pro-grams, which couple a high-deductible health plan with an HSA. These plans tend to have lower monthly premiums and are designed to give people more control over their healthcare savings. They are also ideal for use in a defined contribution health plan benefit model, embraced by companies looking to control their costs while still providing the important health coverage their employees value and need.

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Findings:• Ofthosewhosecompaniesofferedemployeehealthbenefits,amajority

(35.2%)oftherespondentsindicatedtheircompanyoffersthreeormoredifferentgrouphealthinsuranceplanoptions

• 34%reportingonlyofferingonegrouphealthplanoption,whileslightlyless(30.8%)offeredtwohealthplanoptions

Insights:

The survey results show an almost even spread in the numbers of health insurance plan options offered by respondents’ companies: 1, 2, or 3 or more. Employees of companies offering three or more different plans may, for instance, have their choice of a PPO plan, HMO plan, and or a high-deductible health plan—and they’ll take their anticipated healthcare needs, provider network(s), and budgets into account while making their selection.

One of the goals of the ACA is to ensure Americans have choice with respect to how they pay their share of healthcare costs. The health plans on the Health Insurance Marketplace for individuals are categorized based on monthly premium and out-of-pocket costs; the plans on private exchanges are also evaluated based on coverage and price comparisons. By putting health insurance into a consumer marketplace where people compare plan benefits and prices—and as healthcare costs shift to the consumer—it’s likely employers may move toward the addition of options, increased flexibility, and employee choice while designing healthcare benefits.

How many different group health insurance

plan options do you give employees?

3 or more - 35.2%

2 - 34%

No - 30.8%

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Findings:• 58.5%ofrespondentsreportedtheircompanieshavenotyetputintoeffectany

newbusinesspracticesregardinghealthorothercompanybenefitsduetotheAffordableCareAct

• 41.2%ofrespondentsreportedtheircompanieshadputnewbusinesspracticesinplaceinresponsetotheACA

Insights:

These findings indicate that businesses are at different stages along the ACA learning curve, making decisions and implementing changes as they’re ready. While a few of the employer-related ACA provisions have already taken effect, such as the requirement to notify employees of the new health insurance marketplace, others have yet to take center stage.

Some companies may have gotten a head start by preparing to meet the terms of the Wellness Regulations of the ACA, which becomes effective in 2014. Employers are permitted to offer employees rewards of up to 30% (it was previously 20%) of the cost of participating in a wellness program and meeting certain health-related standards.

Another of the key ACA provisions many employers have started to contemplate is the “Play or Pay” mandate. Beginning in 2015, the ACA will assess a $2,000 fee per full-time employee, excluding the first 30 employees, on employers with more than 50 employees that don’t offer coverage and have at least one full-time employee receiving a premium tax credit. Many businesses have already begun to prepare to comply with the health insurance coverage reporting requirements associated with this regulation.

Additionally, employers will need to determine if their insurance plans meet the federal definitions of “affordable” and “minimum value.” Some businesses may have a “wait and see” attitude and still consider what steps to take—or what business practices they’ll have to change—in order to maintain compliance with ACA.

Yes - 41.2%

No - 58.5%

Has your company put any new business

practices into effect regarding health plan

benefits or other company benefits due

to the Affordable Care Act?

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Findings:• Respondentsindicatedhealthcarereformwillimpacttheiremployeebenefitspackagesbyincreasingemployee

cost-sharing(38.4%)andincreasingpremiumcontributions(33.6%)• Only6%indicatedreformwouldnarrowtheirnetworksofhospitalsandphysicians• Lessthan5%(3.2%)indicateditwouldshifttheircompanytowardsdefinedcontributionplans(DCP)

Insights:

While it remains to be seen how healthcare reform will affect the cost of employer-sponsored health benefits, these findings indicate that employers recognize the impact of rising healthcare costs on their benefits package—whether they are taking on an additional financial burden or passing the costs along to employees. Based on the ACA mandates already in effect, reform efforts are generally mandating that plans offer “richer” coverage, and richer coverage is more expensive.

Both a plan’s design and cost-sharing structure can make a big difference to employers and employees alike. Even if employers choose to shift a larger share of healthcare costs to employees by moving to more consumer-driven high deductible plans, they can enable employees to better plan for their healthcare utilization and savings, or at least give them the tools they need to make the most of their coverage. Wellness and other healthy lifestyle programs including smoking cessation or disease management can also help promote efficient use of health care and spending.

