Employers Holding the Line on Health Care – for Now

March 24, 2010 (PLANSPONSOR.com) – Employers weren’t inclined to make many changes in their health care programs in 2010, but employees were asked to pick up a larger share, according to a new survey.

According to the Wells Fargo Benefits Marketplace Survey, 84% of employers remained with their current medical carrier, and nearly three-quarters (71%) made no revisions to their prescription plan and 97% made no reductions to their dental plan. The most common strategy used was to ask employees to pay more via the medical plan design (46%), or to absorb a greater percentage of the costs, through payroll deductions (41%), according to the survey of more than 320 employers of different sizes and from different industries nationwide.  The survey found that just over a quarter of respondents made no changes to their plan design, funding, insurance carrier, plan offerings or contribution percentage.

The survey also showed that consumer-directed health plans (CDHPs) continue to increase in adoption, albeit modestly.  Another 4% of employers added a Health Savings Account (HSA) plan, while 3% added a Health Reimbursement Account (HRA) plan, bringing the total of employers offering a CDHP to 31%, according to the report.  Another 8% indicated they plan to offer a CDHP in 2011.

Wellness Rises

Other findings showed that employers continued to implement wellness programs, with smoking cessation, weight management and biometric screening programs the most common programs added in 2010. Connecting participation in a wellness program with financial incentives was also popular, according to the report.  Among employers that added a wellness program for 2010, 59% offered an incentive to participate. Employers in the Southeast (84%) and Midwest (71%) offered the highest level of wellness incentives.

Disease management programs also are offered widely, according to the report, with diabetes, coronary artery disease and asthma being the most common programs added for 2010. Employers also adopted financial incentives (43%) more widely than they did a year ago.

The survey’s authors note that as employers look to trim their overall benefit budgets, voluntary benefit plans continue to gain in popularity. Of those employers that offered at least one new voluntary program, 50% offered two or more. The most common combinations among these products are accident, cancer, and critical illness benefits, with 27% of employers adding them.

Lastly, despite the topic of healthcare reform dominating as a yearlong discussion, most employers took a “wait and see” approach.  Nearly all (92%) of employers took no action to better align themselves in the event legislation were to be passed in 2010.

The survey — published by Wells Fargo Insurance Services — was conducted during five-weeks in December 2009 and January 2010 and gathered information on decisions employers made about benefit programs for 2010.