2012 NATIONAL SURVEY OF
EMPLOYER-SPONSORED HEALTH PLANS
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 1
About Mercer’s survey
• Now in its 27thyear, the survey was established in 1986.
• A national probability sample has been used since 1993. This means that survey results are representative of all employer health plan sponsors in the US with 10 or more employees.
• The national, regional and major industry group results are weighted to represent all US employers. However, results for smaller groups – city, state and other special employer groups – are unweighted and represent only the respondents in the group.
• 2,809 employers (with 10 or more employees) participated in 2012. • In this presentation, we refer to:
- small employers – 10-499 employees - large employers – 500+ employees - very large employers – 5,000+ employees.
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 2
Who’s in the audience?
• Employers (HR, benefits, CFO, etc.)
• Recruiters / Employment
• Healthcare Providers / Health Delivery Organizations
• Vendors / Carriers
• Brokers / Consultants
• Other category?
• Small <500
• Large 500 >
*Projected
Source: Mercer’s National Survey of Employer-Sponsored Health Plans; Bureau of Labor Statistics, Consumer Price Index, U.S. City Average of Annual Inflation (April to April) 1990-2012; Bureau of Labor Statistics, Seasonally Adjusted Data from the Current Employment Statistics Survey (April to April) 1990-2012.
FLASH! Employers hold cost increase to lowest level in 15 years
Health benefit cost growth dips to 4.1% after employer actions
17.1%
12.1%
10.1%
8.0%
-1.1% 2.5%
0.2% 6.1%
8.1% 11.2%
14.7%
10.1%
7.5%
5.5% 4.1% 5.0%* 6.1%
6.9% 6.3% 6.1% 6.1% 6.1% 7.3%
2.1%
-2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% 20.0%
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Workers' earnings
Annual change in total health benefit cost per employee Overall inflation
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 4
Slower trend reflects employer response to three major market forces….
• Sluggish
economy
keeps the pressure on employers to control health cost
trend – and on employees to watch spending
• Health
reform
(PPACA) has been and will continue to be a catalyst for
change – especially employers’ concern about the excise tax on high-cost
plans
• Employers are taking advantage of market
innovations
aimed at creating
more efficient health care delivery
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 5
Don’t know
Increase of 2% or less
Increase of 3% or more
No increase
Expected cost increase due to PPACA requirements effective in 2014
46% 40%
33% 32% 31% 29%
24%
Retai l and hosp
itality
Othe r ser
vices Manu
factu ring
Gove rnme
nt Tran
spor tation
/
Comm unica
tion/ Utilit
y Healt
h car e servi
ces Finan
cial s ervic
es
Expect cost increase of 3% or moredue to PPACA requirements effective in 2014, by industry
Source: Mercer’s Survey on Health Care Reform After the Decision
Most employers say reform will raise costs in 2014
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 6
Despite added cost pressure, most employers will continue to
provide health benefits…
20%
6% 19%
9% 22%
7%
2010 2011 2012
Small employers All large employers
Percent of employers that are
likely to terminateplans within the next five years
…but they are changing the terms
1. Resetting benefit value
2. Actively engaging employees in improving their own health
3. Focusing on choice
#1 - Resetting benefit value
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 9 --20%
20% 30%
Hospital coinsurance
HSA-eligible CDHP HMO
PPO Example
60% plan
--$500
$2,250 $500
Median cost sharing* amounts for:
$1,500 $1,800
Deductible
$3,000 $5,950
Out-of-pocket maximum
9
Room to reduce? Health reform sets the bar for plan value at 60% of
covered expenses – lower than for most employer-sponsored plans
Large employers
* Cost sharing for individual, in-network coverage
What is y
our emplo
yer Plan’s
actuaria
l value? D
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 10
$10,167
$7,833 $10,007
PPO HMO HSA-eligible CDHP
Consumer Driven Health Plans (CDHPs) typically pass the 60% “test”
and cost about 20% less than PPO and HMO coverage
Medical plan cost per employee
(Includes employer contributions to HSA accounts)
$1,016
$1,113 $1,192
$1,410 $1,452
$511 $565 $587
$501
$666
2008 2009 2010 2011 2012
Small employers Large employers
Large employers dramatically raised PPO deductibles in 2012
Small employers raised theirs in 2011
Average PPO deductible for individual, in-network coverage
+17% in 3 years +18%
in 1 year
+13% in 1 year
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 12
Many employers see CDHPs as central to their response to health reform
Large employers
14%
20% 20%
23%
32%
6% 7% 8%
10%
13% 15%
36%
2007 2008 2009 2010 2011 2012
Percent of employers offering CDHPs
Percent of covered employees enrolled in CDHPs
CDHP growth is accelerating – Prevalence and enrollment nearly doubled in just 3 years
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 13
Growing employee acceptance spurs growth in CDHP-only programs
Large employers
19% 23%
27% 37% 38% 40%
2010 2011 2012
HSA-eligible CDHP HRA-based CDHP
More employees choosing CDHP
% choosing CDHP when offered w/other medical plans
9% 10%
14% 17%
28% 21%
2010 2011 2012
HSA-eligible CDHP HRA-based CDHP
Full replacement becomes more common
% of CDHP sponsors offering no other plan
41%
15%
Employer contribution to HSA
>$750
Employer does not contribute to HSA
Employer HSA funding drives enrollment
% of employees enrolled
11%
18%
2011 2012
Expect to offer a CDHP as full replacement 5 years from now
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 14
