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Wellness Grants? Yes, more to come…

Iowa Employer Benefits StudyDid you know that under the ACA (health reform law), Wellness Grants will be awarded to small employers (those with less than 100 employees who work a minimum of 25 hours per week)? In addition, these grants are intended to provide for comprehensive workplace wellness programs. Employers are eligible to receive these grants only if they did not provide a workplace wellness program prior to the enactment of health reform on March 23, 2010.

In our 2011 Iowa Employer Benefits Study©, we asked Iowa employers (those with fewer than 101 employees) if they were aware of the new Wellness Grant Program that could help subsidize the cost of starting a wellness program.

Any idea on the percentage of Iowa employers aware of this program?  You might be surprised…see below.

 Iowa Employer Benefits Study

Based on these results, a great deal of education lies ahead on how employers can apply (and qualify) for such grants. More on wellness programs in Iowa in upcoming blogs…I promise!

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!

To learn more, we invite you to subscribe to our blog.

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.