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Iowa Employer Benefits Study© Returning in 2018

Many of you are aware that I took last year ‘off’ from conducting the annual Iowa Employer Benefits Study©, and instead, focused on how Iowan’s perceive the care they receive from Iowa caregivers – now known as the Iowa Patient Safety Study©. This off-the-road ‘excursion’ allowed me to focus on a subject (patient safety) that I’ve been keenly engaged in since the 1990s.

As a benefits consultant, employers would often ask me about what can be done to keep medical costs more affordable. Avoiding harmful medical errors was certainly one approach to help cross the cost ‘chasm,’ in addition to increasing the quality-of-care we all expect to receive, but often do not. Needless-to-say, we must not take our eyes off this ongoing public health crisis.

This year, we will undertake our 19th annual employer benefits study. Unlike previous surveys, where we have typically alternated years on surveying certain benefits (e.g. including group life, short-term and long-term disability coverages, but excluding paid time off and traditional leave components), we will include ALL key benefits offered by Iowa employers in the 2018 survey, including:

  • Group Life
  • Group Short-Term Disability
  • Group Long-Term Disability
  • Paid Time Off (PTO) and components
  • Traditional Leave components
  • Group Dental Coverage
  • Consumer-Driven Health Care components
  • Group Health Coverage
  • Do Employers Offer:
    • Health insurance for domestic partners
    • Retiree health insurance, pre-65 years
    • Retiree health insurance, 65+ years
    • Vision Coverage
    • Flextime
    • Employee premiums deducted pre-tax
    • Dependent care flexible spending account
    • Medical care flexible spending account
    • Wellness programs

As in the past, we plan to randomly survey at least 1,000 Iowa employers from a variety of sizes and industries. Doing so will allow us to benchmark employers against similar employers. As a side note, I was amazed at just how many employers reached out to me asking about the 2017 study and whether they could participate in the 2018 survey. This study appears to have a lasting presence and value for many Iowa employers!

If you happen to be an employer who was randomly-selected to participate in this year’s survey, we would greatly appreciate you taking the time to share your confidential data with us. Please know that your information will only be used on an aggregate basis and combined with data from other participating employers.

Though I was never really ‘gone’ from performing the benefit study, it is great to be ‘back’ working on a new survey that will provide insight on what changes have taken place since our last study in 2016.

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Was Grandma Ahead of Her Time?

It’s early Friday morning, a day that marks the beginning of a long holiday weekend, which will culminate on Monday – Christmas Day. In my office, I’ve just poured my third cup of java and started perusing newly-arrived emails from last night and this morning. One particular email caught my eye and I naturally opened it to learn more.

The content was about…coffee.

Grandma and Coffee

The aroma and taste of coffee, at least for me, became an acquired and ‘necessary’ habit over the years, beginning while I was in college. Late night cramming required that I not doze during the precious remaining critical hours prior to the exams. Caffeinated coffee became my best late-night friend.

The origin of my eventual coffee ‘addiction’ can be traced back to my grandparent’s farm – an acreage north of Detroit Lakes, MN. During the summer months in the late 1960s, my siblings and I would have the opportunity to spend time at the farm helping with chores and experience rural living – working in the garden, hitching a ride on a tractor, playing by the slough, and enjoying some of the best home-grown beef and vegetables at dinner. Without a doubt, the time spent on the farm provided some of my best childhood memories!

To begin their day, I noticed that my grandparents enjoyed a hot beverage that was prepared on their wood-burning stove. While percolating, the aroma of the black brew seemed somewhat odd to me, but my grandparents relished the benefits coffee provided to them when beginning their day. As an impressionable boy, I remember asking Grandma if I could have a sip of this ‘black magic,’ and she, very prudently, complied. I remember her telling me, “Someday, you may like the taste of this, David!” The taste, I quickly learned, was not what I had expected, and that was my first and last sip of coffee – until my college days.

Recent Findings about Coffee

The email I received about coffee came from Harvard T.H. Chan School of Public Health. According to a study recently published by Harvard, people with colorectal cancer (CRC) who drank at least four cups of coffee per day after their diagnosis had a ‘significantly lower’ risk of early death – either from this cancer or any cause – than those who didn’t drink coffee. According to the American Cancer Society, CRC is the second-leading cause of cancer in the U.S.

Just four days earlier, I had successfully completed my fourth colonoscopy since 2003. Needless to say, I instinctively poured myself another cup of java and continued reading.

