Ninety-four percent of large and mid-size U.S. employers surveyed recently by Aon Hewitt say they will continue to offer health benefits to their employees in the next three to five years. Nearly two-thirds of those, however, plan to shift away from a traditional “managed trend” approach to one requiring a more active role from participants.
“The health care marketplace is becoming increasingly complex,” says John Zern, executive vice president for Aon Hewitt. “New models of delivery, new approaches to managing health, and new compliance requirements are challenging employers to think differently about their role in ‘owning’ health insurance responsibilities for employees and their dependents. Employers are staying in the game, but they are taking bold and assertive steps to achieve more effective results — and they are doing so at a faster pace than we’ve seen in prior years.”
Aon Hewitt says the amount employers spend on health care has risen to $8,800 per worker, a 40% gain in six years. For employees, meanwhile, premiums and expenses have jumped 64% in the same period, to $5,000 a year. Aon Hewitt estimates annual 8% to 9% growth for the foreseeable future.
Almost 40% of companies without one plan a move toward some kind of “house money, house rules” approach to health insurance. Examples of this method include lower premiums (or broader coverage) for those who engage in biometric screenings or health risk questionnaires, or waiving prescription drug copays for those who demonstrate they are following doctors’ orders regarding a chronic condition.
Only 6% of those surveyed by Aon Hewitt plan to exit employer-sponsored health care entirely, but around 28% are eyeing the next three to five years for a move to a private health care exchange.
“Private health care exchanges allow employers to re-create a competitive marketplace for health insurance based on consumer choice, which will encourage insurance companies to drive the system toward greater efficiency,” says Jim Winkler, chief innovation officer for the U.S. health & benefits practice at Aon Hewitt. “While this option may not be a fit for every employer, it is increasingly attractive to those organizations that want to offer employees health care choice while lowering future cost trends and lessening the administrative burden associated with sponsoring a health plan.”