How will healthcare reform impact your

employee benefits package?

Increase employee cost-sharing - 38.4%

Increase our premium contributions - 33.6%

Other - 28.4%

Enhance wellness, preventative health programs - 22.4%

Adopt new wellness, preventative health programs - 12.8%

Reduce covered benefits - 12.4%

Introduce HDHPs/CDHPs - 8.4%

Narrow networks of hospitals & physicians - 6%

Shift to defined contribution plans (DCP) - 3.2%

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Findings:• Themajorityofrespondents(64.8%)indicatedhealthbenefitsofferingswere

veryimportantforretainingandattractingemployees,whileonly1.6%felttheywerenotimportant

• Inaddition,morethanhalfofrespondentsindicatedhealthbenefitswereveryimportanttowardsimprovingemployeemoraleandsatisfaction(56.6%)andimprovingemployeehealth,reducingabsenteeism,andimprovingproductivity(52%)

Insights:

Half of the respondents, at the very least, find it important to match the competition on healthcare benefit offerings. This suggests that moving forward, they’ll continue to offer health benefits that have value to employees and prospective employees.

How important are your health benefits

offerings to...

5 - Very important

4

3 - Important

2

1 - Not important

Retain and attract quality employees – 4.48 Avg. Rating

Improve employee morale and satisfaction – 4.34 Avg. Rating

Improve employee health, reduce absenteeism, improve productivity – 4.215 Avg. Rating

Match competition – 4.16 Avg. Rating

64.8%22.5%7.8%3.3%

1.6%

56.6%28.7%11.5%

1.6%1.6%

52%27.9%14.8%3.3%

2%

50%27.1%16.2%2.9%3.8%

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Findings:• Themajorityofrespondents(59.4%)indicatedtheyweresomewhatto

veryfamiliarwithDefinedContributionPlans(DCPs)astheyrelatetohealthbenefits

• 40.6%ofrespondentsindicatedtheywerenotfamiliarwithDCPsastheyrelatetohealthbenefits

Insights:

Defined Contribution Plans began as retirement accounts for retiring employees. Throughout the years, large companies began to adopt the DCP model to allow all employees to pick and choose the benefits most important to them. Employers of all sizes are learning that DCPs provide employees with a specific dollar amount toward health insurance and a private exchange on which to shop for their benefits. Employees who want more benefit-rich health plans or additional health options contribute more based on their selections.

5 - Very familiar

4

3 - Familiar

2

1 - Not familiar

40.6%

How familiar are you with Defined

Contribution Health Benefit Plans?

13.9% 16.8% 12.7% 16%

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Findings:• Ofthoserespondentswhoindicatedtheyweresomewhat–veryfamiliarwith

DCPs,amajority(54.1%)indicatedofferingaDCPwouldhelpemployeesmakemorecost-consciousbenefitdecisions.Furthermore,40.5%oftheserespondentsindicatedthataDCPofferingwouldalsoleadtoincreasedemployeeunderstandingofbenefitcosts

• Allowingthecompanytocontinueofferingbenefitsotherwiseinjeopardyandleadingtolowerhealthbenefitscostsforthecompanywerereportedwiththesamefrequency(31.5%)

Insights:

Employers interested in DCPs understand the value that their companies receive if they were to provide a fixed dollar amount toward health coverage. A well-run private exchange will provide numerous health plan options with several network and prescription drug networks from where their employees can choose. Containing healthcare costs remains paramount to companies, but as the findings indicate, so does involving the employee in the process to help ensure positive healthcare outcomes that are mutually beneficial to both employers and employees.

Do you think offering a defined

contribution plan (DCP) would:

Help employees make more cost-conscious benefit decisions - 54.1%

Lead to better employee understanding of benefit costs - 40.5%

Offer a wider array of options for benefit plans - 39.6%

Allow continued health benefits otherwise in jeopardy - 31.5%

Lead to lower health benefit costs for the organization - 31.5%

Allow less focus on benefit selection and more on employee value - 28.8%

Other - 10.8%

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Findings:• Themajorityofrespondents(36.1%)indicatedtheywereconsideringDCPs

forthefuturewhilejustmorethanaquarter(25.2%)indicatedtheywerenotinterestedonadoptingDCPs

Insights:

With about 56% of respondents interested in learning about and considering DCPs for the future indicates that each year more and more companies will begin using DCPs as a means for their employees to choose and enroll in the health benefits most important to them. This insight is supported by the fact about 94% of the employers surveyed currently offer health insurance and 65% are committed to providing health insurance to attract and retain employees. And yet, the average cost of health coverage is about $10,000 per employee. Therefore, controlling these costs through a DCP may provide the solution many employers turn to in the near future.