Defined contributions: one way employers are resetting benefit value
A framework, not a single strategy
1. Core | buy-up (employer contribution for all plan options)
2. Flat-dollar subsidy | voucher (employee buys own)
3. Fixed employer increase (contributions are set annual increases) 14%
11%
33%
Currently use or are considering a defined contribution approach:
Why are employers looking at a defined contribution approach to medical? To reset how the employer and employee share the cost of coverage
To connect employees to their health care and its cost – and be a catalyst for employees to make better choices
To improve financial predictability in medical program budgeting To parallel retirement plans’ transition from DB to DC
#2 - Engaging employees
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 16
26% 31% 28%
9% 82%
78% 80%
51%
63%
74%
48% 49%
36% 29%
Case management
Disease management
Nurse advice line
Health advocate
Behavior modification
Health assessment
Worksite biometric screening
Small employers Large employers
Health management is now the norm, addressing a full range of needs
Percent of employers offering program
REACTIVE PROACTIVE
Half of Employers
Addressing the continuum of health needs
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 17
Employers are now focused on building employee engagement through
incentives – and are seeing results
27%
39% 33%
45% 54%
66%
All large employers Employers with 5,000 or more employees
2010 2011 2012
More employers are driving engagement through incentives, most often cash or contribution
reductions
46%
24%
40% 53%
26%
50%
27%
17% 17%
Health assessment completion rate Lifestyle management program* Validated biometric screening rate
All employers offering program Employers offering incentives Employers not offering incentives
Large employers using incentives report higher participation rates *Average % of identified persons actively engaged in program
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 18
4% 4% 4%
6%
9% 9% 9%
18%
Body mass index
Cholesterol Blood pressure
Any
2011 2012
9% 10%
12%
15%
2009 2010 2011 2012
Sharp growth in use of outcomes-based incentives
More large employers linking incentives to what employees do about their health
Offer lower premium contributions to non-tobacco users
Provide incentives for achieving or maintaining health status targets
Building successful health management programs
Data analysis reveals five key influences on medical savings
47% 46% 41% 37% 37%
66%
76% 69% 68% 68%
Yes No
Formal, written strategic plan for HM is in place
Financial outcomes goals are included in strategic HM plan Branded HM communications
Spouses are included in key components of health management program Strategy in
place
Senior leadership actively participates in HM programs
Percentage of HERO Scorecard respondents reporting savings due to EHM
#3 - Focusing on choice and provider quality
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 21
Survey results point to employers’ growing interest in choice – why now?
• All individuals
must have health insurance
under the reform law, raising the
need for low-cost employer-sponsored options
• A diverse workforce has
diverse needs
– Choice promotes efficiency by allowing employees to buy the amount of
coverage they need
– More costly choices must come with a cost to employees
• Adding choice
eases the transition
to a more sustainable health benefit
design
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 22
Growing use of tools and technology to improve the delivery of care
Large employers
23% 22% 22% 20% 12% 10% 11% 6% 27% 19% 14% 16% 22% 17% 16% 19% Currently use Considering using Value-based designSurgical centers of excellence
Data warehousing
Collective purchasing of medical or Rx benefits
High-performance networks
Telemedicine
Reference-based pricing
Medical homes
Top 5 cost savers: Employers using strategy that
achieved lower cost as a result: • Collective purchasing 70% • Reference-based pricing 57% • Value-based design 56% • High-performance networks 51% • Surgical center of excellence
43%
Telecommuting / Work from home Adoption assistance
On-site/near-site dep. care Fitness center discounts Legal consult / referral Financial consult / referral Dep. care resource / referral Elder care resource / referral
Work/Life Benefits 89% 83% 75% Supplemental life* Disability Vision 58% 41% 38% 32% 31% 58% 38% 34% 31% Accident
Cancer / critical ill. Whole / universal life Long-term care
19% 18% 16% Voluntary Benefits
Auto / Homeowners Travel Hospital indemnity 25% 22% 11% P e rc e n t o f la rg e e m p lo y e rs o ff e ri n g t h e b e n e fi t 90% 60% 30% 0%
*Supplemental employee term life (83% offer dependent term life)
For more than a third of employers, voluntary benefits offer a way to
maintain employee benefit options as core benefit plans change
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 24
76% 72% 66% 50%
37%
Why offer a voluntary benefits program?
Large employers
Give employees opportunity to fill gaps in employer-paid benefits
Help employees take advantage of group purchasing power Accommodate employee requests
Offer additional benefits at no cost to the employer
To maintain employee benefit options as core benefit plans change
Profile of a successful
voluntary program:
Employee-valued productsUser-friendly platform
Multi-faceted enrollment solutions
Robust education and communication program
Program coordination
#4 - Exploring new options: Private insurance
exchanges
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 26
Growing interest in private health care exchanges
18%
56%
2011 2012
Why are employers looking at
private health care exchanges?
