Prescription Drug Use Rises for the Newly Insured

A survey of more than 3,000 U.S. employers finds that 54% are paying at least 5% more for employee medical insurance this year. Nearly one in four has seen increases of at least 10%, according to a study by Arthur J. Gallagher & Co. Sixty-seven percent say that medical and pharmacy benefits are the cornerstone of their employee benefit package and an important tool to recruit and retain talent in a tightening labor market. Telemedicine, now used by 24% of employers, is predicted to reach 42% in 2018. Narrow network healthcare plans show a growth trend from 18% to a predicted 27% in 2018. A rise in adoption of consumer directed health plans is expected from 36% to 51% in 2018. Self-insuring is expected to grow from 28% to 38% in 2018. Fewer than 5% of employers have used a private exchange, but that figure is expected to triple by 2018. Employers that excel at healthcare cost management take a comprehensive, data-driven and multi-year approach to compensation and benefit planning. However, just 8% of employers do multi-year planning with multiple data inputs. Seventy-six percent plan their benefits year-to-year, which puts them in a reactive position and less able to manage costs. For more information, visit ajg.com/NBS2016.

How Medicare Advantage Plans Can Increase Consumer Satisfaction

Medicare Advantage plans are more likely to achieve high satisfaction scores when they offer a consistent product message and brand experience and have control over the delivery of care, according to a J.D. Power study. Members frequently choose a plan they understand and find easy to work with. The study measures member satisfaction with Medicare Advantage plans based on six factors in order of importance: coverage and benefits (26%); customer service (20%); provider choice (15%); cost (14%); information and communication (13%); and claims processing (13%).

Improving communications with enrollees is one of the greatest opportunities for health plans to improve member satisfaction. It’s the only factor in the study that has not seen a significant improvement in member satisfaction. Valerie Monet, director of the insurance practice at J.D. Power, said that many plans have multiple product design features and come with technical manuals that are 20 pages or longer. Expecting members to be experts on these services and benefits is a losing battle for the plan and the member. Members expect their plan to provide guidance, ranging from assistance in selecting a doctor to helping them understand prescription costs.

Forty-eight percent of members agree strongly that their health plan is a trusted partner in their health and wellness, which increases satisfaction by 166 points. Satisfaction is 136 points higher among the 89% of members who completely understand how to find a doctor under the plan. Satisfaction is 110 points higher among the 88% of members who say their doctor spends the right amount of time with them.

Members expect immediate attention or advice when they call their health plan provider. Forty-one percent of those who called their plan had to give the same information more than once to get their issue resolved. Only 35% of members said that customer service provided all of the information they needed on the costs of prescription medications. Ninety-one percent of customers who are delighted with their Medicare Advantage plan (satisfaction scores of 901 or higher), say they will definitely renew their policy, and 89% will definitely recommend their plan to family and friends. Loyalty drops to 71% and advocacy to 66% among members who are pleased with their plan (scores of 751-900). Plans garnered the following member-satisfaction scores:

  • Kaiser Permanente 851
  • Highmark 791
  • Humana 782
  • UnitedHealthcare 775
  • Cigna 774
  • Aetna 773
  • Anthem 765
  • Health Net 756
  • WellCare 742

In 2016, members reported an average increase of $117 in annual premiums to $1,497. They also have more out-of-pocket expenses. On average, member deductibles are $1,705 in 2016, a $310 jump from 2015. Satisfaction is 136 points higher when members completely understand their out-of-pocket costs. Monet said that members are more satisfied and see the value of their plan when they have a better understanding of how much they are paying and what the costs cover.” For more information visit http://www.jdpower.com/resource/us-medicare-advantage-study.