Where are you in the process of exploring/

adopting defined contribution plans?

Considering for future - 36.1%

Not interested - 25.2%

Still learning - 18.9%

Already using - 14.4%

Other - 5.4%

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(DC

PS)

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Findings: • OfthoserespondentswhoindicatedtheywereinterestedinDCPsfor

thefuture,55.8%reportedtheywereconsideringfor2015followedby26.9%in2016

• Only17.3%indicatedconsideringDCPsbeforetheendof2014

Insights:

As large employers gear up for the ACA 2015 mandates, foremost in their minds is the $2,000 per full-time employee penalty for not providing health coverage to their employees. Instead of dropping coverage and facing a government penalty, employers may view DCPs as a way to continue giving their employees this benefit and keeping their businesses’ competitive edge in hiring and retaining talent. Providing a DCP would also allow companies to receive numerous tax benefits from offering health coverage.

If considering exploring/adopting

defined contribution plans (DCPs) for

the future, when?

2015 - 55.8%

2016 - 26.9%

2014 - 17.3%

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What partners would you depend on to

help you learn about new health benefit

designs such as defined contribution plans?

Insurance Broker - 46.2%

Benefit Consultant - 45.3%

Will do research independently - 44.9%

Insurance Carrier - 23.7%

TPA (Third Party Administrator) - 19.1%

Industry/Trade Association - 17.8%

Payroll Co. - 7.2%

Other - 5.1%

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What information would your company

be looking for regarding new health

benefit designs, such as defined

contribution plans?

How would our company benefit from DCP? - 27.6%

What are DCPs? - 25.7%

Do employees like DCPs? - 19.1%

What other health plan designs are available? - 15.8%

Other - 9.2%

Can our company offer a DCP plan under PPACA? - 2.6%



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Findings: Figure 2.1• Insurancebrokers(46.2%)andbenefitconsultants(45.3%)werethetoptwo

externalpartnersrespondentsreportedtheywoulddependontolearnaboutnewhealthbenefitoptionsandDCPs

• 44.9%ofrespondentsreportedtheywoulddotheresearchindependently• Payrollcompanies(7.2%)aretheleastusedresourceforlearningaboutthe

latesthealthbenefitplandesigns

Findings: Figure 2.2• Ofthoseinterestedinlearningmoreaboutnewhealthbenefitdesigns,the

topinformationsoughtoutbyrespondentsincludedhowthecompanywouldbenefitfromaDCP(27.6%)andmoreinformationaboutfundamentalsofDCPofferings(25.7%)

• Only2.6%indicatedwantingtoknowmoreaboutwhetherornottheircompanycouldofferaDCPunderthePPACA

Insights:

Over time, outreach and educational efforts by insurance brokers and benefit consultants at least initially, have the potential to significantly impact company decision-makers. These two groups as well as online tools will need to match the changing needs of employers as they begin the process of considering DCPs and then move to more sophisticated customers of private exchanges.

In light of the ACA mandates, employers are also looking at ways to continue providing benefits and control their healthcare costs. Relevant information that provides cost-saving business solutions that employers can implement in their companies, make the deliverer a valuable asset in this new world of healthcare reform.

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Findings:• 62.1%somewhattoveryfamiliarwithpublicexchangesand54.5%somewhat

toveryfamiliarwithPrivateexchanges• Overallrespondentswerelessfamiliarwithprivateexchanges(45.5%)than

publicexchanges(37.9%)

Insights:

The recent October 1 launch of the public and state exchanges and the subsequent media coverage of the online process has promoted familiarity with the term “public insurance exchanges.” The public exchanges are designed initially only for individuals to purchase coverage. As most employers surveyed provide group coverage for their employees, the awareness of the public exchange may not be as important to these respondents. Additionally, because DCPs are just starting to gain ground among employer groups, awareness of private exchanges is expected to grow in correlation with DCP use in companies.

