City and County of San Francisco - Health Service System Benchmark Report 2010 Mercer National Survey of Employer-Sponsored Health Plans A special report
A special report from the 2010 Mercer National Survey of Employer-Sponsored Health Plans Growth in the average total health benefit cost per employee, which had slowed last year to 5.5%, picked up steam, rising 6.9% to $9,562, the biggest increase since 2004. Employers expect high cost increases again in 2011. They predicted that cost would rise by about 10% if they made no health program changes, with roughly two percentage points of this increase coming solely from changes mandated by health reform for 2011. However, employers expect to hold their actual cost increase to 6.4% by making changes to plan design or changing plan vendors. Employers did a little of everything to hold down cost increases in 2010. They raised deductibles and dropped HMOs, which were more costly than PPOs. Large employers especially very large employers added consumer-directed health plans. Just over half of employers with 20,000 or more employees offered a CDHP in 2010, with 15% of their covered employees enrolled in them. The appeal of these plans is clear: HSA-based CDHP coverage costs almost 25% less than PPO coverage. Employers also took steps to improve workforce health by providing employees with financial incentives to use health management programs or to reward healthconscious behavior. With health care reform now a reality, employers were asked how likely they are to drop their health plans once state-run insurance exchanges become operational in 2014 and make it easier for individuals to buy coverage. For the great majority, the answer was not likely. Large employers remain committed to their role of health plan sponsor, with just 6% of those with 500 or more employees saying they are likely to terminate their health plans. While one-fifth of employers with 10-499 employees say they are likely to drop coverage, this hasn t happened in Massachusetts, where insurance exchanges have been operating under state-based health reform for over three years. Using a scientific random sample and supplemental convenience sample, we collected data from 2,833 employers with 10 or more employees. The national and regional results are based on the random sample only and are weighted to be projectable. However, results for city, state and other special employer groups include the convenience sample and are unweighted. In cases where there are too few data to report, "ID" (insufficient data) appears instead of a figure. NUMBER OF PARTICIPANTS GEOGRAPHIC REGIONS USED IN THIS SURVEY 106 No. Ca. 500+ 38 20,000 + 163 Consulting. Outsourcing. Investments.
EMPLOYER PROFILE Demographics Average employee age 44 44 42 48 Average % of female employees 56% 44% 52% 49% Average % of union employees 39% 29% 12% 100% MEDICAL PLAN PREVALENCE Type of medical plan offered Percent of employers offering each type of medical plan PPO/POS 96% 95% 91% Yes HMO 41% 82% 68% Yes HSA-eligible CDHP 15% 16% 37% No HRA-based CDHP 7% 11% 24% No Either type of CDHP 20% 26% 51% No Indemnity 7% 16% 15% No Employee enrollment Percent of all covered employees enrolled in each type of medical plan PPO/POS HMO HSA-eligible CDHPs HRA-based CDHPs Indemnity No. Ca. 500+ 20,000 + CCSF 2% 1% 2% 25% 2% 3% 1% 8% 8% 1% 4% 71% 42% 52% 23% 61% 96% 2010 MERCER NATIONAL SURVEY OF EMPLOYER-SPONSORED HEALTH PLANS 3
TOTAL HEALTH BENEFIT COST Average total health benefit cost* per employee $12,202 $11,565 $11,005 $11,251 $9,838 $9,146 $13,418 $13,703 2009 2010 ** *Total health benefit cost includes medical, dental, Rx, vision and hearing benefits ** Note that CCSF reports 2010/2011 and 2011/2012 rates Health benefit cost as a percentage of payroll Average total health benefit cost as a percentage of payroll for 2009 18.2% 14.4% 11.8% N/A Expected average increase in total health benefit cost per employee for 2011 Before any plan changes other than as required by PPACA* After plan changes* 4.7% 8.3% No. Ca. 500+ 9.1% 13.0% 20,000 + 6.4% 9.0% CCSF** 2.0% 1.8% *Changes to plan design or health plan vendor ** Note that CCSF reports increase for 2011/2012 2010 MERCER NATIONAL SURVEY OF EMPLOYER-SPONSORED HEALTH PLANS 4
