During the upcoming enrollment period, employers will still experience cost shifts to employees, consolidate plan choices, emphasize account-based plans and require more on employees if they are to receive incentives, according to a survey by Towers Watson.
"Unlike the last few years when many employees saw significant increases in copayments, deductibles and coinsurance, 2012 looks like a year when we will start to see costs go up primarily via increased premium contributions, with a higher proportion of the increase being borne by families," says Randall Abbott, senior health care consultant at Towers Watson. "Employers are becoming increasingly focused on raising the cost for dependents to capture the added expense and to encourage working spouses to shift to their own employer's plan. We also expect more use of spousal surcharges when they fail to do so."
In 2012, the annual cost of medical and pharmacy coverage is expected to increase to $11,204 per employee for active coverage, for a growth of 5.9 percent, compared to 7.6 percent in 2011, the survey finds. Sixty-six percent of respondents plan to increase employees' share-of-premium contributions for single-only coverage for 2012 while 73 percent anticipate increasing them for dependent coverage.
Recommended For You
"Most employees can expect only nominal point-of-care cost increases in 2012, except for those migrating to account-based plans, who might see lower premium costs but assume a greater share of costs in the form of higher deductibles," Abbott says.
The survey also reveals that employers are still consolidating plan choices and implementing account-based plans at a high rate. Fifty-seven percent of large employers plan to provide this option, meaning employees must understand the advantages and limitations of high-deductible plans and health savings accounts. This will require employees to pay more for brand-name drugs and only grant access to specialty drugs through prior authorization and participation in alternative therapies.
"We expect to see continued changes in the prescription drug arena, with employers encouraging even greater use of generics and implementing more rules around prior authorization of certain drugs," says Nadina Rosier, national pharmacy director at Towers Watson. "Employees may also find increased copayment differences between generics and brand-name drugs as employers seek to encourage patients to take advantage of several blockbuster drugs coming off patent in the coming months."
Wellness program and health assessment incentives are still popular; however, employees must put in a greater effort to get the same level of incentive awards. Though the number is small, more employers are requiring both health assessments and biometric screenings as part of plan participation, the survey finds, and those who decline the screenings have a higher premium or more limited plan choices.
"Employers will keep their focus on improving worker health and driving employees to consider the cost of care in 2012," Abbott says. "As a result, we expect more companies to link benefits with individual employee behaviors and benefit decisions, requiring employees to be more accountable for their own choices. Employees who make smart decisions about their health care providers and prescription medications will be able to boost employer subsidies and incentives."
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