How familiar are you with public and

private healthcare exchanges?

Public

Private

37.9%

45.5%

5 - Very familiar

4

3 - Familiar

2

1 - Not familiar

12.3% 20.4% 14.5% 14.9%

11.7% 18.6% 10.8% 13.4%

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Findings:• Almosthalf(47.2%)ofrespondentsindicatedtheyarenotinterestedin

anexchangetypemodelforhealthcarebenefits• Stilllearningaccountedfor23.4%ofresponses,whileonly6.4%reportedthey

werealreadyusinganexchangetypemodelfortheirhealthcarebenefits

Insights:

Education of DCPs and private exchange models will continue to play a large role as to their adoption rate in companies. As the findings indicate, private exchanges have the potential for enormous growth in the coming years. Private exchanges are new avenues that employers will need to fully explore in order to make informed decisions for their companies. Due to the tax incentives offered to smaller companies through the Small Business Health Options Program (SHOP), many smaller businesses may find this program beneficial as an alternative to private exchanges.

Where are you in the process of offering

an exchange type model for healthcare

benefits (individual or group policies)?

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Not interested - 47.2%


Considering for future - 17%


Other - 6%

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Findings:• Halfofrespondentsinterestedinanexchangetypemodelforhealthcare

benefitsindicatedtheywouldconsiderofferingin2015• Theotherhalfofrespondentswerecloselysplitonwhethertheywouldoffer

in2014(26.9%)orwaituntil2016(23.1%)

Insights:

In 2015, ACA provisions will regulate a penalty for companies, with 100 or more full-time employees, who do not offer coverage pointing to an interest in private exchanges in 2015.

If considering offering an exchange type

model for healthcare benefits, when?

2013 - 50%

2014 - 26.9%

2016 - 23.1%

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Findings:• Oftherespondentsindicatingtheyweresomewhattoveryfamiliarwith

exchanges,morethanhalf(51.3%)indicatedtheybelievedexchangeswillhelpemployeesmakemorecost-consciousbenefitdecisionsaswellasofferawiderarrayofoptionsforbenefitplans

• Allowingforemployeestofocuslessonbenefitselectionandmoreonemployeevaluewastheleastpopularresponsewith16.3%

Insights:

Of the respondents familiar with private exchanges, more than half believe exchanges will have the ability to make an impact on cost and options. Healthcare plan affordability and options are two of the main goals of the healthcare reform and show a correlation with employer’s beliefs about exchanges. These findings are also consistent with employers’ understanding of the benefits associated with DCPs. As employers look to implement cost-saving measures within their organizations, they will rely on mechanisms that increase employees’ knowledge and awareness regarding benefit costs.

Do you think private exchanges will:

Help employees make more cost-conscious benefit decisions - 51.3%

Offer a wider array of options for benefit plans - 51.3%

Lead to better employee understanding of benefit costs - 43.8%

Allow employers to continue offering benefits that would otherwise be in jeopardy - 36.3%

Lead to lower health benefit costs for organization - 23.8%

Allow employees to focus less on benefit selection and more on employee value - 16.3%

Other - 12.5%

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Findings: • COBRAComplianceisindicatedtobetheattributethatmostrespondents(35.3%)

felttobeveryimportanttoofferinghealthplansinanexchangeenvironment• Carrierintegration(33.6%)andhealthspendingaccounts(33%)werealso

indicatedtobeattributesfelttobeveryimportant• Themajorityofrespondents(9.5%)indicatedpayrollprocessingtonotbean

importantattribute

Insights:

Results indicate that employers are looking for an exchange environment to provide many value-added services. Employers list COBRA compliance, integration with health spending accounts and carriers, premium payment automation and payroll processing all to be important attributes for working with a private exchange. Streamlining these processes has equal appeal to small and large businesses, and demonstrates a desire for simplified employer administration of benefits.

