It’s no surprise that health care costs are continuing to rise and while employers remain committed to providing benefits, many are re-evaluating their benefit strategies, using a mix of traditional cost-shifting approaches and new network and plan design strategies to combat those rising costs.
Over 60% of employers have either implemented or are considering implementing a high-deductible health plan as the only option for employees over the next three years, according to PricewaterhouseCoopers’ 2015 Health and Well-being Touchstone Survey results. Eighty-seven percent, meanwhile, are committed to worksite wellness programs.
For employers than made changes to their plans in an effort to control costs, the average reported annual increase in medical plan costs was 4.5% in 2014, roughly the same as last year. The average reported increase in medical plan costs among those employers that did not make any changes to their plans was 7.9%.
“One of the interesting things we saw, really shocking, was the number of plan options really jumped from 2.9 to 4.1,” says PwC principal Barbara Gniewek. For large employers, it was an even bigger jump from 3.6 to 5.7, she notes.
“There is a bigger trend going on here, and it’s not a spurious result,” adds Mike Thompson, a principal with PwC. “I hear more and more that employees are as interested in choice as they are in the benefits themselves.”
High deductible health plans continue to grow in popularity, the report notes. Eighty-three percent of employers are offering HDHPs and 56% of HDHPs have a health savings account.
HDHP adoption is being accelerated somewhat by the Affordable Care Act’s Cadillac tax because employers don’t want to pay the 40% tax, Thompson adds. “This trend is going to play out over time, but I think we have to monitor how this is implemented going forward,” he says.
A new mantra
Employers are also continuing to invest in wellness programs, the report notes, with just under three quarters (73%) currently offering a wellness program of some kind.
However, wellness participation is currently hovering around 30% unless incentives are brought into play. Participation jumps close to 30 percentage points when incentives are used.
“It’s not hard to argue why many employers got into wellness,” says Thompson. “If we can help employees take better care of themselves, they won’t need as much health care coverage. When you look at ROI, the ROI around well-being is tremendous. When people feel better about themselves, they feel better about the company, they’re more engaged; the evidence is very, very strong.”
According to the report, the three most popular wellness programs include: biometric screenings, BMI measurements and health risk questionnaires.
What’s a little different in the wellness field, Gniewek notes, is the marginal number of employers (57%) offering disease management programs. The DM programs most often offered include diabetes (93%), Cardiac (76%) and asthma (74%) programs.
“Nobody can argue if we can help people with chronic conditions take better care of themselves, there’s an incentive to that,” Thompson adds. “I think this is an area not going away soon.”
And while a majority of employers say they are somehow targeting physical wellness, two-thirds say they are also focusing on emotional and financial well-being.
“As financial well-being comes into the mix, this will become more prevalent in helping people better manage finances,” Thompson says.
The report notes the biggest areas of future investment are career, community, financial and emotional well-being.
According to Gniewek, there was little change in terms of retirement contributions.
401(k) plans are still the most prevalent form of retirement programs, according to the report. Employers on average are offering a maximum contribution of 3.1%, and defined benefit plans are continuing to fade.
Over 1,150 employers in 36 different industries across the U.S. participated in the survey, which was completed in the first quarter of 2015.