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2013 Study Results: Iowa Employers Report 9% Increase in Health Premiums

September 12, 2013 By

David P. Lind BenchmarkToday, we issued our Press Release on the results from our 15th annual Iowa Employer Benefits Study©. As you might imagine, there is a wealth of data coming from this year’s survey, but as always, one of the most newsworthy finding is the headline number – 9 percent.

 

Average Health Insurance Rate Increases in Iowa 

It is important to distinguish how this increase is determined each year. The 9 percent increase is an average that factors in employers receiving no rate change, an increase or decrease in their premiums. This number represents the average increase in premiums employers received PRIOR to making design changes to their medical insurance plans – such as increasing cost-sharing arrangements with employees. After altering the plan design, the net increase over the past year was a modest three percent for single premiums and under five percent for family premiums.

How does this net increase compare to the national average? According to the 2013 Employer Health Benefits Survey conducted through the Kaiser Family Foundation/Health Research & Educational Trust (HRET), this average is quite similar to the five percent increase on single coverage and four percent on family coverage.

We have been surveying employers since 1999 (2001 was the first year we began asking questions on premium adjustments). With this relatively “tame” increase (compared to prior double-digit increases between 2001 and 2010), Iowa employers reported making the following changes during the past 12 months:

  • Passed some or all of the increased costs to the employees (57 percent)
  • Absorbed the entire cost increase (33 percent)
  • Increased deductibles (20 percent)
  • Raised out-of-pocket maximums (10 percent)
  • Increased office visit co-payments (8 percent)
  • Increased prescription drug co-payments (7 percent)
  • Changed insurance companies (8 percent)
  • Reduced pay raises or bonuses (6 percent)
  • Offered Consumer-Driven Health Plans (5 percent)
  • Began wellness program initiatives (4 percent)

Since 1999, the annual Iowa single premium has increased by 171 percent, while the family premium increased by 158 percent. By comparison nationally, over that same time period, Kaiser reported increases of 168% and 182%, respectively.

Over the course of 15 years, employee contributions have increased by 117 percent for single coverage and 121 percent for family coverage. These numbers are more staggering when compared to the average weekly wage (for all industries), which increased by only 37.5 percent between 2001 and 2012 (Source: Iowa Workforce Development).

The overall percentage of Iowa employers offering health coverage dropped to 77 percent from 81 percent in the 2012 study. This four percent drop is considered statistically meaningful. A greater percentage of smaller employers with fewer than 20 employees reported not offering health coverage in the 2013 survey. This number will require additional scrutiny in future studies.

Iowa Employers Offering Health Insurance

Employer Attitudes on Health Reform
A number of questions relating to the Affordable Care Act (ACA) were directed to employers during this year’s survey. One key finding is that less than two percent of Iowa employers with over 50 employees indicated they would discontinue offering health coverage and, instead, incur the $2,000 penalty per employee. It must be noted that employers responded to these questions PRIOR to learning the employer mandate was delayed until 2015. This response from employers, however, does provide a glimpse into 2015 when the mandate takes hold.

When asked about the likelihood of discontinuing health coverage in the next three years due to health reform requirements, only 2.6 percent indicated they would not offer coverage (all coming from smaller employers). No employer with at least 250 employees reported they would drop coverage.

Plan Design Attitudes
Iowa employers were also asked a series of questions about reducing health care costs now and during the next five years. Over 42 percent of employers currently encourage the use of high-quality hospitals and physicians. This is accomplished either through their health insurance providers or by lowering employee cost-sharing to provide incentives to use designated health providers. Another 11 percent plan to include this approach within the next five years.

Over 11 percent of employers currently reward employees with reduced premiums or lower cost-sharing for achieving certain health outcomes, such as improved Body Mass Index (BMI) or lower cholesterol, while 19 percent plan to encourage this approach during the next five years.

The complete 2013 Iowa Employer Benefits Study© will be available for purchase and download in the near future.

The above information is just a small fraction of our survey results. To learn more, we invite you to subscribe to our blog.

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DNA and the Iowa Employer

October 10, 2012 By

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!

To learn more, you can subscribe to our blog.

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New Beginnings for Benchmarking Benefits in Iowa

April 25, 2012 By

David P. Lind BenchmarkSince 1999, my firm has surveyed Iowa employers to learn about the benefits they offer to their employees. The “Iowa Employer Benefits Study” has revealed many key facts that allow employers, regardless of size and industry, to determine annually how competitive their benefits are when attempting to attract and retain employees. After all, to be successful, employers MUST have the right employees when competing locally, nationally and globally. This is a fact of business life!

Prior to 2012, our surveys have randomly-selected Iowa employers once a year. Annual surveys are really a “snap-shot” in time, allowing us to sample a particular population for that time period and compare the results to previous years’ results.  Doing this has provided a wealth of data on employee benefit trends that provides meaningful information for employers, policy-makers, the media, etc. This work also allows us to compare different industries within Iowa to one another. All industries, by the way, are NOT created equal! There are inherent issues within each industry that impacts the type of benefits offered to employees…and the costs can be considerably different when comparing industries.

Beginning in 2012, we have updated our survey process to make it even more fresh, relevant, local and customized for the Iowa employer. Instead of surveying all industries at the same time each year, we are staggering the survey process to allow a greater likelihood of observing trends sooner, rather than later.

Here’s how it will work:

Every two months, beginning in January and February of 2012, we will survey just one major Iowa industry. For example, we just finished surveying the Manufacturing industry in Jan/Feb, and we are now “interviewing” the Retail sector for March and April. The other survey periods for 2012 include:

  • May/June – Finance and Insurance
  • July/August – Healthcare & Social Services
  • September/October – All Other Sectors not interviewed in the other five periods
  • November/December – All State & Local Governments

In 2013 and beyond, the process will be repeated as mentioned above. During any given survey period, new questions can be added once new trends and developments have been identified, including new questions about health reform issues, wellness initiatives, and employer attitudes on various subject matter, to name a few.

In addition to having on-going “fresh” data, we will seek a higher number of respondents for each industry than we have in the past, making our already credible survey even more robust! Our studies have consistently interviewed over 900 employers in each of the last several years…and we will now add to this number under the new survey process.

If your organization is randomly selected to participate in this new and improved study, I highly encourage you to participate (if you already have, we thank you!). By participating in this important research, you will receive an overall summary of the survey results that will help your organization compare itself to other Iowa employers. If your organization has not been randomly selected to be surveyed, don’t despair, you still have access to this information. Should you wish to have an easily customized benchmark analysis with other Iowa employers both within and outside your industry, you can perform this anytime here. New and improved benchmark programs will also be developed within the near future! Many changes are being made to this landmark study, but its’ integrity remains unchanged. You have my word on that!

Here’s to a new beginning – for all of us!  

 

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