Healthcare Benefits Trends to Watch in 2016 Webcast

Transcription

2 Today s Agenda Healthcare Benefits Trends to Watch in 2016 is part of the Healthcare Trends Institute s quarterly HealthChange Web Series We will cover several healthcare benefits topics including defined contribution, insurance exchanges, wellness and healthy lifestyle programs, reform legislation including Cadillac tax, and more Overview of trends from the 2015 Healthcare Benefits Trends Benchmark Study from Tiffany Wirth, Executive Director, HTI Expert panel includes Healthcare Trends Institute Editorial Advisory Board members: Sander Domaszewicz, Principal and Senior Consultant, Mercer Chris Byrd, President and Chief Operating Officer, Evolution1 Sam Robinson, National Director, U.S. Health Plan Industry, Microsoft Health and Life Sciences Healthcare Trends Institute. All Rights Reserved. 2

3 2015 Healthcare Benefits Trends Benchmark Study Polled over 100 HR executives, benefit managers and administrators, and other benefit decisionmakers across the US Conducted Fall of 2015 Company size ranged from less than 50 full-time employees, to more than 2,500 Variety of of industries represented including manufacturing, government, technology, and finance & insurance Responses were collected from all regions across the United States Surveyed topics included employee and health benefits, defined contribution, insurance exchanges, wellness and healthy lifestyle programs, Cadillac tax, benefit communications and more Healthcare Trends Institute. All Rights Reserved. 3

4 Study Highlights The top employee health benefit programs offered by respondents companies include dental (73.6%), family (72.7%), vision (67.8%), prescription drug (67.8%), and PPO (59.5%) Healthcare Trends Institute. All Rights Reserved. 4

5 Study Highlights 77.6% of respondents indicated that health benefits offerings were important to very important for retaining and attracting quality employees, while 72.5% for improving morale and satisfaction Healthcare Trends Institute. All Rights Reserved. 5

6 Study Highlights 35% indicated they were somewhat to very concerned about the impending 2018 Cadillac Tax (recently delayed to 2020) However, 85% of respondents have made no changes to their 2016 benefits in advance of the Cadillac Tax Healthcare Trends Institute. All Rights Reserved. 6

7 Study Highlights 52.1% indicated they had some familiarity with Defined Contribution Plans (DCPs) and private exchanges Of the respondents who indicated they were interested in DCPs for the future, 11.7% reported they were considering for 2016 followed by 31.7% in 2017, and 23.3% in Healthcare Trends Institute. All Rights Reserved. 7

8 Study Highlights 34.6% of companies surveyed are already using some kind of healthy lifestyle incentive/ program, while 24.4% are not interested and 21.8% are considering for the future Healthcare Trends Institute. All Rights Reserved. 8

9 Study Highlights To promote positive health outcomes, 44.6% of companies offer at least one wellness program, however, 39.2% don t currently promote any Healthcare Trends Institute. All Rights Reserved. 9

10 Key Differences from 2014 Study The 3 highest company offered employee benefits programs (PPO, Family, and Prescription Drug) in the 2014 study results continued to rank high in 2015, but with Dental at number one with 73.6% Increased employee cost-sharing (48.6%) remains the top healthcare reform impact on employee benefits packages 77.6% of respondents indicated that health benefits offerings were most important for retaining and attracting quality employees, while 2014 reported improving employee morale and satisfaction as number one Smaller percentage (35%) of the respondents are expressing concern about the impending 2018 Cadillac Tax In order to not be penalized under the Cadillac Tax, only a small portion of respondent companies are moving to a high deductible health plan (16%) or cutting subsidy of health benefits to spouses or dependents (8.5%), however, a larger count (85%) are not making any changes quite yet The familiarity of defined contribution health benefit plans and private exchanges (52.1%) are increasing from 2014 (42.2%) Number of companies surveyed who are already using some kind of healthy lifestyle incentive/program (34.6%) has increased from 2014 (29.8%) Healthcare Trends Institute. All Rights Reserved. 10