Please rank the attributes you would

value in offering health plans in an

“exchange” environment:

Carrier Integration – 3.83 Avg. Rating

Payroll Processing – 3.57 Avg. Rating

Premium Payment Automation – 3.69 Avg. Rating

Health Spending Accounts (e.g. Health Savings /Flexible Spending) – 3.76 Avg. Rating

33.6%

26.7%

29.2%

33%

COBRA Compliance – 3.71 Avg. Rating

35.3%

5 - Very important

4

3 - Important

2

1 - Not important

29.3%23.3%6.9%6.9%

27.6%29.3%6.9%9.5%

32%24.8%6.2%7.1%

25.2%26.9%8.4%6.7%

21.8%25.2%10.1%7.6%

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Findings:• Mostrespondents(84.9%)arelookingforplanandcostcomparisontoolsina

benefitofferingwithinaninsuranceexchangeenvironment• Onlineaccess(76.2%)andcombinedbenefitenrollment(61.1%)arealso

featuresrespondentswanttoseeincluded• Theleastselectedfeaturewasprogressivecosttrackingtools(27%)

Insights:

Employers are requesting a comprehensive platform to provide employees with tools to help them make knowledgeable decisions and engage them in the healthcare process. The high percentage of employers seeking online access for their employees also suggests ease of use is a priority for handling enrollment and questions.

If you choose or could design a benefit

offering using an insurance exchange

environment, what features would

you include?

Plan and cost comparison tools - 84.9%

Online access - 76.2%

Combined benefit enrollment - 61.1%

Help line - 56.3%

Consolidated employer billing services - 47.6%

Financial account options - 36.5%

Progressive cost tracking tools - 27%

Other - 4%

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Findings:• Themajorityofrespondents(53.2%)indicatedtheywouldresearchprivate

exchangesindependentlywhilegoingthroughaninsurancebroker(53.2%)orbenefitconsultant(48.4%)werealsopopularselections

• Only5.6%indicatedtheywouldgothroughapayrollcompany

Insights:

Employers are looking for reliable resources to help them navigate this new system of healthcare. The response to this question is similar as to how employers would like to get information regarding DCPs. They are willing to do their own research, but are also looking to their broker or benefit consultant to provide insight and recommendations that make sense for their business. Opportunities exist for brokers to become health program experts to get their foot in employers’ doors, and to share their knowledge through reliable online resources for those employers searching independently.

What partners will you depend on to

help you learn about private exchanges?

Will do research independently - 53.2%

Insurance Broker - 53.2%

Benefit Consultant - 48.4%

Industry/Trade Association - 30.2%

Insurance Carrier - 26.2%

TPA (third party administrator) - 19%

Payroll Company - 5.6%

Other - 5.6%

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Findings:• 43.9%ofcompaniessurveyedarealreadyusingsomekindofhealthylifestyle

incentive/program,while22.6%areconsideringforthefuture• Thesmallestmajority(15.2%)indicatedtheyarenotinterestedinadoptinga

healthlifestyleincentiveprogram

Insights:

Companies have long had an interest in keeping their workers healthy, productive, and satisfied while cutting healthcare costs. Wellness programs encourage employees to take measures to lead healthier lifestyles and prevent possible future diseases. Employers responding positively to implementing healthy lifestyle programs have made the correlation between influencing employees to adopt healthier lifestyles and a reduction in employee healthcare costs.

Where are you in the process of

exploring/adopting a healthy lifestyle

incentive/program?


Considering for future - 22.6%


Not Interested - 15.2%

Other - 2.6%

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Findings:• Ofthoseofferingwellnessprogramsorservices,74.5%offerflushotsor

vaccinations,69.4%offeranEmployeeAssistanceProgram(EAP),and54.6%offergymmembershipdiscountsoron-siteexercisefacilities

• Only4.2%ofcompaniessurveyeddon’tofferanywellnessprogramsorservices

Insights:

Major pharmacy chains in conjunction with health plans have provided more training for vaccination administration than ever before. Employers have demonstrated in part why this may be the case, listing it as their top wellness service for employees. Nearly 70% of employers also demonstrated that they understand the importance of providing a culture that supports its healthy lifestyle program with almost 70% of them noting that they have an Employee Assistance Program in place to help workers with a variety of work/life balance challenges.

What specific wellness programs/

services do you offer employees?