EMPLOYEE CONTRIBUTIONS Individual coverage Average monthly contribution for individual coverage ($) PPO/POS $81 $109 $101 $0 HMO $67 $99 $106 $0 HSA-eligible CDHP $32 $28 $55 N/A HRA-based CDHP $50 $49 $89 N/A Dental $18 $17 $20 $0 Average contribution for individual coverage as a % of premium PPO/POS 14% 19% 25% 0% HMO 14% 21% 27% 0% HSA-eligible CDHP 10% 6% 17% N/A HRA-based CDHP 13% 16% 24% N/A Dental 49% 33% 53% 0% Family coverage* Average monthly contribution for family coverage ($) PPO/POS $289 $283 $333 $1,860 HMO $296 $288 $345 $351 HSA-eligible CDHP $243 $271 $194 N/A HRA-based CDHP $188 $180 $314 N/A Dental $47 $57 $57 $0 Average contribution for family coverage as a % of premium PPO/POS 25% 28% 30% 61% HMO 24% 25% 31% 22% HSA-eligible CDHP 29% 10% 22% N/A HRA-based CDHP 19% 16% 29% N/A Dental 57% 40% 55% 0% *Family coverage is defined as coverage for employee, spouse and two children 2010 MERCER NATIONAL SURVEY OF EMPLOYER-SPONSORED HEALTH PLANS 5
COVERAGE ELIGIBILITY, ELECTION Average % of employees waiving own coverage 8% 10% 20% 4% % of employers offering incentive to waive coverage 38% 42% 15% N/A Dependent coverage Include provisions concerning spouses with other coverage 6% 8% 15% No Average % of employees electing dependent coverage 58% 60% 55% 56% Offer same-sex domestic partner coverage 29% 89% 72% Yes Part-time employees Offer coverage to part-time employees* 63% 89% 83% Yes Average number of hours / week needed to qualify 23 24 21 20 Benefits, contributions are same for covered PTEs and FTEs 52% 83% 29% Yes Employ seasonal / temporary employees who may work 30 or more hours per week Yes, and they are eligible for health benefits 6% 19% 11% Yes Yes, but they are not eligible for health benefits 74% 49% 44% Yes Offer mini-med or limited health plan 2% 5% 25% No *Among employers that have part-time employees HEALTH REFORM Projected spending increase attributable solely to 2011 PPACA requirements 1 Percent of employers Less than 1% 1-2% 3-4% 5% or more Don't know No expected increase No. Ca. 500+ 20,000 + CCSF 10% 29% 9% 8% Dependent coverage 30% 14% 17% 17% 19% 6% 17% 25% 14% 5% 10% 3% 15% 53% 100% 0 Dependent eligibility 1 20,000 + Extended coverage for 2011 plan year when required 65% 72% 78% Extended coverage for 2010 plan year before required 23% 28% 18% Already in compliance, no change needed 12% 0% 4% Likely to require verification of no other employer coverage 38% 25% 30% 1 Based on employers with 50 or more employees 2010 MERCER NATIONAL SURVEY OF EMPLOYER-SPONSORED HEALTH PLANS 6
HEALTH REFORM, CONTINUED "Shared responsibility" rule 20,000 + Offer coverage to all employees working 30+ hours / week 1 49% 80% 73% Likely actions among employers meeting requirement 2 : Change strategy so that fewer work 30+ hours / week 2% 0% 9% Raise eligibility to 30 hours / week, if currently lower 26% 19% 15% Likely actions among those not meeting 30+ hours requirement 2 : Change strategy so that fewer work 30+ hours / week 34% 14% 28% Add lower-cost plan for those working less than 40 hours / week 11% 14% 0% Make all working 30+ hours / week eligible for full-time plan 43% 50% 43% Make no (or minimal) changes and pay penalty as necessary 7% 29% 8% Believe plan would be considered "unaffordable" for some employees 1 19% 24% 34% Likely to change plan to avoid incurring penalties (among employers likely to have an unaffordable plan) 2 95% 88% 79% Auto-enrollment 20,000 + Currently auto-enroll new hires 3 23% 36% 23% Likely to use lowest-cost plan as default for auto-enrollment 2 59% 61% 61% Most likely action with regard to excise tax for high-cost plans 1 Will do whatever is necessary to bring plan cost below threshold amounts Will take no special steps to reduce cost below the threshold Will attempt to bring cost below the threshold amounts, but it may not be possible Believe plan(s) are unlikely to ever trigger the tax No. Ca. 500+ 20,000 + 39% 25% 25% 8% 25% 26% 2% 31% 1% 35% 42% 40% Likelihood of terminating medical plan(s) after some or all PPACA provisions go into effect 20,000 + Very likely 0% 3% 0% Likely 1% 8% 4% 1 Based on employers with 50 or more employees; 2 Based on employers with 500 or more employees; 3 Based on employers with 200 or more employees 2010 MERCER NATIONAL SURVEY OF EMPLOYER-SPONSORED HEALTH PLANS 7
