Survey Finds Stability in Employer-Sponsored Health Benefits
Similar percentages of employers offered benefits to at least some employees, and a similar percentage of workers at those firms were covered by benefits compared to last year. Family premiums increased at a modest rate and single premiums are not statistically different than those reported last year. On average, covered workers contribute the same percentage of the premium for single and family coverage as they did last year.
Fifty-five percent of firms offer health benefits to their workers, statistically unchanged from 57% last year and 61% in 2012, according to the Kaiser Family Foundation’s 2014 Employer Health Benefits Survey. The likelihood of offering health benefits differs significantly by size of firm, with only 44% of employers with three to nine workers offering coverage, but virtually all employers with 1,000 or more workers offering coverage to at least some of their employees. Ninety percent of workers are in a firm that offers health benefits to at least some of its employees, similar to 2013 (90%). Offer rates also differ by other firm characteristics; 53% of firms with relatively fewer younger workers (less than 35% of the workers are age 26 or younger) offer health benefits compared to 30% of firms with a higher share of younger workers.
Among firms that offer coverage, an average of 77% of workers are eligible for the health benefits offered by their employer. Of those eligible, 80% take up their employer’s coverage, resulting in 62% of workers at these firms having coverage through their employer. Among both firms that offer and do not offer health benefits, 55% of workers are covered by health plans offered by their employer, similar to 2013 (56%).
Twenty-five percent of large firms (200 or more workers) that offer health benefits in 2014 also offer retiree health benefits, similar to the percentage (28%) in 2013 but down from 35% in 2004. Among large firms (200 or more workers) that offer retiree health benefits, 92% offer health benefits to early retirees (workers retiring before age 65), 72% offer health benefits to Medicare-age retirees, and 3% offer a plan that covers only prescription drugs.
Kaiser notes there may continue to be evolution in the way that employers structure and deliver retiree benefits. Among large firms offering health benefits, 25% of firms are considering changing the way they offer retiree coverage because of the new public health insurance exchanges established by the Patient Protection and Affordable Care Act (ACA). In addition to the public exchanges, there is considerable interest in exchange options offered by private firms. Four percent of large employers currently offer their retiree benefits through a private exchange.
The majority of firms that offer coverage to at least some employees offer coverage to dependents (96%). Thirty-nine percent of firms offer coverage to same-sex domestic partners, the same percentage that offers coverage to opposite-sex domestic partners. Both percentages are similar to 2012, the last time the survey included this question. Some employers are requiring additional cost sharing (5%) or restricting eligibility for spouses (9%) to enroll if they have an offer of coverage from another source. Eighteen percent of large firms provide compensation or benefits to employees who do not enroll in coverage.
Wellness
One-third of employers (33%) offering health benefits provide employees with an opportunity to complete a health risk assessment. Large firms (200 or more workers) are more likely than smaller firms to ask employees to complete a health risk assessment (51% vs. 32%). Among these firms, 51% of large firms (200 or more workers) report that they provide a financial incentive to employees that complete the assessment. Thirty-six percent of firms with a financial incentive for completing a health risk assessment reported that the maximum value of the incentive is $500 or more.
Fifty-one percent of large firms (200 or more workers) and 26% of smaller firms offering health benefits report offering biometric screening to employees. Of these firms, one percent of large firms require employees to complete a biometric screening to enroll in the health plan; and 8% of large firms report that employees may be financially rewarded or penalized based on meeting biometric outcomes.
Virtually all large employers (200 or more workers) and most smaller employers offer at least one wellness program. Seventy-four percent of employers offering health benefits offer at least one of the following wellness programs in 2014: 1) weight loss programs, 2) gym membership discounts or on-site exercise facilities, 3) biometric screening, 4) smoking cessation programs, 5) personal health coaching, 6) classes in nutrition or healthy living, 7) web-based resources for healthy living, 8) flu shots or vaccinations, 9) Employee Assistance Programs (EAP), or a 10) wellness newsletter. Large firms are more likely to offer one of these programs than smaller firms (98% vs. 73%).
Of firms offering health benefits and a wellness program, 36% of large firms and 18% of smaller firms offer employees a financial incentive to participate in a wellness program, such as smaller premium contributions, smaller deductibles, higher HSA/HRA contributions or gift cards, travel, merchandise or cash. Among firms with an incentive to participate in wellness programs, only 12% of small firms and 33% of large firms believe that incentives are “very effective” at encouraging employees to participate. In lieu of or in addition to incentives for participating in wellness programs, 12% of large firms have an incentive for completing wellness programs.
The ACA exempts “grandfathered” health plans from a number of its provisions, such as the requirements to cover preventive benefits without cost sharing or the new rules for small employers’ premiums ratings and benefits. An employer-sponsored health plan can be grandfathered if it covered workers when the ACA became law, and if the plan has not made significant changes that reduce benefits or increase employee costs. One change in employer-sponsored health benefits noted by the survey is 37% of firms offering health benefits offer at least one grandfathered health plan in 2014, less than the 54% that did so in 2013. Looking at enrollment, 26% of covered workers are enrolled in a grandfathered health plan in 2014, down from 36% in 2013.
Fifteen percent of covered workers at small firms (three to 199 workers) and 81% of covered workers at larger firms are enrolled in plans which are either partially or completely self-funded. The percent of covered workers enrolled in self-funded plans has increased for large firms since 2004, but has remained stable for both large and small firms over the last couple of years.
While relatively few covered workers at large employers currently receive benefits through a private or corporate health insurance exchange (3%), many firms are looking at this option. Thirteen percent of large firms are considering offering benefits through a private exchange, and 23% are considering using a defined contribution method (see “Exploring DC Models in Health Care Benefits”).
Kaiser notes there may be bigger changes to employer-sponsored health benefits in 2015 as the economy improves and the employer shared-responsibility provision in the ACA takes effect for large employers. Kaiser also expects more changes in 2015 as employers and insurers continue to develop more integrated approaches to assessing individuals’ personal health risks and offer programs to address them.
More information from Kaiser Family Foundation’s survey is here.