One-stop shoppingacross core medical, life, disability and voluntary benefits Technologyeases employee decision-making
Collective buying powerand influence help control total benefit cost
Some allow employers to retain control Employees are not necessarily opposed to change as long as they see financial benefit
Percent of employers that would consider offering a private exchange
Taken all together…we see employers keeping goals in focus and
bringing strategies together to create more sustainable programs
Private Insurance Exchanges Cost control, choice and streamlined
plan management Choice, Value and Quality
Leveraging the power of information and technology
Health Management Programs A full continuum of programs & new
rules of engagement Resetting Plan Design
CDHP, DC, choice at a cost
Cost Control Compliance Engaged Workforce
Evansville, Indiana
Aggregated Survey Results
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 29
About the Survey
888 Midwest All
Number of participants Employers
1177 500-4,999 employees
720 50-499 employees
12 Evansville Aggregate results
• The employer groups shown in this presentation are:
• The map below shows which states fall into each of the four major
geographic regions:
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 30
Demographics
9% 51%
41 50-499 employees
500-4,999 employees Midwest All
Evansville Aggregate
results
8% 44%
42
13% 0%
% of union employees
50% 42%
% of female employees
42 44
Average employee age
1 year = appx. +2%
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 32 75%
83%
77%
90%
10%
25%
33%
17% 15% 20%
26%
0%
6% 7% 10%
0% 2% 1% 4%
8%
Evansville Aggregate results
Midwest All 50-499 employees 500-4,999 employees
PPO / POS HMO HSA-eligible CDHP HRA-based CDHP Indemnity
Type of medical plan offered
Percent of employers offering each type of medical plan
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 33 70%
66% 70%
75%
16% 16% 10%
8%
8% 11% 13%
17%
5% 6% 6%
0%
1% 0% 1% 0%
PPO / POS HMO HSA-eligible CDHP HRA-based CDHP Indemnity
Evansville Aggregate results
Midwest All
50-499 employees
500-4,999 employees
Employee enrollment
Total health benefit cost
+4.0% +6.0% +3.3% +6.6%
$10,683 $10,326 $10,450$11,141
$9,998 $10,080
$8,992 $9,353
Evansville Aggregate results
Midwest All 50-499 employees 500-4,999 employees
2011 % Change 2012
*Total health cost includes medical, dental, Rx and specialty benefits
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 36
Expected average increase in total health benefit cost per employee for
2013
*Changes to plan design or health plan vendor
5.3% 8.4% 50-499 employees
500-4,999 employees Midwest All
Evansville Aggregate
results
5.0% 7.1%
4.8% 6.3%
After making changes*
6.7% 7.9%
Before making any changes*
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 38
Employee contribution for
individual
coverage
Average monthly contribution ($)
$66 $72
$87 $93
HSA-eligible CDHP
$17 $21
$22 $16
Dental
$79 ID
ID ID
HRA-based CDHP
$99 $117 50-499 employees
500-4,999 employees Midwest All
Evansville Aggregate
results
$175 $156
$105 $56
HMO
$110 $128
PPO / POS
Employee contribution for individual coverage
Average contribution as a % of premium
17% 24%
26% 24%
HSA-eligible CDHP
51% 62%
64% 68%
Dental
21% ID
ID ID
HRA-based CDHP
25% 25% 50-499 employees
500-4,999 employees Midwest All
Evansville Aggregate
results
44% 32%
23% 10%
HMO
22% 25%
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 40
Employee contribution for
family
coverage*
Average monthly contribution ($)
*Family coverage is defined as coverage for employee, spouse and two children
$265 $371 $330 $287 HSA-eligible CDHP $50 $65 $54 $61 Dental $314 ID ID ID HRA-based CDHP $470 $517 50-499 employees 500-4,999 employees Midwest All Evansville Aggregate results $317 $497 $371 $535 HMO $394 $347
PPO / POS
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 41
Employee contribution for family coverage*
Average contribution as a % of premium
*Family coverage is defined as coverage for employee, spouse and two children
24% 40% 42% 25% HSA-eligible CDHP 55% 65% 69% 72% Dental 28% ID ID ID HRA-based CDHP 50% 47% 50-499 employees 500-4,999 employees Midwest All Evansville Aggregate results 56% 52% 28% 36% HMO 30% 28%
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 42
Salary-based contributions
ID 4% 50-499 employees
500-4,999 employees Midwest All
Evansville Aggregate
results
ID 2%
3 3
Median number of salary bands
12% 9%
Employee contribution amount varies based on salary
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 44 18%
19% 50-499 employees
500-4,999 employees Midwest All
Evansville Aggregate
results
19% 21%
18% 27%
% of employers offering incentive to waive coverage
16% 20%
Average % of employees waiving own coverage
Coverage waivers
How? What incentive?
