By now, it’s fairly common knowledge that health insurance costs have risen dramatically over the years, and one would be forgiven for thinking that employers (who theoretically subsidize) their employees’ premiums would have given up. Surprisingly, though, that’s not the case.
Recently, Prudential Financial published the results of a survey conducted a few months ago. The study, of some 1200 randomly selected benefits decision-makers, indicates that there’s an increasing number of “progressive” employers who plan to adopt new strategies in an effort to address cost drivers. These initiatives include wellness programs, consumer-driven health plans and integrated health and disability management initiatives.
Currently representing a tad over 10% of those surveyed, the number of these “progressives” is expected to grow by 50% over the next few years. If so, it would represent a dramatic shift in how employers (and, one supposes, their employees) view the health insurance portion of their benefits packages.
Another interesting finding was that, as benefit choices become more complex, and employees are asked to take on a greater share of the cost, many employers plan to seek external guidance from benefits brokers, insurers and even employees themselves to help them build the best solutions for their companies. This seems to me to be a positive step: it implies that decision makers know that premiums themselves are as much indicators as expenses, and that more input (especially from employees) will generate more information, and ownership.
The study also found that larger (over 100 employees) employers tend to feel that offering competitive benefits is "important;" those with less than 100, not so much. And over 4 out of 5 employees are currently trying to achieve an overall healthy lifestyle, only about a third of the employers believe that their employees think that’s important. Quite a disconnect.
Meanwhile, some smaller employers in the Bluegrass State may shortly see the cavalry cresting the hill:
“The new Kentucky Insurance Coverage Affordability and Relief to Small Employers [ICARE] pilot program will help eligible employers with 2 to 25 employees pay health insurance premiums.”
ICARE will initially be available to employers willing to cough up half of their employee's premiums; the average salary of those employees can’t be more than 3 times the federal poverty level. This year, that means a maximum average salary of about $30,000. While no one in that group’s likely to be yacht-shopping, it’s not exactly starving to death, either.
The program seems aimed at employers who don’t currently offer a group health plan: it’ll pay $40 in subsidies (per employee, per month) if the employer has not offered health coverage for the past 12 months. I don’t sell in the Kentucky market, but that number implies to me a pretty generic plan, with a modest (perhaps $1,000) annual deductible and some office visit co-pays. It would also be about right for an HSA-type plan.
As the Prudential survey found, wellness programs seem to be a hot topic right now, and Kentucky hasn’t missed this: “After July 1, 2007, insurers participating in the program must offer a health lifestyle discount,” officials say.
Worth watching, no?
Henry Stern, LUTCF is an independent insurance agent in Dayton, OH. A licensed Continuing Education instructor for Ohio and Kentucky, he has well over 20 years of experience in “the biz.” He blogs every day (or so it seems) at InsureBlog.