11 Study Key Trends Healthcare reform is positively impacting employer s commitment to offering health benefits and believe benefit offerings are important to attracting and retaining talented employees. Continued interest grows among employers to learn and understand more about Defined Contribution Plans Employers are already exploring and adopting wellness and healthy lifestyle programs, while others are continuing to consider for the future Although there is some concern for the impending 2018 Cadillac Tax, employers are not quite making any changes as of yet Employers are looking to insurance brokers and benefit consultants to learn more about new health benefit designs and distribution models Helping employees better understand the value of provided benefits and making cost-conscious benefit decisions continues to remain important to employers Healthcare Trends Institute. All Rights Reserved. 11

12 HEALTH WEALTH CAREER HEALTH BENEFIT TRENDS Health Trends Ins.tute February 3, 2016 Sander Domaszewicz 12

13 ABOUT MERCER S NATIONAL SURVEY OF EMPLOYER-SPONSORED HEALTH PLANS Oldest Marking 30 years of measuring health plan trends Largest 2,486 employers participated in 2015 Most comprehensive Extensive questionnaire covers a full range of health benefit issues and strategies Statistically valid Based on a probability sample of private and public employers for reliable results Includes employers of all sizes, all industries, all regions Results project to all US employers with 10 or more employees Employer size groups in presentation Small: employees/large: 500+ employees/jumbo: 20,000+ employees Mercer s National Survey of Employer-Sponsored Health Plans

14 THE YEAR S TOP STORIES 1 Cost growth moderate, at 3.8% in 2015 with 4.3% projected for 2016 But while large employers held increase to 2.9%, small employers saw cost rise 5.9% One in four covered employees is now in a CDHP Consumerism tools are helping employees make the best plan choice. Analysis: 25 strategies that helped employers achieve lower cost and trend in 2015 Successful practices spanned program design, care delivery, workforce health Consumer empowerment is building, supported by new programs and technology Telemedicine, cost transparency tools and mobile devices are all on the rise. New clinical models ACOs and medical homes lead the evolution to valuebased care Centers of Excellence and narrow networks are first steps for some employers Private exchanges will be used by 6% of large employers for 2017 open enrollment, with rapid growth expected to continue through 2020 Employers seek to add choice, ease administration, manage cost, and more easily transition to CDHPs Mercer s National Survey of Employer-Sponsored Health Plans

15 COST ROSE A MODERATE 3.8% IN 2015, WITH A SIMILAR INCREASE OF 4.3% PREDICTED FOR 2016 Change in total health benefit cost per employee compared to CPI, workers earnings 16.0% 14.0% 14.7% Annual change in total health benefit cost per employee Workers' earnings 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 8.0% 2.1% 2.5% 6.1% 8.1% 7.3% 11.2% Overall inflation 10.1% 7.5% 6.3% 6.9% 6.1% 6.1% 6.1% 6.1% 5.5% 4.1% 3.9% 3.8% 4.3% 2.1% 0.0% -2.0% -1.1% 0.2% * Projected Source: Mercer s National Survey of Employer-Sponsored Health Plans; Bureau of Labor Statistics, Consumer Price Index, U.S. City Average of Annual Inflation (April to April) ; Bureau of Labor Statistics, Seasonally Adjusted Data from the Current Employment Statistics Survey (April to April) Mercer s National Survey of Employer-Sponsored Health Plans

16 SHARPER INCREASE BUT LOWER PER-EMPLOYEE COST FOR SMALL EMPLOYERS Average total health benefit cost per employee in % $11, % $11, % $11,973 All employers Employers with employees Employers with 500 or more employees Mercer s National Survey of Employer-Sponsored Health Plans

17 ACA IMPACT: EMPLOYERS TOOK STEPS TO REDUCE EXCISE TAX EXPOSURE Large employers Consumer-directed health plans: 39% added a plan or took steps to build enrollment in existing plan Dropping a high-cost plan: 11% Plan design changes to shift cost to employees: 19% Eliminating health care FSAs: 3% The delay in the excise tax may slow the pace of change, but employers will continue to take action to manage long-term cost growth Mercer s National Survey of Employer-Sponsored Health Plans