STRATEGIC PLANNING Very likely to offer account-based CDHP in 2011 With a Health Savings Account With a Health Reimbursement Arrangement 39% 26% 24% 18% 18% 8% 20,000 + Expect to offer an account-based CDHP in next five years 20,000 + As the only type of plan offered 2% 15% 20% Alongside other medical plan choices 42% 44% 56% Offer on-site or near-site medical services* 37% Occupational health clinic Primary care clinic 20% 14% 24% 9% 27% 20,000 + *Based on employers with 500 or more employees Use strategy to control cost / improve workforce health & productivity* 20,000 + High-performance networks 13% 12% 24% Data warehouse 27% 24% 61% Collective purchasing for medical or Rx 20% 24% 25% Value-based plan design 12% 9% 25% *Based on employers with 500 or more employees 2010 MERCER NATIONAL SURVEY OF EMPLOYER-SPONSORED HEALTH PLANS 8
PREFERRED PROVIDER ORGANIZATION (PPO) / POINT-OF-SERVICE PLANS (POS) Average PPO / POS cost per employee, for active employees $17,641 $15,937 2009 2010 $10,305 $10,936 $10,232 $10,893 $8,051$8,691 ** ** Note that CCSF reports 2010/2011 and 2011/2012 rates Physician visit cost-sharing In-network physician visit cost-sharing No. Ca. 500+ % requiring copay 88% 76% 72% N/A % requiring coinsurance 17% 29% 37% Yes No cost-sharing is required 1% 3% 1% N/A Median copay amount $20 $20 $20 N/A Out-of-network physician visit cost-sharing No. Ca. 500+ % requiring copay 15% 16% 7% N/A % requiring coinsurance 84% 91% 95% Yes No cost-sharing is required 2% 0% 1% N/A Median coinsurance amount 30% 35% 40% 50% Preventive care coverage No. Ca. 500+ Covered 100%, not subject to cost-sharing 33% 41% 57% Yes Covered 100% after PCP cost-sharing 24% 18% 23% N/A Covered the same as other benefits 40% 32% 13% N/A Covered some other way 3% 9% 7% N/A 2010 MERCER NATIONAL SURVEY OF EMPLOYER-SPONSORED HEALTH PLANS 9
PREFERRED PROVIDER ORGANIZATION (PPO) / POINT-OF-SERVICE PLANS (POS), CONTINUED Deductibles Individual deductible % requiring for in-network services 65% 77% 81% Yes Median in-network deductible $300 $300 $400 $250 % requiring for out-of-network services 98% 88% 100% Yes Median out-of-network deductible $500 $500 $600 $250 Family deductible % requiring for in-network services 65% 80% 80% Yes Median in-network deductible $900 $900 $1,000 $750 % requiring for out-of-network services 96% 88% 98% Yes Median out-of-network deductible $1,075 $1,500 $1,500 $750 Out-of-pocket maximums for individuals Median for in-network services $2,000 $2,300 $2,350 $3,750 Median for out-of-network services $3,000 $5,700 $4,000 $7,500 PPO / POS funding method Conventionally insured Experience-rated Self-funded with stop-loss Self-funded without stop-loss 8% 8% No. Ca. 500+ 9% 15% 20,000 + 2% 3% CCSF 100% 26% 35% 58% 50% 26% 61% 2010 MERCER NATIONAL SURVEY OF EMPLOYER-SPONSORED HEALTH PLANS 10
HEALTH MAINTENANCE ORGANIZATION (HMO) Average HMO cost per employee, for active employees $9,779 $10,338 $9,378 $9,990 $9,853 $8,817 $11,647 $11,731 2009 2010 ** ** Note that CCSF reports 2010/2011 and 2011/2012 rates HMO funding method Insured community-rated Insured experience-rated Self-funded No. Ca. 500+ 20,000 + CCSF 31% 10% 7% 34% 19% 31% 100% 59% 59% 50% Average % of employees enrolled in HMO* *among employers offering HMO(s) 60% 52% 34% 96% HMO copays and deductibles PCP office visit copay (median) $15 $15 $20 $20 Emergency room visit copay % requiring emergency room visit copay 95% 86% 87% Yes Median copay amount $75 $75 $100 $100 Inpatient hospital deductible % requiring hospital deductible 48% 55% 67% Yes Median deductible amount $250 $250 $250 $100/$150 Outpatient surgery deductible % requiring outpatient surgery deductible 30% 21% 40% Yes Median deductible amount $100 $125 $150 $100 2010 MERCER NATIONAL SURVEY OF EMPLOYER-SPONSORED HEALTH PLANS 11