Previous evidence suggested that coffee may help lower the risk of mortality, in addition to several chronic diseases, possibly due to its ability to fight inflammation and insulin resistance. Coffee contains anti-carcinogenic compounds that can benefit us in other ways. Although this newest finding cannot claim causality between drinking coffee and reduced mortality risk, the findings are nevertheless encouraging and are worth further exploration.

My grandparents have long since passed away, but what they shared with their grandson some 50 years ago continues to add to the priceless memories I have of them today. Without realizing it, perhaps grandma was ahead of her time regarding coffee’s taste and health benefits!

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Employer-Sponsored Health Insurance – An Impending Decline?

Americans partake in a variety of traditions. We throw tailgate parties, both before and after football games. During Halloween, our tradition involves children going door-to-door begging for candy, using the words, “Trick or treat!” Before Thanksgiving, our president and many state governors will pardon hand-selected turkeys from becoming the next meal. After Thanksgiving, Americans find the energy to start their annual Christmas gift list and go shopping on Black Friday…and/or wait until Cyber Monday.

During this time of year, millions of Americans will also perform the ritual of selecting a health plan for the new year – based on how much the new insurance plan will now cost them. In addition to the increased insurance premiums, Americans are forced to wrestle with climbing deductibles, copayments and out-of-pocket maximums. In some cases, working families are spending more of their income on insurance coverage that may not protect them compared to insurance plans from yesteryear.

Employer-sponsored health insurance is the largest-single source of health coverage in the U.S. – covering more than 150 million American workers and their dependents. By comparison, Medicaid, the second-largest source of coverage, insures about 70 million Americans, or less than half of job-based coverage. Medicare, health coverage for our seniors, covers 50 million Americans. Finally, the other 17 million American who have health coverage are enrolled in the Affordable Care Act marketplaces and individual markets offered in each state.

Underinsured

As mentioned, adults with job-based health coverage are seeing higher deductible and out-of-pocket costs compared to prior years. In fact, relative to their income, a recent Commonwealth Fund report has found that working Americans are effectively “underinsured” – they spent more than 10 percent of their income, excluding premiums, on healthcare; spent more than five percent if they were low income; or they had a medical deductible that exceeded five percent of their income. According to the report, this is more than double what it was in 2003, and up sharply from just three years ago (2014).

The major factor for the rise in the underinsured is that employer plans (both small and large employers) are increasingly fighting rising healthcare costs by super-sizing their deductibles to keep the cost of premiums relatively reasonable. Commonwealth estimates that the number of ‘underinsured’ American adults (ages 19 to 64) is 41 million, or 28 percent of U.S. adults. This number is double the rate in 2003 and is up by 10 million since 2014.

In the U.S., health spending increased by 4.3 percent in 2016, outpacing overall spending for goods and services, which increased by 2.8 percent that same year. Additionally, healthcare costs continue to grow faster than American workers’ wages. Over time, this cost pressure recedes the workers’ paychecks, which negatively impacts other purchases workers need or desire to make. In Iowa, as an example, the average deductibles offered by employers has increased drastically, up 185 percent between 2004 and 2016. Using a linear regression equation, the average single and family deductibles could climb to $2,000 and $4,500 respectively, by the year 2020.

Despite being large purchasers of healthcare services for employees and their dependents, employer-sponsored plans run the long-term risk of being unable to control rising healthcare costs – which can exacerbate the rising discontent workers have of paying more but getting less in return. Unfortunately, employers seldom work together to increase their leverage with health providers – primarily due to employers lacking the staff and expertise to combat the complexities of healthcare markets. First and foremost, employers are in the business of focusing on their own core products and services and the associated challenges found within the markets they operate. By fiat, insurance companies continue to play the role of the purchaser on behalf of most employers and their employees.

Employee Discontent?

What will the future hold if more workers become dissatisfied about their receding take-home wages? Dr. David Blumenthal, President of the Commonwealth Fund, recently wrote: “With that discontent will likely come increased calls for dramatic reforms in our health insurance system, reforms that will better protect the millions of Americans who have long depended on protections they receive in the workplace. Some of these discontented Americans may become more receptive to government interventions in private health insurance markets.”

Assuming this discontentment is real, and it appears to be, employers will need to find new approaches to apply additional leverage when making future health coverage purchasing decisions. Being a reluctant purchaser may only prolong the inevitable. For employers, there’s no better time than the present to engage in activities that will provide value for their workforce. Otherwise, external cost pressures may eventually jeopardize health coverage at the workplace.

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