18 COST-SHIFTING HAS ACCELERATED IN THE HEALTH REFORM ERA, CHALLENGING EMPLOYERS TO HELP EMPLOYEES MANAGE GROWING FINANCIAL RISK Average PPO deductible for individual, in-network coverage Small employers Large employers $1,663 $1,681 $1,738 $1,410 $1,452 $1,113 $1,192 $511 $565 $587 $666 $684 $785 $ Mercer s National Survey of Employer-Sponsored Health Plans

19 OVER A FOURTH OF ALL COVERED EMPLOYEES ARE ENROLLED IN A CONSUMER-DIRECTED HEALTH PLAN Large employers By 2018, 75% of large employers expect to offer a CDHP 75% Percent of employers offering CDHPs Percent of covered employees enrolled in CDHPs 59% 48% 32% 36% 39% 28% 20% 8% 23% 10% 13% 15% 18% 23% By 2018 (projected) Mercer s National Survey of Employer-Sponsored Health Plans

20 EMPLOYERS SAVE WITH HSA-BASED CDHPs: AVERAGE COST WAS MORE THAN 20% LOWER THAN FOR EITHER PPOs OR HMOs IN 2015 Medical plan cost per employee (includes employer contributions to HSA accounts) among large employers $11,609 $12,056 $9,921 $9,215 PPO PPO with deductible of $1,000 or more HMO HSA-eligible CDHP Mercer s National Survey of Employer-Sponsored Health Plans

21 ENROLLMENT IN CDHPs GROWS SLOWLY OVER TIME, AND EMPLOYER ACCOUNT CONTRIBUTION IS CRITICAL Large employers offering HSA-based CDHPs Enrollment growth over time % eligible employees choosing HSA-based CDHP when offered alongside other medical plan choice(s), among employers offering the HSA for at least three years Employer HSA funding affects enrollment % eligible employees choosing HSA when offered with other medical plans 21% 26% 29% 37% 32% 22% Employer HSA contribution of $800+ Employer HSA contribution less than $500 Employer does not contribute to HSA Mercer s National Survey of Employer-Sponsored Health Plans

22 MAJORITY OF LARGE EMPLOYERS EXPECT TO OFFER A CDHP BY 2018 BUT MOST SEE IT AS AN OPTION, RATHER THAN A FULL REPLACEMENT Small employers ( employees) Large employers (500+ employees) Jumbo employers (20,000+ employees) 55% 61% 61% 17% 21% 25% 22% 25% 15% Will offer CDHP as the only plan to all or most employees within the next three years Will offer CDHP along with other medical plan option(s) Will not offer CDHP Mercer s National Survey of Employer-Sponsored Health Plans

23 HSA-ELIGIBLE PLANS ARE FAR MORE COMMON THAN HRA-BASED PLANS Percent of large employers offering plan HSA-eligible CDHPs HRA-based CDHPs 60% 50% 40% 30% 20% 10% 0% 50% 41% 32% 24% 27% 14% 17% 10% 11% 10% 11% 14% 8% 8% MERCER S NATIONAL SURVEY OF EMPLOYER-SPONSORED HEALTH PLANS 23

24 COST TRANSPARENCY TOOLS Percentage of employers that contract with a specialty vendor outside the health plan to provide transparency tool Among large employers who provide transparency tools: All large employers 13% provide incentives to encourage employees to use them. 27% track utilization. Of those, about 1 in 5 report utilization of 20% or more, but nearly half report utilization of less than 5%. 24% Employers with 20,000+ employees 22% 12% 15% 15% 13% Considering Mercer s National Survey of Employer-Sponsored Health Plans

25 TELEMEDICINE IS THE FASTEST-GROWING TREND IN CARE DELIVERY Among large employers offering telemedicine: 26% reported a utilization rate of 5% or higher in % agree that the telemedicine program has met their objectives. 85% say that the most important reason for offering telemedicine is to provide employees with a more affordable, convenient source of care. All large employers Employers with 20,000+ employees 34% 30% 44% 44% 35% 18% 18% 11% Considering Mercer s National Survey of Employer-Sponsored Health Plans