HSA-ELIGIBLE CONSUMER-DIRECTED HEALTH PLANS (CDHP) Average HSA-eligible CDHP cost per employee, for active employees $9,634 $9,575 2009 2010 $6,143 $6,991 $7,067 20,000 + $0 Average % of eligible employees enrolled in HSA-eligible CDHP when offered as an option 20,000 + 15% 8% 14% Plan design Employee-only coverage 20,000 + % of employers making an account contribution 79% 67% 63% Median employer contribution to account* $600 $1,200 $500 Median deductible for overlaying insurance $1,750 $1,875 $1,500 Median out-of-pocket maximum $3,000 $3,000 $3,100 Family coverage Median employer contribution to account* $800 $2,450 $900 Median deductible for overlaying insurance $3,500 $4,000 $3,000 Median out-of-pocket maximum $6,000 $6,750 $7,400 Cost-sharing for in-network physician visits % requiring copay 8% 0% 3% % requiring coinsurance 69% 100% 97% Median coinsurance amount 20% 20% 20% *among employers making an account contribution Plan features 20,000 + Preventive drugs covered at separate, higher benefit level 14% 17% 31% Offer a limited-purpose FSA in conjunction with HSA 64% 50% 65% Funding schedule for employer account contributions 36% 36% 75% 35% 36% 27% 25% 26% Fully pre-fund Fund every paycheck Fund monthly or on other schedule 0% 20,000 + 2010 MERCER NATIONAL SURVEY OF EMPLOYER-SPONSORED HEALTH PLANS 12
HRA-BASED CONSUMER-DIRECTED HEALTH PLANS (CDHP) Average HRA-based CDHP cost per employee, for active employees 2009 2010 $8,880 $8,907 $9,080 $9,938 Average % of eligible employees enrolled in HRA-based CDHP when offered as an option 20,000 + 23% 25% 39% Plan design Employee-only coverage 20,000 + Median employer contribution to account $450 $750 $500 Median deductible for overlaying insurance $1,500 $1,500 $1,500 Median out-of-pocket maximum $3,000 $2,500 $3,000 Family coverage Median employer contribution to account $840 $2,000 $1,500 Median deductible for overlaying insurance $3,000 $3,500 $3,000 Median out-of-pocket maximum $6,000 $5,500 $7,250 Cost-sharing for in-network physician visits % requiring copay 33% 0% 11% % requiring coinsurance 33% 100% 86% Median coinsurance amount 25% 10% 20% 2010 MERCER NATIONAL SURVEY OF EMPLOYER-SPONSORED HEALTH PLANS 13
PRESCRIPTION DRUG (RX) BENEFITS* Annual change in cost per employee for prescription drug benefits 9.1% 9.0% 6.9% 6.8% At last renewal Expected at next renewal 3.7% 4.6% 20,000 + Employee cost-sharing requirements for prescription drug plans Retail Same level for all drugs 4% 0% 4% N/A 2 levels: generic, brand 10% 21% 6% N/A 3 levels: generic, formulary, non-formulary 73% 76% 63% Yes 4 or more levels 10% 0% 24% N/A Use coinsurance for 1 or more drug categories 14% 9% 55% N/A Mail-order Same level for all drugs 4% 3% 6% N/A 2 levels: generic, brand 18% 22% 5% N/A 3 levels: generic, formulary, non-formulary 66% 72% 71% Yes 4 or more levels 7% 0% 13% N/A Use coinsurance for 1 or more drug categories 8% 13% 45% N/A Copayments in prescription drug plans Average copayment among plans with 3 payment levels Retail Generic $9 $10 $10 $5 Brand-name formulary $26 $24 $27 $20 Brand-name non-formulary $42 $43 $48 $45 Mail-order Generic $17 $19 $19 $10 Brand-name formulary $49 $51 $59 $40 Brand-name non-formulary $82 $85 $102 $90 Drug plan features among employers with 1,000+ employees 20,000 + Mandatory generics (DAW 1&2) 19% 22% 30% Mandatory generics with physician override (DAW 2) 41% 30% 25% Mandatory mail-order 9% 11% 22% Promote the use of OTC alternative with higher cost share or benefit exclusion for select categories of drugs 32% 19% 28% *Offered to employees enrolled in the largest medical plan of any type 2010 MERCER NATIONAL SURVEY OF EMPLOYER-SPONSORED HEALTH PLANS 14
