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CCH® BENEFITS — 06/13/11

Employers Focus On Improving Employee Health To Decrease Health Care Costs

from Spencer’s Benefits Reports: In the coming year, employers plan to rely more on employees to decrease health care costs, but the inability to motivate and change habits has prompted concern, according to new survey of 1,028 employers from Aon Hewitt. The 2011 Health Care Survey found that the top health care outcomes organizations would like to achieve this year are improving employee health habits (56%), lowering health care cost increases (49%), decreasing worker health risk (44%), increasing participant awareness of health issues (37%), and enhancing participation in health improvement/disease management programs (37%). However, Aon Hewitt noted that success in these areas may be difficult, as 56% of respondents said that motivating participants to change unhealthy behaviors is the most significant challenge to accomplishing 2011 health care program goals.

In 2010, 70% of companies offered disease management programs, followed by health and wellness improvement programs (64%) and behavioral health programs (60%), according to Aon Hewitt. In addition, many organizations plan to expand efforts during the next three to five years and implement strategies that focus on total well being to improve physical and mental health (60%), absence management (53%), and integrated safety and health improvement efforts (50%).

As a way to influence employees to participate in these programs, 22% of employers will provide incentives to employees, while 10% will use programs to penalize employees for exhibiting unhealthy behaviors. Employers currently offer incentives to employees for participation in key initiatives, such as biometric screenings (33%), health risk assessments (33%), wellness programs (31%), and tobacco cessation programs (27%). Conversely, Aon Hewitt found that some employers impose a penalty for not participating in biometric screenings (5%), health risk assessments (5%), wellness programs (2%), and tobacco cessation programs (6%).

Plan Types Offered

Aon Hewitt found that PPO plans continue to be the most prevalent type of health program offered by employers and have the highest enrollment of employees/dependents, followed by HMOs and consumer-driven health plans (CDHPs). However, the survey found a downward trend in the percentage of companies offering traditional benefit plan types (e.g., HMO, PPO, EPO, indemnity) for the past three years. Employers offering PPO plans decreased by 11% from 2009 to 2011, while CDHPs appear to be gaining momentum, with an 11 percentage point increase over last year.

Forty-one percent of survey respondents offered a CDHP (either with or without a health savings account (HSA) or health reimbursement arrangement (HRA)). However, 51% of employers reported that they will offer a CDHP as a plan choice option in 2011, and 29% plan to add a CDHP option over the next three to five years. Of the organizations that currently offer a CDHP, 69% combine it with an HSA and 37% include an HRA.

Of those employers who do offer a CDHP, 53% report not using any strategies to promote participation. Of the 47% who are actively promoting participation in their CDHP, subsidizing premiums at higher levels than other plan options and employer contributions to HSAs are most popular (49% and 40%, respectively), according to Aon Hewitt. A growing number of employers plan to promote CDHP enrollment over the next three to five years through targeted communications and setting the CDHP as the default plan option.

For more information, visit http://www.aon.com/healthcaresurvey.

For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer's Benefits Reports.

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