26 USE OF ACCOUNTABLE CARE ORGANIZATIONS (ACOs) IS RISING, BUT COST IMPACT NOT CLEAR TO MOST Among employers with 5,000+ employees offering ACOs*: 80% offer an ACO as a standard health plan offering. 28% actively encourage members to seek care from the ACO. 16% report some cost savings achieved with the ACO; most can t measure. All large employers Employers with 20,000+ employees 43% 25% 33% 34% 29% 10% 10% 13% Considering *Preliminary results from supplemental survey of employers with 5,000 or more employees Mercer s National Survey of Employer-Sponsored Health Plans

27 GROWTH IN USE OF CENTERS OF EXCELLENCE AMONG LARGEST EMPLOYERS All large employers Employers with 20,000+ employees 48% 37% 41% 35% 22% 24% 25% 24% Considering Mercer s National Survey of Employer-Sponsored Health Plans

28 HEALTH ADVOCACY IS INCREASINGLY RECOGNIZED AS A CRITICAL RESOURCE IN A COMPLEX HEALTH CARE SYSTEM Percent of large employers offering program % 77% 68% 71% 80% 83% 40% 36% 39% 32% 42% 52% 56% 0% NA Health assessment Phone/web health coaching Face-to-face health coaching Sleep disorder treatment Resiliency/stress management program Health advocate Disease management Addressing the continuum of health needs Mercer s National Survey of Employer-Sponsored Health Plans

29 INNOVATIVE TECHNOLOGIES AND ACTIVITIES FOR A MORE ENGAGING MEMBER EXPERIENCE ACTIVITIES Worksite biometric screening event All large employers Employers with 20,000+ employees 56% 71% TECHNOLOGY-BASED RESOURCES All large employers Employers with 20,000+ employees Mobile apps 30% 44% Business unit/location group challenges 45% 57% Wearables / apps to monitor activity 24% 38% Onsite exercise or yoga classes or weight loss programs (such as Weight Watchers) 43% 76% Personal challenges 40% 55% Peer-to-peer support 19% 33% Devices to transmit health measures to providers 4% 11% Onsite kiosks 7% 12% Other web-based resources/tools 40% 63% Mercer s National Survey of Employer-Sponsored Health Plans

30 EMPLOYERS USE FINANCIAL INCENTIVES TO IMPROVE PARTICIPATION RATES IN KEY PROGRAMS Large employers 54% 40% 27% Health assessment Validated biometric screening Lifestyle coaching Including spouses builds engagement: 62% of employers make key elements of program available to spouses (up from 56% in 2014) Half of those make spouses eligible for incentives Offer incentives (among employers with programs) Large employers offering incentives Large employers not offering incentives Large employers using incentives report higher participation rates. 48% 26% 20% 12% 52% 22% *Average % of identified persons actively engaged in program Health assessment completion rate Lifestyle management program participation rate* Validated biometric screening rate Mercer s National Survey of Employer-Sponsored Health Plans

31 PRIVATE HEALTH BENEFIT EXCHANGES GAIN A FOOTHOLD AS INTEREST CONTINUES TO BUILD Large employers 27% 24% Use now Use now / planned for 2017 Considering using within 5 years 6% 4% 4% 8% 13% 15% 17% For active employees For pre-medicare-eligible retirees* For Medicare-eligible retirees* * Among current retiree medical plan sponsors Mercer s National Survey of Employer-Sponsored Health Plans

32 GIVEN HOW STRONGLY EMPLOYEES VALUE HEALTH BENEFITS, EVEN SMALL EMPLOYERS PLAN TO STAY IN THE GAME Percent of employers that say they are very likely or likely to terminate plans within the next five years 21% % 7% 6% 4% 5% Employers with employees Employers with 500 or more employees Mercer s National Survey of Employer-Sponsored Health Plans

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35 On the Hill: Cadillac Tax Dominates It s a combination of good and bad The Good: moves employers to more costconscious plans The Bad: Disparate geographic and demographic impact CDH consumer accounts are included CDH accounts rendered particularly vulnerable Tax calculated at individual employee level Employers will assume full funding Employers don t want to pay ANY tax Result: employers may eliminate this benefit Many employers set benefit strategy well in advance Healthcare Trends Institute. All Rights Reserved. 35

