Barney & Barney’s report evaluates best approach to managing employee benefits

Mid-sized employers should consider self-funding employee benefits, move to a private exchange or establish a defined contribution approach to control health care costs over the next decade, according to a new white paper by Barney & Barney, a Marsh & McLennan Agency LLC Company.

"Employers will bear an even bigger share of the cost burden and need to implement strategies that balance cost savings and taking care of employees," said Shawn Pynes, Principal of Barney & Barney's Employee Benefits division. "The Benefits Tightrope report evaluates the best approach to managing employee benefits in the post-health care reform era."

The Benefits Tightrope is comprised of three sections. Part I is an overview of employee benefits programs, costs, and trends based on Barney & Barney's 2013 proprietary benchmarking database. Part II is an analysis of the self-funding method and the use of a private exchange with a defined contribution. Part III includes Barney & Barney's recommendations for rethinking employee benefits strategy.

The benchmarking data in The Benefits Tightrope was based on responses from more than 330 employers and 1,084 benefit plans in the U.S. Among the key findings:

• PPO plans continue to be the most costly to employers and employees. The employee-only premium is now more than $600 per month on average. Employees are responsible for $168 of that amount on average.
• Office visit copays are creeping up slowly for PPO and HMO plans. Copays have risen from $19 to $21 on average for PPOs and from $20 to $22 on average for HMOs over the past three years.
• Employers are offering more low-cost options, including HMO plans and CDHPs. The number of HMO plans offered jumped 15% from 2013 to 2014. CDHP implementation grew by 13% over the same time period, compared to just 4% growth in PPO plans.
• The average copay for an emergency room visit has increased steadily over the past few years across PPO and HMO plans. It is $119 per visit.

SOURCE Barney & Barney