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Employers are making plan design changes in response to unabated health care cost inflation and changes from the health care reform law, a study reveals.
Employers surveyed expect costs for employee health care benefits to increase 7% this year, bringing average plan costs to
In fact, 81% of employers reported that PPACA already has increased the administrative burden on their human resource departments, while 80% expect to see some impact from an excise tax imposed on the most costly plans, unless they make design changes.
Beginning in 2018, a 40% nondeductible tax, known as the “Cadillac tax,” will be levied on health plan premiums that exceed
To curb health plan costs, employers are turning to consumer-driven plans and financial incentives to encourage greater participation in wellness programs, the survey found.
Although 53% of employers already had CDHPs in place in 2011, roughly the same percentage as last year, another 27% plan to begin offering them in 2012, according to the survey. CDHPs cost
Employers also are trying to improve CDHP takeup rates by offering employees significant reductions in premium contributions. In 2011, 56% of employers set their employees’ CDHP premium contributions at least 20% lower than those for PPO plans, and 26% of employers more than halved employee contributions compared with other plan types.
While only 6% of employers offered outcome-based financial incentives in 2010, an additional 7% introduced such programs this year, and 33% plan to add such incentives next year, the survey found.
“One of the critical changes we’re seeing is the movement away from engagement and participation to outcomes-based incentives,” said
The PPACA provision that allows employers to pay an incentive valued at up to 30% of the cost of single coverage will provide even greater opportunity for employers to use financial incentives as a way to manage health care costs, she added.
Copyright 2011 Crain Communications Inc. All Rights Reserved.