HEALTH MANAGEMENT PROGRAMS* Disease management programs offered Asthma / COPD 62% 76% 82% Yes Cancer 50% 51% 48% Yes Congested heart failure (CHF) 53% 65% 75% Yes Coronary artery disease (CAD) 54% 68% 77% Yes Depression 39% 38% 44% No Diabetes 76% 84% 90% Yes Hypertension 55% 49% 61% No Low-back pain 30% 35% 51% No Obesity 37% 46% 49% No Rare disease 24% 24% 23% No Any disease management program 76% 84% 92% Yes Other health management programs offered Behavior modification 58% 63% 70% Yes Case management 89% 77% 94% Yes End-of-life case management 53% 27% 55% Yes Health advocate services 51% 32% 61% No Health risk assessment (HRA) 85% 69% 85% Yes Health website 94% 83% 91% Yes Nurse advice line 82% 89% 91% Yes Disease / health management programs are offered: Through health plan, standard services only 79% 76% 47% Yes Through health plan, optional services 23% 29% 47% No Through one or more specialty vendors 13% 21% 43% No Program participation rates 20,000 + Health risk assessment (% eligible employees) 43% 23% 35% Disease management (% identified persons actively engaged) 26% 17% 20% Behavior modification (% identified persons actively engaged) 26% 12% 25% *Offered to employees enrolled in the largest medical plan of any type 2010 MERCER NATIONAL SURVEY OF EMPLOYER-SPONSORED HEALTH PLANS 15
HEALTH MANAGEMENT PROGRAMS, CONTINUED Health management incentives / penalties Use incentives or penalties to encourage participation in: Health risk assessment (HRA), when offered 27% 26% 48% Yes Disease management, when offered 10% 0% 23% No Behavior modification, when offered 14% 0% 34% No Type of HRA incentive used Cash / gift cards 47% 50% 34% Yes Financial contribution to HRA, HSA, FSA 0% 33% 25% No Lower premium contributions 21% 17% 46% No Premium contribution varies based on employees' smoker status 5% 0% 28% No SPECIAL COVERAGES Behavioral health MH / SA benefits provided by medical plan 93% 84% 80% Yes MH / SA carved out, provided by a specialty vendor 7% 14% 20% No MH / SA benefits not provided 0% 3% 0% No Provide employee assistance program 92% 89% 93% Yes Provide coverage for autism 88% 92% 78% Yes Response to 2008 Mental Health Parity and Addiction Equity Act No change, MH/SA benefits were on par with medical before act 49% 45% 28% No No change, exempt from act 10% 6% 2% No Removed day / visit / episode / dollar limits for MH / SA 36% 45% 63% Yes Decreased MH / SA copay or coinsurance 7% 18% 20% No Add / improve utilization, med / psych integration or DM 7% 9% 8% Yes Other change 10% 6% 17% No DENTAL BENEFITS Average cost of dental coverage, per employee $1,168$1,186 $1,583$1,652 2009 2010 $739 $765 $730 $752 ** ** Note that CCSF reports 2010/2011 and 2011/2012 rates 2010 MERCER NATIONAL SURVEY OF EMPLOYER-SPONSORED HEALTH PLANS 16
DENTAL BENEFITS, CONTINUED Type of dental plan offered 62% 57% 48% 43% 35% 38% 36% 28% 24% 1% 0% 3% CCSF provides a Passive PPO and a Dental HMO Active PPO Passive PPO Dental HMO Discount card Dental plan design* Median deductible $50 $50 $50 $0 Median maximum annual benefit $1,250 $1,850 $1,500 $2,500 Includes lifetime maximum benefit for orthodontic services (% of employers) 87% 93% 96% Yes *Among employers with dental PPOs or fee-for-service plans OTHER BENEFITS Voluntary insurance benefits offered Vision 57% 64% 79% Yes Disability 80% 78% 82% Yes Accident 48% 61% 55% N/A Whole / universal life 47% 42% 46% N/A Cancer / critical illness 46% 25% 30% N/A Hospital indemnity 20% 3% 9% N/A Long-term care 34% 53% 58% N/A Auto / homeowners 7% 25% 44% N/A Travel 3% 28% 25% N/A Flexible spending accounts (FSA) Health care FSA % offering health care FSA 89% 83% 95% Yes Average employee participation 19% 27% 17% N/A Dependent care FSA % offering dependent care FSA 83% 83% 92% Yes Average employee participation 5% 7% 4% N/A 2010 MERCER NATIONAL SURVEY OF EMPLOYER-SPONSORED HEALTH PLANS 17
