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Numbers Within A Number

2012 Iowa Employer Benefits StudyAs reported in last week’s blog and Press Release, Iowa employers reported receiving an average seven percent increase to their health insurance from 2011 to 2012. Despite this decelerating increase, smaller Iowa employers continue to receive higher increases than their larger counterparts. Without exception, this variance has occurred every year since our study began in 1999.

It is with larger increases that the smaller employer is forced to make major adjustments to their health insurance plan designs – such as migrating to larger deductibles and out-of-pocket maximums. By increasing the cost-sharing arrangement with employees, the smaller employer is able to find some relief in the premiums they pay to insurance companies. However, each subsequent year, the smaller employer receives higher increases again. This vicious cycle is difficult not only for the employer, but to their employees and family members.

Unlike the small employer, larger employers have more options available to combat escalating premium adjustments. Large employers have:

  • More leverage to negotiate with insurance vendors
  • Greater ability to self-insure their health plan (when it makes sense) by utilizing many different financial tools
  • Personnel to help implement, promote and monitor Wellness Programs
  • Access to claims data allowing the employer to analyze key medical issues inherent within the organization

Employers offer many different types of health plans. The preferred provider organization (PPO) is the most frequently offered plan for all employer size categories here in Iowa. In 2012, over 62 percent of Iowa employers offered PPO plans. Employers with PPO plans reported receiving the lowest premium increase compared with other plans offered by Iowa employers. The average increase reported by employers with PPO plans was 6.5 percent. Interestingly, employers with consumer-driven plans with health savings accounts reported receiving an average increase of 10.5 percent.

Finally, employers located in rural parts of the state have reported lower increases to their premiums (6.1 percent) when compared to their urban counterparts (7.7 percent). Part of this reason, I believe, may be due to rural employers offering PPO plans more often (63.3 percent) than do urban employers (61.8 percent). The cost of rural care can be less than in the state’s metropolitan areas.

2012 Iowa Employer Benefits Study

 

Statistics can be interesting. When digging down deeper, we learn many fascinating things not readily found at the surface.  More to come!

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Iowa Employer Health Premiums Up 7% in 2012

David P. Lind BenchmarkToday we issued our Press Release on the results from our 14th annual Iowa Employer Benefits Study©. As you might imagine, there is a wealth of data coming from this years’ survey, but perhaps the most striking number for me is also the headline number – 7 percent.

This number is BIG because it is…well, the SMALLEST number we have observed in the last 14 years. We have been surveying employers since 1999 (2001 was the first year we began asking questions on premium adjustments). With this relatively “tame” increase, Iowa employers reported making the following changes to their health plans during the past 12 months:

  • Increased deductibles (20 percent of respondents)
  • Raised out-of-pocket maximums (16 percent)
  • Increased office visit co-payments (12 percent)
  • Increased prescription drug co-payments (11 percent)
  • Changed insurance companies (9 percent)
  • Reduced pay raises or bonuses (5 percent)
  • Began wellness program initiatives (5 percent)

Since 1999, the annual single premium has increased by 164 percent (up $3,392), while the family premium increased by 146 percent (up $8,049). From 2011 to 2012, the premium for single coverage on all types of medical plans (HMO, PPO, Indemnity, CDHP) increased by eight percent, while the family premium increased slightly by two percent.

Overall, employee contributions for single medical coverage is 20 percent of the total single medical premium ($1,065 annual). For family coverage, the average Iowa employee contributes 34 percent of the family premium ($4,657 annual). Last year, the contribution level was 18 percent and 33 percent, respectively.

The summary report will be published on our website within the next two weeks.

The above information is just a small fraction of our survey results. To learn more, we invite you to stay in touch by subscribing to our blog.

DNA and the Iowa Employer

2012 Iowa Employer Benefits StudyDNA provides us with amazing information.

DNA, or deoxyribonucleic acid, is the hereditary genetics in humans and almost all other organisms. In other words, DNA contains the biological instructions that make each species unique from one another. Different, uncommon, unusual – I think you get the point.

In a certain way, that is how I view the findings in the Iowa Employer Benefits Study©. Each organization exudes a unique DNA like no other organization. The DNA found in each organization derives from the following influences:

  • “Culture” of employer
  • “Industry” in which the employer operates
  • “Location” or “Community” where the employer resides
  • “Size” of employer – specifically the number of employees
  • “Type of organization” – private, public, for-profit, not-for-profit, etc
  • “Bargained or non-bargained” employees

When we sampled Iowa employers this year, instead of obtaining vials of blood, we asked a number of key questions that would help us better understand the employee benefits offered by each organization. From this data, we were able to map out the tendencies that are embedded within each organization, whether a result of employer size, industry, location or type of organization. This information becomes the DNA of Iowa organizations.

As mentioned in my last blog, we surveyed 1,206 Iowa employers in our 2012 Study, an all-time record high for us (the previous high was 985 in 2010). The number of respondents from each key Iowa industry are as follows:

  1. Manufacturing – 209 respondents
  2. Retail – 218 respondents
  3. Finance – 146 respondents
  4. Health and Social Services – 219 respondents
  5. Government and Public Education – 200
  6. All Other Industries – 214

Of course, we also look at sub-industries within each of the key industries to search for “DNA clues” on employee benefit tendencies. Some of the DNA observed from this study includes:

  • Colleges and Hospitals are tied with offering Dental coverage most frequently (94 percent), while only 26 percent of employers in the Construction industry offer this benefit.
  • Wholesale sector employers reported having the highest family health plan deductible ($3,661), while Colleges reported having the lowest ($1,707).
  • Large employers (250+ employees) are three times more likely to offer consumer-driven health plans than their smaller counterparts.
  • 401K plans are offered by 55 percent of Iowa organizations, with the Insurance sector offering this retirement plan more often (88 percent), while Non-profits are least likely to offer these plans (21 percent).
  • 27 percent of Iowa organizations offer Flextime, with the Insurance sector leading the offering at 76 percent. Construction lags on offering this benefit (8 percent).
  • Urban employers reported higher health premium increases than their Rural counterparts. (This is a tease for you to check back with us to learn just how much the rates have increased in 2012!)

During the next week, we will be releasing the key results of the 14th annual Iowa Employer Benefits Study©. In addition to the Press Release, we will have the results of the Overall Study available at this website. In early November, we will publish results from the following industries: Manufacturing, Retail, Finance, Health Services and Public sector.

Many thanks to those 1,206 Iowa employers “who gave blood” this year!

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