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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.

Coming Soon!
2012 Iowa Employer Benefits Study©

David P. Lind BenchmarkWe are very pleased that over 1,200 Iowa employers have responded to our 2012 Iowa Employer Benefits Study©, which is the highest response in the 14 years of performing this survey! To put this response into meaningful perspective, the 2012 Kaiser/HRET Employer Health Benefits Survey, a highly-regarded national survey, reported 604 respondents in the Midwest Region that consists of 12 states (including Iowa).  In other words, our survey has twice the respondents…in just ONE state! This means that we are able to accurately report the specific benefits offered by Iowa employers using extremely credible data.

In addition to having this phenomenal response, we will unveil new and exciting enhancements with this year’s study in mid-October. Some of the changes include:

  • The Overall Summary report of the 2012 Iowa Employer Benefits Study© will now be available in an electronic format, allowing employers to access this report on our website. This summary will be very similar to the printed summaries produced in the past. Printed studies will no longer be available.
  • Employers who have responded to the 2012 Survey will be sent an invitation in mid-October to download this report using a specific pass code.
  • Employers that have not participated in the 2012 Survey will be able to download this Overall Summary report.  A fee will be required to access this report.
  • Separate industry reports will also be available for purchase. The industries we report on include:
    • Manufacturing
    • Retail
    • Finance and Insurance
    • Healthcare and Social Services
    • State and Local Governments (including Public Education)
    • All Other Industries (included in the Overall Report only)

In addition to the above enhancements, we’ll be introducing a new benchmarking tool during the first quarter 2013, allowing employers to compare their specific benefit offering with other Iowa employers. The benchmarking tool is being developed with simplicity and intuitiveness in mind. Please visit our website frequently to learn when this tool will be available.

Learn when all six reports will be available in October by subscribing to our blog.