Benefits March 8, 2001

Despite Rising Health Costs, Employers Stay Involved

March 8, 2001 (PLANSPONSOR.com) - Most large employers plan to maintain a central role in providing healthcare to their employees despite rising costs, but they may do so in different ways, according to a new study.

Reported by

Nevin E. Adams

According to the Sixth Annual Purchasing Value in Health Care Survey, more than 75% of employers will stay involved in health plan design and vendor selection, while nearly two-thirds (65%) will remain involved in pricing of options and providing information to employees about their plan choices.

Net Difference

Eighty percent of survey respondents plan to make more use of the Internet in administering and distributing health plan information, including:

92% – provide employees information on plan choices
87% – annual enrollment
83% – help employees navigate delivery system
81% – health promotion & wellness
81% – educate employees about self care
76% – plan administration.

Overall health care costs increased 10.3% this year, with the cost of prescription drugs topping the list with a 14.6% increase. Roughly 70% of employers will deal with these cost increases by increasing employee premiums, while half will increase employee co-payments. Still, about half will absorb at least some of the increase, and just 14% plan to reduce or eliminate coverage.

The study also found:

Eight in 10 are looking to improve employer/employee benefits communications to improve employee satisfaction over the next year. Fifty-five percent hope to improve online plan information and transaction processing.

One in five plan to move toward more aggressive managed care – while a like number are planning to use less aggressive managed care

The survey represents the experience of 360 employers covering 4.7 million full-time employees, and was conducted by Watson Wyatt Worldwide, the Washington Business Group on Health and the Healthcare Financial Management Association.