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Lindex Online® – Hitting the Mark in Iowa

Lindex Online“Torture the data, and it will confess to anything.” Ronald Coase, Nobel Prize Laureate

Throwing darts at a dartboard takes great skill, especially if one is incented to consistently hit the bulls-eye. For most others, it is merely a game of chance – so what if the errant dart lands in a different zip code from the bulls-eye? The difference between those throwing the darts can boil down to one word – ‘motivation.’

Due to the sheer cost of offering benefits to employees – thanks largely to escalating health insurance premiums – employers are increasingly motivated to rely on credible, localized data to make decisions about employee benefits. According to the Bureau of Labor Statistics, the cost of employee benefits constitutes a significant percentage of total employee compensation – roughly 31 percent for private organizations and 36 percent for state and local governments!

An essential, on-going source of Iowa benefits information is summarized in our annual ‘Iowa Employer Benefits Study,’ which now enters its 17th year. This report provides overall statewide data that combines all industries based on employer-size categories, which is important for employers who wish to benchmark their plans with other similar-sized employers. This study gives employers a ‘birds-eye’ view of overall benefits offered by Iowa employers, but it does not compare employers to key industries – or by employer location.

But Lindex Online® does!

Lindex-Online---IBB-Logo-50

Lindex Online is our innovative web-based tool we designed to ‘slice-and-dice’ the myriad of data from our annual survey into meaningful benchmark information that compares key benefits offered by employers.

Lindex Radius

Lindex Radius is a benchmark filter

An online purchaser, such as an employer, broker/consultant, association or insurance carrier selects a ‘filtering’ tool that compares the client organization to six key industries – based on seven different employer-size categories. Additionally, the on-line purchaser can benchmark their benefits using the Lindex Radius, which combines only those surveyed employers who fall within a designated mile-radius of the client zip code (see Lindex Radius on right).

Key benchmarked industries include:

  1. Overall (All industries combined)
  2. Manufacturing
  3. Retail
  4. Finance, Insurance, Real Estate
  5. Other Services
  6. Government and Education
  7. Healthcare and Social Services

Depending on the number of respondents within each survey, we may consider adding a few more industries to Lindex Online in the future.

Because employee benefits data can be both voluminous and complicated for an employer, Lindex Online distills this data into one relevant number to provide clarity – known as the Lindex®.

2014 Lindex Gauge

Overall 2014 Lindex score in Iowa is 74.

The Lindex is a complex algorithm that measures the types of benefits offered, preferences employees have for each specific benefit, and employee costs associated with those benefits. Ranging from 0 to 100, with lower scores indicating fewer and more expensive benefits, and higher scores indicating more comprehensive benefits being offered at a lower cost, the Lindex allows the benchmarked employer to compare their overall benefit offering to other employers on an on-going basis.

Without great practice (and torture!), Lindex Online will guide your dart to the intended bulls-eye. To learn more about the features and cost of Lindex Online, please contact us.

To stay abreast of employee benefits and healthcare issues, we invite you to subscribe to our blog.

Shifting Health Costs to Employees – Pre vs. Post ACA

Consumer-Driven Health Care in IowaAccording to various media reports and a recent USA Today article, Americans continue to pay more of their own healthcare costs.

But there was one sentence in a December 3, 2014 Wall Street Journal article that got me thinking. The sentence reads: “The trend is being accelerated by the Affordable Care Act (ACA) because many private plans sold by the law’s health exchanges come with high-deductible health plans.”

Can this be true? If so, what is happening in Iowa with employer-sponsored health plans since the ACA was passed in 2010? From our vault of study data, I decided to perform a quick ‘audit’ of pre-and-post ACA trends in Iowa on this particular issue.

My findings appear to be a bit different than conveyed by the WSJ article – at least for our state of Iowa.