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 45 45% 50%
35% 17%
Offer same-sex domestic partner coverage
46% 7% 50-499 employees
500-4,999 employees Midwest All
Evansville Aggregate
results
55% 10%
58% 53%
% of employees electing dependent coverage
12% 40%
Include provisions concerning spouses with other coverage available
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 46 94% 97%
98% 50%
Benefits, contributions same for PTEs, FTEs (when PTE coverage is provided)
26 49% 50-499 employees
500-4,999 employees Midwest All
Evansville Aggregate
results
29 42%
24 31
Average number of hours / week required for
coverage
63% 25%
Offer coverage to part-time employees*
Part-time employees
*Among employers that have part-time employees
Offer mini-med or limited health plan
8%
1%
2%
5%
Evansville Aggregate results
Midwest All 50-499 employees 500-4,999 employees
(?) Eliminated (?) 2014
Strategic planning
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 49
Very likely to offer account-based CDHP in 2013
Includes employers that offered a CDHP prior to 2013
17%
20%
23%
29%
0%
6%
12% 13%
Evansville Aggregate results
Midwest All 50-499 employees 500-4,999 employees
With a Health Savings Account
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 50 32%
19% 50-499 employees
500-4,999 employees Midwest All
Evansville Aggregate
results
27% 22%
49% 36%
Alongside other medical plan choices for all employees
18% 27%
As the only type of plan offered for at least some employees
Expect to offer an account-based CDHP in next five years
3% 6% 50-499 employees
500-4,999 employees Midwest All
Evansville Aggregate
results
3% 4%
5% 17%
Other incentive
14% 17%
Lower premium contribution
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 52
Offer on-site or near-site medical services*
33%
25% 33%
15%
Evansville Aggregate results
Midwest All 50-499 employees 500-4,999 employees
Occupational health clinic Primary care clinic
*Based on employers with 500 or more employees
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 53 11% ID
ID 0%
Reference-based pricing
20% ID
ID 33%
Data warehouse
18% ID
ID 67%
Collective purchasing of medical or pharmacy benefits
21% ID
ID 0%
Surgical centers of excellence
22% ID
ID 33%
Value-based plan design
6% ID
ID 0%
Medical homes (AICU model)
10% ID
ID 0%
Telemedicine
ID 50-499 employees
500-4,999 employees Midwest All
Evansville Aggregate
results
ID 11%
33% High-performance
networks
Advanced cost-management strategies used*
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 54 9% 15%
8% 0%
HR administration reporting
25% 31%
22% 0%
Any of the above
8% 4% 4% 20% Considering outsourcing 10% 12% 11% 0% Employee communications 11% 20% 50-499 employees 500-4,999 employees Midwest All Evansville Aggregate results 7% 17% 12% 0%
Self-service (e.g., employee life event changes)
14% 0%
Annual enrollment
Outsource health plan administration
6% 10%
7% 9%
Some other defined contribution approach
62% 49%
54% 73%
Not currently using or considering defined contributions 9% 13% 19% 0%
Provide employees with subsidy to purchase coverage on their own
40% 13% 50-499 employees 500-4,999 employees Midwest All Evansville Aggregate results 31% 12% 28% 18%
Provide same dollar contribution for all plans, employees pay more for more expensive coverage
8% 9%
Raise employer contribution by a set amount each year, employees absorb the rest of the increase
Use (or considering using) a "defined contribution" approach to
funding health coverage
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 56 62% 44%
41% 58%
Would not consider a private health exchange
17% 28%
28% 0%
To Medicare-eligible retirees
31% 47% 50-499 employees
500-4,999 employees Midwest All
Evansville Aggregate
results
37% 54%
22% 8%
To pre-Medicare-eligible retirees
29% 42%
To active employees
Would consider offering private health exchanges, as they become
generally available
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 57
Growing interest in private health care exchanges
18%
56%
2011 2012
Why are employers looking at
private health care exchanges?
One-stop shoppingacross core medical, life, disability and voluntary benefits Technologyeases employee decision-making
Collective buying powerand influence help control total benefit cost
Some allow employers to retain control Employees are not necessarily opposed to change as long as they see financial benefit
Percent of employers that would consider offering a private exchange
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 58 62% 44%
41% 58%
Would not consider a private health exchange
17% 28%
28% 0%
To Medicare-eligible retirees
31% 47% 50-499 employees
500-4,999 employees Midwest All
Evansville Aggregate
results
37% 54%
22% 8%
To pre-Medicare-eligible retirees
29% 42%
To active employees
Would consider offering private health exchanges, as they become
generally available
Preferred Provider Organization (PPO) /
Point-of-Service Plans (POS)
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 60
+5.8% +8.4% +4.2% +7.2%
$10,241 $10,020 $9,915$10,624
$9,614 $9,449
$8,788 $9,299
Evansville Aggregate results
Midwest All 50-499 employees 500-4,999 employees
2011 % Change 2012
Average PPO / POS cost per employee, for active employees
Congrats!
9.7% l
ower than
average
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 61 $900 $1,250
$2,000 $1,000
Median out-of-network deductible
95% 90%
88% 100%
% requiring for out-of-network services
$1,000 79% 50-499 employees
500-4,999 employees Midwest All
Evansville Aggregate
results Individualdeductible
$1,000 87%
$500 $500
Median in-network deductible
85% 100%
% requiring for in-network services
PPO / POS deductibles
$2,000 $3,000
$4,000 $2,700
Median out-of-network deductible
95% 91%
86% 100%
% requiring for out-of-network services
