Most large employers will make changes to their health benefits next year to comply with health care reform and to manage anticipated cost increases.
The survey from the National Business Group on Health was conducted before the Department of Health and Human Services issued final rules in June on grandfathered health plans. The nonprofit organization surveyed 72 of the nation's largest corporations.
Although wary of making too many changes, more than half (53 percent) of employers will revise their benefit plans; one-fifth are scaling back the changes they had planned and the same amount aren't changing anything.
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Health care reform passed this spring includes several provisions that will take effect on Sept. 23. Those included mandates to eliminate lifetime coverage limits and restrictions on annual limits. The law also prohibits insurance companies from deny coverage to children with pre-existing conditions.
To comply with the new law, 70 percent said they will remove lifetime dollar limits on overall benefits while 37 percent reported they will make changes to annual or lifetime limits on specific benefits. About one in four (26 percent) will remove annual dollar limits on overall benefits. Thirteen percent will remove pre-existing condition exclusions for children.
Managing costs
Compliance issues aside, employers are making changes mainly to deal with surging benefits costs, according to the survey.
Employers estimate their health care benefit costs will increase an average of 8.9 percent next year, compared with an average increase of 7 percent this year. To offset this, 63 percent plan to increase the percentage employees contribute to the premium, up from 57 percent who did so this year, while 46 percent plan to raise out-of-pocket maximums next year compared with 36 percent this year.
Employers will also raise the co-pay/co-insurance for retail pharmacy (25 percent) and mail-order pharmacy (21 percent) to help manage the rising costs of pharmaceuticals.
Employers said there are some other tactics they believe will be effective in controlling costs, including offering a consumer-directed health plan (21 percent), followed by wellness initiatives (20 percent), and increased employee cost-sharing (17 percent).
A big shift to CDHC
Six in 10 employers will offer a consumer-directed health plan in 2011. A high deductible plan with a health savings account is the most common, but the survey found a big spike in employers moving to a full replacement plan.
Among employers offering a CDHP, the number moving to a full replacement plan doubled from 10 percent this year to 20 percent in 2011.
Other findings:
- With the health reform law making Medicare Part D benefits richer as the doughnut hole closes between now and 2020, 5 percent of employers plan to drop retiree health coverage in 2011 while 60 percent are considering doing so in the future.
- 41 percent of employers offered premium discounts for completing health assessments while 22 percent offered premium discounts for participating in tobacco cessation programs.
- 25 percent of employers plan to raise the co-pay or co-insurance for retail pharmacy prescription drug benefits while 21 percent plan to do the same for mail-order pharmacy benefits.
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