Most Large Employers Revising Health Benefits Programs for 2011

Most large US employers are moving forward with plans to make changes to their 2011 health care benefit programs in the wake of both health reform and expected large health benefit cost increases next year, according to a new survey by the National Business Group on Health.

The surveywhich collected responses from 72 of the nation's largest corporations representing more than 3.7 million employees was conducted in May and June, 2010. The results show that:


More than half (53 percent) of respondents are still planning to make changes to their benefit plans despite the uncertainty that exists around complying with the Patient Protection and Affordable Care Act. Among this 53 percent, 70 percent said they will remove lifetime dollar limits on overall benefits while 37 percent reported they will make changes to annual or lifetime limits on specific benefits.


Employers estimate their health care benefit costs will increase an average of 8.9 percent next year, compared with an average increase of 7 percent this year. To help control those increases, employers are planning to use a wider variety of cost-sharing strategies. The survey found 63 percent of employers plan to increase the percentage employees contribute to the premium, up from 57 percent who did so this year, while 46 percent plan to raise out-of-pocket maximums next year compared with 36 percent this year.



More than six in ten (61 percent) employers will offer a consumer-directed health plan (CDHP) in 2011. While the most common type of plan employers will offer is a high-deductible plan combined with a health savings account (64 percent), the survey found a big spike in employers moving to a full replacement plan. Among employers offering a CDHP, the number moving to a full replacement plan doubled from 10 percent this year to 20 percent in 2011.


With the health reform law making Medicare Part D benefits richer as the "doughnut hole" closes between now and 2020, 5 percent of employers plan to drop retiree health coverage in 2011 while 60 percent are considering doing so in the future.



Four in ten (41 percent) of employers offered premium discounts for completing health assessments while 22 percent offered premium discounts for participating in tobacco cessation programs.



One in four (25 percent) of employers plan to raise the co-pay or co-insurance for retail pharmacy prescription drug benefits while 21 percent plan to do the same for mail-order pharmacy benefits.


Health reform legislation has forced employers to re-evaluate their benefit strategies, but at the end of the day, it's clear that controlling rising costs remains priority number one, as outlined in this earlier post.

The complete 22-page survey report is available here.