$2,000 82% Familydeductible
$2,000 86%
$1,000 $1,050
Median in-network deductible
86% 100%
% requiring for in-network services
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 62 63% 71%
74% 78%
Emergency room visits
97% 97%
96% 100%
Inpatient hospital stays
76% 40% 50-499 employees
500-4,999 employees Midwest All
Evansville Aggregate
results
77% 45%
80% 89%
Lab tests and x-ray / radiology services
35% 67%
Physician office visits
Services subject to the annual deductible
$20 $25
$25 $23
Median copay amount
2% 7%
14% 0%
No cost-sharing is required
10% 86% 50-499 employees
500-4,999 employees Midwest All
Evansville Aggregate
results
12% 76%
21% 56%
% requiring coinsurance
84% 67%
% requiring copay
PPO / POS in-network primary care physician (PCP) visit
cost-sharing
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 64 $40
38% 50-499 employees
500-4,999 employees Midwest All
Evansville Aggregate
results
$50 33%
$40 $35
Median copay amount, when higher than PCP
47% 11%
% requiring higher copay for specialist
PPO / POS in-network specialist visit cost-sharing
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 65 40% 40%
35% 40%
Median coinsurance amount
2% 5%
13% 0%
No cost-sharing is required
66% 31% 50-499 employees
500-4,999 employees Midwest All
Evansville Aggregate
results
57% 35%
88% 100%
% requiring coinsurance
15% 22%
% requiring copay
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 66 20% 20%
20% 20%
Median coinsurance amount
$250 $250
$1,000 $425
Median deductible amount
12% 20%
28% 0%
No cost-sharing is required
60% 15% 50-499 employees
500-4,999 employees Midwest All
Evansville Aggregate
results
63% 7%
75% 89%
% requiring coinsurance
19% 33%
% requiring deductible / per-admission copay
PPO / POS in-network hospital stay cost-sharing
40% 40%
35% 40%
Median coinsurance amount
3% 6%
7% 0%
No cost-sharing is required
83% 7% 50-499 employees
500-4,999 employees Midwest All
Evansville Aggregate
results
83% 8%
92% 89%
% requiring coinsurance
14% 22%
% requiring deductible / per-admission copay
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 68 36% 33%
26% 56%
% requiring coinsurance
3% 5%
17% 0%
No cost-sharing is required
$100 72% 50-499 employees
500-4,999 employees Midwest All
Evansville Aggregate
results
$150 63%
$100 $100
Median copay amount
78% 78%
% requiring copay
PPO / POS emergency room visit cost-sharing
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 69 $4,000 $4,500
$5,000 $4,000
Median for out-of-network services
$2,500 50-499 employees
500-4,999 employees Midwest All
Evansville Aggregate
results IndividualOOP maximum
$2,500 $2,250
$2,000 Median for in-network services
PPO / POS out-of-pocket (OOP) maximums*
$8,000 $9,000
$10,000 $8,000
Median for out-of-network services
$6,000 FamilyOOP maximum
$5,000 $5,000
$3,500 Median for in-network services
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 70 9%
38% 42% 0%
18%
37% 38% 22%
67%
24% 18% 78%
6% 1% 2% 0%
Conventionally insured Experience-rated
Self-funded with stop-loss Self-funded without stop-loss
Evansville Aggregate results
Midwest All
50-499 employees
500-4,999 employees
PPO / POS funding method
HSA-eligible Consumer-Directed Health Plans
(CDHP)
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 72 -3.7%
$7,883 $7,742 $8,263
$6,920 $6,667
Evansville Aggregate results
Midwest All 50-499 employees 500-4,999 employees
2011 % Change 2012
Average HSA-eligible CDHP cost per employee*, for active employees
*Includes employer account contribution, if any
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 73 $2,650 $3,350
$4,000 $3,000
Median for out-of-network services
$2,500 50-499 employees
500-4,999 employees Midwest All
Evansville Aggregate
results Individual deductible
$2,500 $1,500
$2,750 Median for in-network services
HSA-eligible CDHP deductibles
$5,300 $7,000
$5,000 $6,000
Median for out-of-network services
$5,000 Family deductible
$5,000 $3,000
$6,500 Median for in-network services
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 74 20% ID
ID 20%
Median coinsurance amount
33% 51%
56% 0%
No cost-sharing is required
36% 13% 50-499 employees
500-4,999 employees Midwest All
Evansville Aggregate
results
32% 12%
61% 100%
% requiring coinsurance
8% 0%
% requiring copay
HSA-eligible CDHP in-network physician visit cost-sharing
40% 30%
30% 45%
Median coinsurance amount
12% 22%
19% 0%
No cost-sharing is required
73% 5% 50-499 employees
500-4,999 employees Midwest All
Evansville Aggregate
results
80% 1%
87% 100%
% requiring coinsurance
1% 0%
% requiring copay
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 76 $6,000 $5,500
$8,000 $12,075
Median for out-of-network services
$3,500 50-499 employees
500-4,999 employees Midwest All
Evansville Aggregate
results Individual OOP maximum
$4,000 $3,000
$4,625 Median for in-network services
HSA-eligible CDHP out-of-pocket (OOP) maximums*
$12,000 $11,000
$16,000 $24,150
Median for out-of-network services
$7,500 Family OOP maximum
$8,000 $6,000
$9,250 Median for in-network services
*Includes deductible
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 77 10% 3%
1% 0%
100% coverage for at least some Rx categories
4% 0%
6% 50%
Lower cost-sharing, but not 100%
3% 50-499 employees
500-4,999 employees Midwest All
Evansville Aggregate
results Preventive Rx covered at
separate, higher benefit level:
7% 17%
0% Not subject to deductible
HSA-eligible CDHP prescription drug coverage
77%
84% 69%
100% Non-preventive
prescription drugs subject to same coinsurance as any other medical expense
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 78
Average % of eligible employees enrolled in HSA-eligible CDHP when
offered as an option
25% 39%
35% 54%
Evansville Aggregate results
Midwest All 50-499 employees 500-4,999 employees
Congrats
again!
