As employees flip through their open enrollment packets, they may notice substantial changes to their medical plan for 2010, from increases to employee contributions to introducing a wellness program, according to the 2009 Benefits & Talent Survey by Aon Consulting, the human capital consulting firm of Aon Corporation (NYSE: AOC).
Aon Consulting surveyed 1,313 employers nationwide in its 2009 Benefits & Talent Survey and found that 41 percent of employers are expecting to make more substantial changes to their 2010 medical program than they did this year. Specifically, 70 percent are planning to increase employee contributions and 67 percent are expecting to raise deductibles, co-pays, coinsurance or out-of-pocket maximums.
In addition, more than half of employers are expecting to introduce or expand a wellness program next year, and 34 percent are planning to introduce or increase financial incentives for wellness programs in 2010.
"As in year's past, many employers are expecting to shift additional health care costs to employees in 2010 to share the burden of double-digit rate increases," said John Zern, U.S. Health & Benefits Practice Director with Aon Consulting. "However, it may be more dramatic next year, as many organizations try to avoid taking other drastic measures such as layoffs or salary freezes. Conversely, the good news is found in that more than half of employers are planning to either introduce or expand wellness programs, in an effort to build a healthier and more productive workforce, and ultimately lower health care costs."
Short-term solutions
To reduce employer and employee health care costs, employers have been implementing various types of audits as a short-term savings solution. According to the Benefits & Talent Survey, 46 percent of organizations conducted a dependent eligibility verification audit in 2009 or earlier, and 20 percent are planning to do so in 2010 or later. These audits are designed to save on health care costs by ensuring only eligible dependents are covered.
"Employers who conduct dependent eligibility audits can see immediate savings ranging from 3 percent to 10 percent in dependent health care costs," said Tom Lerche, U.S. Health Care Practice Leader with Aon Consulting. "Achieving savings from removal of ineligible dependents may reduce the need for further employee layoffs and will ensure program integrity," he added.
Other audits employers are planning to implement in 2010 or later include electronic prescription drug (16 percent of employers); medical claims (13 percent of employers); and prescription rebate (12 percent of employers).
Long-Term Solutions
Not only are employers taking advantage of short-term cost savings opportunities, they are also offering wellness and disease management initiatives to help improve the health care cost trend in the long-term. The survey found 67 percent of employers have promoted exercise/physical activity in 2009 or earlier, and another 12 percent are planning to implement this initiative in 2010 or later. Additionally, 63 percent of respondents offer disease management programs and 10 percent plan to do so in 2010 or later.
Wellness programs rely on improved health to lower costs. In order to measure progress, organizations offer employees a health risk appraisal (HRA) and biometric screenings as benchmarks. In fact, the survey found 52 percent of organizations have already offered both an HRA and biometric screenings. What's more, 20 percent are planning to implement an HRA and 16 percent are planning to implement biometric screenings as early as next year.