RETIREE HEALTH CARE Offer retiree coverage* To pre-medicare-eligible retirees To Medicare-eligible retirees 72% 60% 37% 29% 46% 38% 20,000 + *to most retirees, on an ongoing basis (new hires will be eligible) Contribution requirements for retiree-only coverage Pre-Medicare-eligible retirees Employer pays all Cost is shared Retiree pays all No. Ca. 500+ 20,000 + CCSF 35% 19% 38% 31% 37% 4% 100% 59% 47% 31% Medicare-eligible retirees No. Ca. 500+ 20,000 + CCSF 17% 11% 100% 37% 42% 42% 38% 46% 17% 52% 2010 MERCER NATIONAL SURVEY OF EMPLOYER-SPONSORED HEALTH PLANS 18
RETIREE HEALTH CARE, CONTINUED Average retiree contribution* as a percent of premium, when cost is shared Pre-Medicare-eligible retirees 29% 53% 39% 7% Medicare-eligible retirees 27% 15% 42% N/A *for retiree-only coverage Current approach to providing Medicare Part D prescription drug benefit Receive 28% subsidy for all / most covered retirees 44% 56% 64% 100% Offer a plan that wraps around a PDP 16% 22% 6% N/A Contract with vendor to offer PDP or MA-PD plan 4% 11% 5% 100% Contract with CMS to become a PDP 0% 0% 2% N/A Terminated drug coverage, continue to offer medical 4% 0% 6% N/A Continue to provide drug coverage through standard plan and do not receive subsidy 33% 11% 14% N/A Expect to continue offering* coverage to new hires for the next 5 years *Among employers that currently offer retiree health benefits to new hires 82% 79% 71% Yes Provide retirees a subsidy to purchase health coverage independently* Pre-Medicare-eligible retirees 0% 9% 9% No Medicare-eligible retirees 3% 24% 9% No *Among employers that do not offer retiree benefits to new hires 2010 MERCER NATIONAL SURVEY OF EMPLOYER-SPONSORED HEALTH PLANS 19
DEFINITIONS EMPLOYER PROFILE A consumer-directed health plan eligible for a Health Savings Account is a high-deductible health plan with an employee-controlled account. Employer contributions are optional. Account funds roll over at year end and are portable. A consumer-directed health plan with a Health Reimbursement Account is a health plan with an employerfunded spending account. Account funds may roll over at year end, but are not portable. TOTAL COST, PPO / POS, HMO, HRA, HSA Total health benefit cost is the total gross cost for all medical, dental, prescription drug, MH / SA, vision and hearing benefits for all covered active employees and their dependents divided by the number of enrolled employees. Total gross annual cost includes employee contributions but not employee out-of-pocket expenses. Medical plan cost is the total gross cost for medical plans divided by the number of enrolled employees. Prescription drug, mental health, vision and hearing benefits for all active employees and their covered dependents are included if part of the plan. Dental benefits, even if a part of the plan, are not included in these costs. ELIGIBILITY, ELECTION A mini-med or limited plan is a health insurance plan that provides far lower benefits than the typical comprehensive major medical plan. The annual maximum amount payable typically ranges from $1,000 to $50,000. HEALTH REFORM The 2011 PPACA requirements include coverage for children up to age 26 and the elimination of lifetime and most annual maximums. PPACA s shared responsibility provision will require employers to provide coverage to employees working on average 30 or more hours per week in a month, or else face penalties, starting in 2014. Under PPACA's affordable coverage provision, employers must offer at least one health plan for which the employee s premium contribution does not exceed 9.5% of the employee s household income or else be subject to penalties. Starting in 2018, health benefit coverage that costs more than $10,200 for an individual employee or $27,500 for dependent coverage will be subject to a 40% excise tax. SPECIAL COVERAGES The federal 2008 Mental Health Parity and Addiction Equity Act requires that if mental health and substance abuse benefits are offered that they provide the same level of coverage as the medical benefit.