Percent of employers making an HSA account contribution
72% 70%
64% 100%
Evansville Aggregate results
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 80 $1,000 $1,200
$1,500 $1,080
Median for family coverage
$750 50-499 employees
500-4,999 employees Midwest All
Evansville Aggregate
results Employer contribution to
account
$1,000 $500
$930 Median for employee-only
coverage
HSA-eligible CDHP employer contributions
Among employers contributing to the account
11% 1%
1% 0%
Incentive-based contributions
88% 88%
99% 50%
Fixed, non-conditional contributions
12% Type of employer account
contribution
0% 7%
50% Matching contributions
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 81 37%
16% 17% 0%
34% 33%
23%
100%
29% 51%
60%
0%
Fully pre-fund Fund every paycheck Fund monthly or on other schedule
Evansville Aggregate results
Midwest All
50-499 employees
500-4,999 employees
HSA-eligible CDHP funding schedule for employer account
contributions
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 82
Offer a limited-purpose
56%
34% 29%
0%
Evansville Aggregate results
Midwest All 50-499 employees 500-4,999 employees
FSA in conjunction with HSA
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 84
4.4% 4.7%
4.1%
4.8%
2.9%
5.1% 5.0% 5.2%
Evansville Aggregate results
Midwest All 50-499 employees 500-4,999 employees
At last renewal
Expected at next renewal
Annual change in cost per employee for prescription drug benefits
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 85 30% 15%
25% 64%
Use coinsurance for 1 or more drug categories
14% 8%
14% 25%
4 or more levels
71% 70%
56% 75%
3 levels: generic, formulary, non-formulary 10% 9% 50-499 employees 500-4,999 employees Midwest All Evansville Aggregate results Retail 16% 9% 10% 0%
2 levels: generic, brand
4% 0%
Same level for all drugs
Employee cost-sharing requirements for prescription drug plans
25% 13%
24% 67%
Use coinsurance for 1 or more drug categories
12% 6%
14% 18%
4 or more levels
72% 73%
58% 64%
3 levels: generic, formulary, non-formulary 10% 8% Mail-order 16% 10% 11% 0%
2 levels: generic, brand
4% 9%
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 86 $50 $51 $53 $38 Brand-name non-formulary $32 $12 50-499 employees 500-4,999 employees Midwest All Evansville Aggregate results Retail $32 $11 $30 $28 Brand-name formulary $10 $11 Generic
Copayments in prescription drug plans
Average copayment among employers with three payment levels
$102 $107 $109 $80 Brand-name non-formulary $67 $25 Mail-order (for 90-day
supply) $64 $21 $62 $50 Brand-name formulary $21 $19 Generic 11% ID ID 0%
Retail penalty program (maintenance drugs are subject to higher cost sharing after 2-4 fills at a retail pharmacy) 13% ID ID 0% Mandatory mail-order (maintenance drugs must be filled by mail after 2-4 fills at a retail pharmacy)
ID ID 50-499 employees 500-4,999 employees Midwest All Evansville Aggregate results ID ID 47% 50%
Step therapy (generics / preferred brands required before non-preferred brands)
33% 0%
Mandatory generics (with or without physician override)
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 88 18% ID
ID 0%
None of the above
2% ID
ID 0%
Not applicable – Do not cover any specialty medications
13% ID
ID 0%
All dispensing (Rx and medical) through specialty vendor
43% ID
ID 50%
Step therapy
32% ID
ID 50%
Formulary management
49% ID
ID 100%
Utilization management
23% ID
ID 0%
Higher cost sharing for specialty medications
ID ID 50-499 employees
500-4,999 employees Midwest All
Evansville Aggregate
results
ID ID
33% 0%
Retail lockout
12% 0%
Medical lockout
Specialty drug cost-management strategies among employers with
1,000+ employees
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 90 62% 43%
36% 42%
Lifestyle management / behavior modification 43% 26% 13% 27% End-of-life case management 50% 40% 26% 67%
Health advocate services
79% 64%
49% 67%
Nurse advice line
77% 53%
33% 67%
Any disease management (DM) program 81% 48% 29% 75% Case management 20% 44% 50-499 employees 500-4,999 employees Midwest All Evansville Aggregate results 15% 32% 47% 58% Worksite biometric screening 73% 58%
Health assessment (HA)
Type of health management programs offered*
*Among employers that offer health management programs
11% 8%
5% 10%
Mobile apps for activity tracking / peer interaction
38% 23%
23% 30%
Web-based portal with activity / incentive tracking
34% 14%
8% 40%
On-site weight loss program
41% 17%
11% 30%
On-site exercise or yoga classes 30% 17% 20% 40% Social networking opportunities 50-499 employees 500-4,999 employees Midwest All Evansville Aggregate results
Other wellness activities offered*
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 92 67%
55%
47% 46%
59%
20% 19%
40% 24%
11% 16%
19% 84%
18% 21% 24%
Evansville Aggregate results
Midwest All 50-499 employees 500-4,999 employees
Health assessment – % of eligible employees Biometric screening – % of eligible employees
Disease management – % of identified persons actively engaged Lifestyle program – % of identified persons actively engaged
Program participation rates
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 93 47% 73%
76% 50%
Do not use any incentives
17% 14%
16% 40%
Use non-financial rewards
5% 14% 50-499 employees
500-4,999 employees Midwest All
Evansville Aggregate
results
4% 12%
15% 30%
Use financial penalties
41% 40%
Use financial rewards
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 94 29% 8% 14% 25% Lifestyle management program, when offered
6% 21% 50-499 employees 500-4,999 employees Midwest All Evansville Aggregate results Use incentives or
penalties to encourage participation in:
6% 18%
28% 44%
Biometric screening, when offered
47% 57%
Health assessment, when offered
Health management incentives / penalties
7%
10% 26%
30% Require multiple actions
