Employees to be faced with Plenty of Benefits Changes

October 5, 2005 (PLANSPONSOR.com) - Workers will find one thing familiar when they turn their attention to next year's benefits registration - employers are once again shifting health-care cost hikes onto the employees.

But, many things are likely to be different, according to a Watson Wyatt news release on their study for this year’s open benefits enrollment season.

“With many employers once again passing rising health care costs to their workers, open enrollment season has become more than simply a process of checking off which benefits employees would like for the following year,” Tom Billet, a senior consultant with Watson Wyatt, said in the news release. “We are seeing a rapid acceleration in many of the changes that employers started to make to their plans last year. Employees will need to carefully evaluate each of the options they have to ensure they are making the best decisions for themselves and their families.”

According to Watson Wyatt, six trends that should be evident during the 2005 enrollment season include:

  • A growing number of employers are designing their health benefit plans to emphasize first-dollar cost sharing. For many employees, that means they will no longer pay $15-$25 in co-payments when they visit their doctor or hospital. Instead, employees will be responsible for medical expenses up to a deductible level, at which point the employer will cover generally 80% of the costs with the employee responsible for the balance.
  • Many employers are scrapping prescription drug benefit plans that require co-payments for generic and brand-name drugs and replacing them with plans that require co-insurance and deductibles. Employers are also continuing to encourage workers to use generic drugs when available by providing better co-insurance provisions for generics. More employers are implementing mandatory 90-day mail order programs for maintenance drugs.
  • As employers increasingly involve workers in decision making, more of them are adding high-deductible health plans as well as personal account plans, including Health Savings Accounts (HSAs) and Health Reimbursement Accounts (HRAs).
  • Many employers are offering workers financial incentives to complete a health risk assessment and participate in wellness programs. Recognizing the need to help workers focus on ways to promote a healthy lifestyle, employers are hoping to encourage them to participate in disease management programs aimed at better managing chronic illnesses.
  • More companies are providing employees with tools to help them make informed health choices. Some tools show the dollar impact of the various health plan options; others help employees determine how much to contribute to a flexible spending account, check the status of claims, track down information on medical specialists, create personal health records and find Web sites with health information on specific diseases and wellness topics.
  • New drug choices for older workers, retirees. With the new Medicare prescription program set to begin in 2006, Medicare-eligible retirees will be flooded with information about the program at the same time that open
    enrollment is occurring. Retirees should not enroll in Medicare D until they understand the options available through their former employer and other available options. Some employers may change their program options
    depending on whether they take a federal subsidy available through the new program.