Flu shot or vaccinations - 74.5%

Employee assistance program (EAP) - 69.4%

gym membership discounts or on-site exercise facilities - 54.6%

Smoking cessation program - 44.9%

Web-based resources for healthy living - 43.5

Weight loss program - 38%

Biometric screening - 31.5%

Other - 5.1%

None - 4.2%

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Findings: • Topromotepositivehealthoutcomes,61%ofcompaniesofferatleastone

wellnessprogramand43%offeremployeestheopportunityforhealthriskassessment

• Offeringadiseasemanagementprogramwastheleastpopularwayemployerschosetopromotepositivehealthwith23.3%

Insights:

The Affordable Care Act incentives for 2014 recognize the link between company wellness initiatives and lowering healthcare costs. The Affordable Care Act creates new incentives and builds on existing wellness program policies to promote employer wellness programs and encourage opportunities to support healthier workplaces. The proposed rules also implement changes in the ACA that increase the maximum permissible reward under a health-contingent wellness program from 20% to 30% of the cost of health coverage, and that further increase the maximum reward to as much as 50% for programs designed to prevent or reduce tobacco use. As employers will continue to be encouraged to provide wellness programs to their employees, an increase in positive health outcomes should be experienced by more and more organizations.

How do you promote positive health

outcomes at your company?

Offer at least one wellness program - 61%

Opportunity for health risk assessment - 43%

Provide incentives/rewards for certain health-related tasks - 36.8%

Biometric screening - 28.3%

Nothing at this time - 26.9%

Offer at least one disease management program - 23.3%

Other - 4.5%

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Other - 18.9%

Manufacturing - 15%

Government - 11%

Technology - 10.6%

Education - 10.1%

Finance & Insurance - 8.8%

Healthcare - 7.5%

Non-profit - 7.5%

Retail goods & Services - 4.4%

Construction - 4.4%

Travel & Entertainment - 1.8%

101-1000 - 33.6%

>2,501 - 22.7%

<50 - 22.7%

1001-2500 - 10.9%

51-100 - 10%

Approximately how many full-time

employees are in your company/

organization?

What industry is your company in?

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Survey Summary/Conclusion • Ongoingcostconcernsamongemployersofallsizeswillcontinuetospur

changebothintheformofdefinedcontributionplansandtheuseofhealthinsuranceexchanges

• MostemployersareinterestedinlearningmoreaboutDCPsforthefuturesupportingtheshiftawayfromatraditionaldefinedbenefitmodeltomanageemployeehealthcarebenefitsandcontrolcosts

• Overall,employersaremorefamiliarwithpublicexchangesthanprivateexchanges.ThismaybeduetotheOctober1launchoftheFederalInsuranceMarketplace,whichcoincidedwithsurveydatacollection.Asmostemployerssurveyedprovidegroupcoverage,theawarenessofpublicexchangesmaynotbeasimportanttotheserespondents

• BecauseDCPsarestartingtogaingroundamongemployergroups,awarenessofprivateexchangesisexpectedtogrowincorrelationwithDCPuseincompanies

• WecanexpectanincreaseinthenumberofcompaniesofferingatleastonewellnessprogramorhealthinitiativeasACAwellnessincentivesgointoeffectin2014

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About the Healthcare Trends Institute

The Healthcare Trends Institute is an educational platform to help employers, third-party administrators, health plans, brokers, banks, payroll providers, consumers, and other stakeholders keep up with the rapidly changing healthcare benefits industry. It covers a range of topics related to the administration and management of healthcare benefits. To ensure all content and programs achieve the highest level of quality and relevancy, the Institute is guided by an Editorial Advisory Board comprised of subject-matter experts that represent diverse aspects and perspectives within the healthcare benefits industry. More information is available at www.healthcaretrendsinstitute.org

Tiffany Wirth, Executive Director

Healthcare Trends Institute

4324 20th Avenue, SW, Ste. 200

Fargo, ND 58103

P 701.499.7215

E [email protected]

SPONSORED By:

The Healthcare Trends Institute is sponsored by Evolution1, the nation’s largest electronic payment, on-premise and

cloud computing healthcare solution. But we don’t do it alone. Our network of 500 Partner organizations enables us

to deliver our industry-leading solution to 80,000 employer groups and 9.5 million consumers across the country.

Together we take the complexity out of defined contribution, HSAs, HRAs, FSAs, VEBAs, PRAs, wellness plans and transit

plans. Created with users in mind, our solutions provide a single end-to-end intuitive user experience that reduces costs,

saves time and ultimately simplifies the business of healthcare. In keeping with its mission of simplifying the business

of healthcare, Evolution1 launched the Healthcare Trends Institute to provide accurate and up-to-date information

on the issues surrounding healthcare and employee benefits today.

2013 healthcare benefits trends study

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