to earn incentive (or use point system)
10%
12% 19%
40% Use outcomes-based
incentives for achieving, maintaining or
progressing toward specific health status targets
7% 0%
1% 0%
Lower deductible, copay or other cost sharing
$150 ID ID $130 Median incentive* 43% 22% 19% 75% Lower premium contributions 2% 58% 50-499 employees 500-4,999 employees Midwest All Evansville Aggregate results 3% 54% 10% 25%
Financial contribution to HRA, HSA, FSA
42% 50%
Cash / gift cards
Type of incentives used for health assessment
*Among employers that offer incentives in the form of cash, lower premium contribution or financial contribution to employee account
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 96 5% ID
ID 0%
Lower deductible, copay or other cost sharing
39% ID
ID 100%
Lower premium contributions
ID ID 50-499 employees
500-4,999 employees Midwest All
Evansville Aggregate
results
ID ID
8% 0%
Financial contribution to HRA, HSA, FSA
37% 0%
Cash / gift cards
Type of incentives used for biometric screening
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 97 6% ID
ID 0%
Lower deductible, copay or other cost sharing
28% ID
ID 0%
Lower premium contributions
ID ID 50-499 employees
500-4,999 employees Midwest All
Evansville Aggregate
results
ID ID
5% 100%
Financial contribution to HRA, HSA, FSA
43% 0%
Cash / gift cards
Special coverages
3% 9%
13% 8%
MH / SA benefits not provided
4% 3%
1% 0%
MH / SA carved out, provided by a specialty vendor
89% 50-499 employees
500-4,999 employees Midwest All
Evansville Aggregate
results
86% 93%
92% MH / SA benefits provided
by medical plan
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 100 81% ID
ID 67%
Provide coverage for autism*
5 4
5 5
Median number of face-to-face sessions provided
52% 50-499 employees
500-4,999 employees Midwest All
Evansville Aggregate
results
26% 82%
83% Provide employee
assistance program (EAP)
EAP and autism coverage
*Based on employers with 500 or more employees
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 101 24% 26%
18% 8%
Covered the same as other medically necessary procedures
17% 50-499 employees
500-4,999 employees Midwest All
Evansville Aggregate
results
16% 33%
17% Limited eligibility (must
comply with behavior modification program or standards)
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 102 10% 11% 15% 0% Advanced reproductive procedures 38% 44% 48% 64%
No infertility services are covered
23% 21%
19% 0%
In vitro fertilization
22% 20%
18% 9%
In vivo fertilization
34% 46% 50-499 employees 500-4,999 employees Midwest All Evansville Aggregate results 34% 45% 35% 27% Drug therapy 59% 36%
Evaluation by a specialist
Infertility treatments covered
17% 18% 12% 8% Massage therapy 8% 18% 13% 17%
No alternative medicine therapies are covered
8% 13% 10% 0% Homeopathy 90% 81% 85% 83% Chiropractic 5% 27% 50-499 employees 500-4,999 employees Midwest All Evansville Aggregate results 6% 14% 7% 0% Biofeedback 32% 8% Acupressure / acupuncture
Dental benefits
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 105
-1.9% -1.2% -3.0% +3.5%
$725 $741
$779 $753 $764
$734
$515 $505
Evansville Aggregate results
Midwest All 50-499 employees 500-4,999 employees
2011 % Change 2012
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 106 10% 11%
21% 8%
No provider network
11% 10%
7% 17%
Dental HMO
25% 60% 50-499 employees
500-4,999 employees Midwest All
Evansville Aggregate
results
19% 56%
37% 33%
Passive PPO
55% 50%
Active PPO
Type of dental plan offered
38% 41%
41% 58%
Posterior composites
22% 23%
19% 25%
Treatment of TMJ
54% 75% 50-499 employees
500-4,999 employees Midwest All
Evansville Aggregate
results
35% 68%
58% 67%
Implants
84% 92%
Sealants
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 108 50% 50%
50% 50%
Major restorative services (Type C)
80% 100% 50-499 employees
500-4,999 employees Midwest All
Evansville Aggregate
results Median coinsurance
amount paid by plan for:
80% 100%
80% 50%
Basic restorative services (Type B)
100% 100%
Preventive services (Type A)
Dental plan coinsurance
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 109 $50 $50
$50 $50
Median deductible
73% 50-499 employees
500-4,999 employees Midwest All
Evansville Aggregate
results Individual deductible
69% 80%
33% % requiring deductible
Dental plan deductibles for restorative services
$150 $150
$150 $150
Median deductible
72% Family deductible
66% 76%
33% % requiring deductible
9%
19% 9%
9% Preventive care is subject
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 110 $1,000
$1,500 50-499 employees
500-4,999 employees Midwest All
Evansville Aggregate
results
$1,000 $1,000
$1,500 $1,000
Median lifetime maximum orthodontic benefit
$1,500 $1,000
Median maximum annual benefit
Dental plan maximums
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 112 18% 15% 8% 8% Travel 18% 5% 0% 0%
Auto / homeowners
30% 25% 24% 25% Long-term care 16% 26% 22% 17% Hospital indemnity 39% 46% 43% 42%
Cancer / critical illness
83% 64%
43% 67%
Dependent term life
89% 75% 64% 75% Supplemental employee term life 34% 40% 35% 17%
Whole / universal life
58% 53% 44% 33% Accident 83% 66% 50-499 employees 500-4,999 employees Midwest All Evansville Aggregate results 71% 49% 83% 83% Disability 75% 67% Vision
Voluntary insurance benefits offered
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 113 57% 31%
17% 75%
Fitness center discounts
25% 21%
19% 0%
Telecommuting / work-from-home policy
39% 23%
11% 8%
Legal consultation and referral
36% 21%
7% 8%
Financial consultation and referral
30% 14%
3% 8%
Elder care resource and referral
10% 7%
1% 0%
On-site or near-site dependent care (or subsidy) 12% 5% 50-499 employees 500-4,999 employees Midwest All Evansville Aggregate results 4% 3% 31% 8%
Dependent care resource and referral
19% 17%
