Cost-shifting to employees, consolidating plan choices, emphasizing account-based plans and requiring employees to do more to receive incentives are key themes outlined in the 2011 Towers Watson Health Care Trend Survey.
"Unlike the last few years when many employees saw significant increases in co-payments, 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."
According to the survey, the annual cost of medical and pharmacy coverage will increase to $11,204 per employee for active coverage in 2012, an increase of 5.9%.
Roughly two-thirds of employees (66%) will increase employees' share-of-premium contributions for single-only coverage for 2012, and 73% will increase them for dependent coverage.
Employers continue to consolidate plan choices and are adopting account-based plans at a rapid rate, with 57% of large employers expecting to offer this option.
Incentives to participate in wellness programs, or awards to complete a personal health risk assessment or biometric screening, continue to be popular but employees will need to do more to get the same level of incentive rewards.
The survey also found that while employer health care costs will rise at a noticeably lower rate during 2012 compared with 2011 (5.9% vs. 7.6%, respectively), the majority of employers (88%) are planning to take steps to control their costs and avoid the impact of health care reform's excise tax. (Under the Patient Protection and Affordable Care Act, the federal government will impose an excise tax of 40% on insurers of employer-sponsored health plans, including self-insured employers, with an aggregate value of more than $10,200 for individual coverage and $27,500 for family coverage.)
Almost half (45%) will rethink their long-term health care strategy during 2012, says the survey, and many are uncertain how they will respond to the implications of state-based insurance exchanges in 2014.
By 2013 or 2014, according to the survey, many employers are considering significantly reducing their subsidization of coverage for spouses and dependents (23%) and using spousal waivers and surcharges when other coverage is available (19%).
Other findings from the survey include:
* More than half (57%) of employers are considering rewarding or penalizing their employees based on biometric outcomes, compared to 8% today.
* Seven out of 10 employers (70%) expect to lose grandfathered status by 2012.
* More than four-in-10 employers (44%) currently use, or are considering using, social media tools to influence employee health and well-being.