37 View From the Firing Line Two year delay to 2020 passed in December Industry keeping pressure on Congress for permanent solution Key messages Delay doesn t really buy us two years Repeal of the tax is desired, but if not possible, FSA and HSA contributions should be carved out For CDH advocates, carve-out sets important precedent for comprehensive tax reform discussions down road Challenges to near-term action Budget score Election year limited window of time Important takeaway: Employers do not need to make drastic changes right now and have time to see this play out Healthcare Trends Institute. All Rights Reserved. 37

38 Small Business Bill Only 40% of small employers offer health insurance Use of reimbursement arrangements was growing as an alterna.ve Would enable small employers to provide HRAs for individual insurance premiums and out-of-pocket expenses Today such arrangements violate ACA market reforms - $100/day/employee fine Bills introduced in both chambers with bipartisan support House: 37 R, 34 D co-sponsors Senate: 8R, 4D Significant coalition support Source: NFIB Healthcare Trends Institute. All Rights Reserved. 38

39 The Regulatory Arena: DOL Increased Employer Responsibility, Liability, Cost Repor.ng Oversight Suitability Educa.on Proposal to extend Fiduciary Rule to include HSAs Potential to inhibit employer adoption and raise administrative costs Final rule expected this quarter with HSAs subject to HSA industry talking up legislative fix Healthcare Trends Institute. All Rights Reserved. 39

40 Pay Attention to the Public Exchanges Plan design regulation proposals abound Example: 3 free office visit requirement Would disqualify all plans from HSA Minimum MLR requirements Measured at the market, not product level Leads to price compression; makes low AV plans (HSA) price uncompetitive Industry advocating for changes Why does this matter? Exchanges increasingly define the individual market Plan designs can begin to influence group market offerings Healthcare Trends Institute. All Rights Reserved. 40

41 Looking Ahead (Wildly) unpredictable Presidential election Direct policy impact Affect on Congressional election Watch the Senate: 24 R, 9 D seats up Possible outcomes Double down on ACA Pragmatism enters the conversation Repeal? A really long shot Don t forget tax reform Healthcare is still a big part of the discussion Healthcare Trends Institute. All Rights Reserved. 41

42 Emerging Health Plan Technology Trends February 2016 Sam Robinson National Director U.S. Health Plan Industry Microsoft Health and Life Sciences

43 Emerging Health Plan Technology Trends in 2016 Personalized and Predictive Analytics Virtual Health Holistic Member Engagement

44 Personalized and Predictive Analytics Moving from Descriptive to Prescriptive Descriptive Claims Clinical Financial Social Sensor Genomics Wearables Environmental Predictive Manage Store Learn / Analyze Visualize Prescriptive Personalized Health Population Health Operational Efficiency Risk Mitigation

45 Virtual Health Telecollaboration Provider to Provider / Payor Professional care team interactions that support the efficient exchange of expertise, best clinical practice, effective care coordination care within multi-disciplinary teams Telehealth Consumer Focused Tools Digital health services and tools that engage health consumers to promote self and peer care, remote management, lower cost utilization and care plan compliance. [portals, texting tools, wearable tech] Telemedicine Provider to Patient Clinical encounters between a care team member and a patient at a distance in order to improve access to care, lower labor intensity and deliver care in the lowest cost setting possible.

46 Holistic Member Engagement Combined Sales, Service, Marketing and Care Management Member Support Omni Channel Mobile, Web, Phone Social OMNI not Multi Member Centric Follows member journeys: Administrative Care Wellness Digitally Engaging Human Natural Pressing Rewarding

48 About the Institute The mission of the Healthcare Trends Institute is to provide the latest information, news, education, resources and insights into the rapidly changing healthcare environment. This site will cover a range of topics including healthcare and employee benefits, health exchanges, insurance, and related areas of interest. Institute Programs include: HealthChange Educational Web Series Institute membership Healthcare Trends E-newsletter Community Tiffany Wirth, Executive Director Tiffany Wirth is Executive Director of the Healthcare Trends Institute. She also serves as Director of Marketing at Evolution1. Healthcare Trends Institute th Avenue, SW, Ste. 200, Fargo, ND P: E: info@healthcaretrendsinstitute.org Healthcare Trends Institute. All Rights Reserved. 48