Adoption assistance
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 114 $1,480 $1,538
$1,548 $1,275
Average annual voluntary contribution
4% 3%
2% 1%
Average % of contribution dollars forfeited in 2011
32% 62% 50-499 employees
500-4,999 employees Midwest All
Evansville Aggregate
results Health care FSA
39% 40%
24% 27%
Average employee participation
85% 67%
% offering health care FSA
Flexible spending accounts (FSA)
$3,262 $3,344
$3,418 $2,421
Average annual voluntary contribution
2% 1%
0% 0%
Average % of contribution dollars forfeited in 2011
10% 58% Dependent care FSA
13% 34%
7% 4%
Average employee participation
83% 58%
% offering dependent care FSA
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 116
Offer retiree coverage*
17%
3%
5%
23%
0%
2% 3%
16%
Evansville Aggregate results
Midwest All 50-499 employees 500-4,999 employees
To pre-Medicare-eligible retirees To Medicare-eligible retirees
*To most retirees, on an ongoing basis (new hires will be eligible)
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 117 1%
50-499 employees
500-4,999 employees Midwest All
Evansville Aggregate
results Pre-Medicare-eligible
retirees
1% 4%
0% Subsidy to purchase coverage
independently
Provide a subsidy or other assistance to retirees purchasing health
coverage independently
5% 2%
1% 0%
Premium reimbursement plan, health reimbursement account, or other subsidy
1% 0% 50-499 employees
500-4,999 employees Midwest All
Evansville Aggregate
results Medicare-eligible retirees
1% 0%
1% 0%
Private exchange or connector, but not a contribution
1% 0%
Private exchange or connector and a financial contribution
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 118 3% ID
ID ID
Some other approach
35% ID
ID ID
Continue to provide drug coverage through standard plan and do not receive subsidy
7% ID
ID ID
Contract with vendor to offer PDP, EGWP or MA-PD plan
20% ID
ID ID
Offer a plan that wraps around a PDP
ID 50-499 employees
500-4,999 employees Midwest All
Evansville Aggregate
results
ID 29%
ID Receive 28% subsidy for
all / most covered retirees
Current approach to coordinating with Medicare Part D prescription
drug benefit
13% 49% 38%
Employer pays all Cost is shared Retiree pays all
Evansville Aggregate results
Midwest All
50-499 employees
500-4,999 employees
Contribution requirements for retiree-only coverage
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 120
15% 46% 39%
Employer pays all Cost is shared Retiree pays all
Evansville Aggregate results
Midwest All
50-499 employees
500-4,999 employees
Contribution requirements for retiree-only coverage
Medicare-eligible retirees
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 121 ID
ID 50-499 employees
500-4,999 employees Midwest All
Evansville Aggregate
results
ID ID
38% ID
Medicare-eligible retirees
38% ID
Pre-Medicare-eligible retirees
Average retiree contribution* as a percent of premium, when cost is
shared
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 122
Expect to continue offering retiree health coverage to new hires for the
next five years*
53%
Evansville Aggregate results
Midwest All 50-499 employees 500-4,999 employees
*Among employers that currently offer retiree health benefits to new hires
To pre-Medicare-eligible retirees
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 124
Definitions
• A consumer-directed health plan eligible for a Health Savings Accountis a high-deductible health plan with an employee-controlled account. Employer contributions are optional. Account funds roll over at year end and are portable.
• A consumer-directed health plan with a Health Reimbursement Accountis a health plan with an employer-funded spending account. Account funds may roll over at year end, but are not portable.
• Total health benefit costis the total gross cost for all medical, dental, prescription drug, MH / SA, vision and hearing benefits for all covered active employees and their dependents divided by the number of enrolled employees. Total gross annual cost includes employer contributions to a Health Savings Account. Employee contributions are also included but not employee out-of-pocket expenses.
• Medical plan costis the total gross cost for medical plans divided by the number of enrolled employees. Prescription drug, mental health, vision and hearing benefits for all active employees and their covered dependents are included if part of the plan. Dental benefits, even if a part of the plan, are not included in these costs. CDHP cost includes any employer account
contribution.
• Nationally projectable PPO/POS and HMO medical plan costsfor 2011 have been restated to include all prescription drug benefit costs (formerly, cost for carve-out prescription drug plans was not included in the medical plan cost, but will be going forward).
MERCER Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2012 125
Definitions, continued
• A mini-med or limited planis a health insurance plan that provides far lower benefits than the typical comprehensive major medical plan. The annual maximum amount payable typically ranges from $1,000 to $50,000.
• Unless otherwise noted, employers with multiple plans of the same type were asked to respond for the largest plan of each type(i.e., the one with the largest enrollment).
• Family coverageis the coverage level for an employee, spouse and two children. • A private exchangeis a marketplace for insurance run by a private company or non-profit
corporation that offers a choice of health plans and possibly voluntary products and services. Employers often provide a set contribution for each employee to spend on insurance. The exchange also typically provides an enrollment and administration platform with decision-support tools for employees to help them select appropriate coverage.