To clarify, our survey does not exclusively analyze the health plans offered within health exchanges. After all, the ‘public’ exchange has only been operating since the beginning of 2014. But rest assured, because we randomly select employers to participate in our surveys, a few employers may have purchased their group health plans through the Iowa Partnership Exchange and participated in our 2014 survey. Realistically, a scant number of these employers would have affected our overall findings.

PRE and Post ACA Deductibles
The chart below illustrates the average single health plan deductibles offered by Iowa employers during the period 2005 to 2014. All group medical plans within our data include PPOs, HMOs, Indemnity and consumer-driven health plans. Looking at the five-year period prior to 2010 (the year the ACA became law), the deductible increased from $750 in 2005 to $1,061 in 2009 – an increase of 41 percent. Yet, when we look at the five-year period that follows 2009, the deductible growth appears to be more tame – increasing only 13 percent ($1,247 in 2010 to $1,410 in 2014).

All Medical Plans DeductiblesPNG

Many key ACA provisions did not take effect until sometime after 2010, so we cannot completely comprehend how the ACA will ultimately impact employer-sponsored plans on cost-sharing arrangements and cost. When attempting to clearly understand the ACA impact, this comparison is only one of many metrics that will need to be assessed in the years to come.

PRE and Post ACA Out-of-Pocket Maximums
Similar to the above deductible chart, the chart below illustrates the average single out-of-pocket maximums (OPMs) offered by Iowa employers from 2005 to 2014. Again, the five-year period prior to the 2010 ACA implementation year shows that OPMs increased by 19 percent, compared to 13 percent since 2010.

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There are many variables to consider that are not addressed in this blog, such as average health plan designs within the public exchange versus outside the public exchange. Assuming a healthy number of employers enroll in the public exchange, it will take a few years to have a better accounting of such differences. At this point, plan design changes continue to show additional cost sharing with employees and their dependents, just not at the accelerated pace that some may think.

What will the future eventually reveal about our ever-changing health insurance world? Stay tuned…

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

16 Candles

Sixteenth Iowa Employer Benefits StudyWe have just launched our annual Iowa Employer Benefits Study©. As with all previous studies, I’m looking forward to this year’s survey for the following important reasons:

• This will be the 16th Study conducted since we started this particular survey in 1999. Though I would never compare this ‘baby’ to my two beautiful daughters, it sure has evolved considerably since inception!

• Two new modules of questions will be added in this year’s survey.

1.   Affordable Care Act (ACA) – This module will address whether Iowa employers are using healthcare exchanges (marketplaces) — either public or private. If not, we’ll determine whether they plan to offer health coverage through some type of marketplace in the future. We will also find out whether employers are using a Defined Contribution approach for health coverage or offering it as part of a cafeteria plan.

Along with many other ACA-related questions, we will learn whether employers plan to:

  • Add a spousal surcharge
  • Require an employee’s spouse to get coverage through their own employer
  • Adopt a value-based insurance design for health coverage
  • Offer tiered-provider networks to promote high-value providers
  • Eliminate health coverage for all employees
  • Eliminate health coverage for part-time employees
  • Institute a wellness program
  • Add wellness rewards or penalties

2.   In our 2013 Study, we asked Iowa employers to rate hospitals and physicians on 11 performance indicators using a 10-point scale. In addition, employers were asked to rate how much they ‘trust’ hospitals and physicians. In this year’s survey, we are going one step further. We are inviting employers to rate which of the 12 performance indicators are most important to them. From this, we will prioritize which of the 12 indicators are most important from the employer perspective.

As with the past 15 Studies, we will continue to ask our core questions about the benefit components being offered by Iowa employers. New information gained from this survey will be reflected in our Lindex Online Iowa Benefits Benchmarking tool. The 2014 results should be available in late August/early September. As always, our intent is to keep our annual Study both fresh and relevant within the changing world of employee benefits.

If your organization is randomly selected to participate in this year’s Study, we highly encourage you to share in our celebration by participating in this important survey. 

I always take great delight in adding yet another candle to our cake!

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