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Employer Benefit Trends
Deviating from the Status Quo

Putting Toe in WaterImagine a large number of people sitting around a gigantic swimming pool with their toes testing the water temperature. Eventually, a few gutsy individuals – the early innovators – will dive into the water. Shortly after, a larger, second tier of people will follow. Employer-behavior is very similar.

On the eve of receiving our newest 2015 Iowa Employer Benefits Study survey results, I can’t help but anticipate what the data may reveal – or at least insinuate.

Much of this anticipation relates to the health insurance offered by Iowa employers, such as:

  • Reported premium change from last year’s survey – most assuredly, the premiums have increased – but by how much?
  • What are the new cost-sharing changes that employees must bear, such as their health premium payroll contribution, deductible amounts, out-of-pocket exposures, and consumer-driven health plan (CDHP) components, etc.
  • The importance of healthcare outcomes to employers and the never-ending challenges they face, such as costs, employee attitudes and engagement of health issues regarding healthier behaviors and wellbeing.
  • Employers’ perceptions of medical errors within Iowa.

It seems that employers, both in Iowa and elsewhere, are not highly motivated to make transformative changes to the health plans they offer UNLESS the following two major determinants occur:

  1. Medical inflation trends move up relatively precipitously and the prospect of escalating costs appear seemingly uncontrollable for the unforeseeable future.
  2. Early-innovator employers make bold moves that deviate from the status quo to find new approaches to alleviate upward cost trends. Such employers are typically large and likely have more options available at their disposal, such as utilizing various funding arrangements that can impact their leverage with local health providers.

These determinants serve as catalysts that prompt the ‘second-tier’ of employers, those who are not transformative players but closely follow those who are. This second-tier will make similar adjustments to their benefit offerings that will pave the development of new ‘tipping points’ within the benefits industry. Netflix’s extended paid leave policy for new parents is just one example on how a bold transformation in organization policy can expedite a rapid market response.

Of course, there are many other influences that can determine whether employers will continue to offer health coverage in the future. Without question, employers influence one another in many ways, including the type of benefits they offer within the workplace setting. Needless to say, the location of employers can be a great determinant when establishing trends.

By default, the buying behavior in health insurance is primarily determined by the urgency to relieve cost pressures. The push to ‘contain’ costs will make way for new and meaningful initiatives that will eventually drive innovative quality measures employers demand within the healthcare industry.

As for this particular survey year, I’m speculating that without having markedly higher medical cost trends, we will not see a great deal of bold moves from the ‘trail blazers’ – just yet.

Witnessing developing trends can be quite satisfying. That’s what fuels my anticipation of reviewing the newest survey results. Stay tuned…

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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!

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