LGBT Employees and Benefits: Impact of Marriage Equality

A year after the Supreme Court’s historic marriage equality ruling (Obergefell v. Hodges, June 2015), Lincoln Financial surveyed LGBT employees about their benefits. Since the ruling, 28% of the LGBT community overall, and 35% of those married or in a domestic partnership have reevaluated their workplace benefits, enrolled in a new benefit, or increased their contribution to an existing benefit. Thirty percent are making changes to their workplace benefits as a result of the ruling. But 50% are still unaware of how the ruling affects their benefits. Thirty-eight percent of LGBT employees who are married or in a domestic partnership are not aware how the marriage equality ruling affects their workplace benefits. The study also finds the following:

  • 14% of LGBT employees who are married or in a domestic partnership have enrolled in a new non-medical insurance plan.
  • 11% of LGBT employees have enrolled in a new health insurance plan.
  • 7% LGBT employees have made changes to their retirement plan by enrolling in a new plan or increasing contributions.
  • 51% of LGBT employees would like to speak with someone about their benefits.

For more information, visit http://newsroom.lfg.com/mood-of-america-special-report

Voluntary benefits that improve financial wellness can boost the bottom line

People who are under financial stress are less productive employees, bringing down businesses’ bottom lines, studies show, but employers can help by offering education, tools and voluntary benefits. “In addition to securing online financial education resources, companies can take advantage of value-added programs and financial wellness platforms offered by their current benefit providers, as well as other non-traditional voluntary benefits, such as financial counseling services and employee purchase programs that address further aspects of financial wellness,” Elizabeth Halkos writes.

BenefitsPro.com (8/12)

Younger Consumers Favor Income Stream Life Insurance Benefits

Forty percent of consumers under 40 prefer a monthly life insurance income benefit while about 30% favor a lump-sum payment, according to a LIMRA survey. Scott Kallenbach of LIMRA noted that life insurance is most often paid as a lump sum. But the study reveals that products offering monthly income would have strong appeal among younger and middle class consumers. Offering these products could be a way to reach these consumers more effectively. Sixty-one percent of all consumers own life insurance to replace lost income, and 44% own life insurance to supplement retirement income. When consumers were asked about a policy that could change with their needs, 70% expressed interest with one third being very or extremely interested in these flexible products.

Pet Health Insurance Is One of the Fastest-Growing Employee Benefits

One in three Fortune 500 companies offers pet insurance as a voluntary benefit, according to Nationwide. As one of the fastest-growing voluntary benefits in the U.S., more than 5,000 companies and organizations have added Nationwide pet insurance to the voluntary benefits portfolio, including Chipotle Mexican Grill, Hewlett-Packard, Levi Strauss & Co., Microsoft, T-Mobile, Xerox, Adidas, and Yahoo!. “Since 65% of Americans own at least one pet, two-thirds of employees may be shouldering sizable pet-care costs. Offering pet insurance as a voluntary benefit will appeal to prospective pet lovers and help retain pet-owning employees,” said Scott Liles, president and chief pet insurance officer for Nationwide. As the popularity of pet health insurance expands, some companies are subsidizing a percentage of their employee’s cost. Several employers now pay as much as 100% of their employees’ pet insurance premiums. “With the cost of core benefits on the rise, companies are looking for offerings that can be added to a benefit portfolio at no expense to the employer. Pet insurance fills that need,” said Liles

Employees Appreciate Voluntary Insurance Benefits

Seventy-nine percent of employees see a growing need for voluntary insurance compared to last year. And of those, 60% say the need is driven by the rising cost of medical services, according to an Aflac survey. Employees who are offered voluntary benefits report higher satisfaction with their jobs and their benefits. Employees whose work site offers voluntary benefits are more likely to say the following:

  • They are prepared to pay for out-of-pocket expenses not covered by major medical/health insurance related to an unexpected serious illness or accident (73% versus 56%).
  • They are extremely or very satisfied with their jobs (73% versus 57%).

Employers Want Guidance About Voluntary Benefits

Thirty-nine percent of employers that don’t have a financial advisor for voluntary benefits say it would be extremely valuable to have one, and 57% say it would be at least somewhat valuable, according to a study by MassMutual. The study, conducted by Greenwald & Associates, surveyed 565 U.S. employers ranging from those with fewer than 25 employees to those with 1,000 or more. Tom Foster of MassMutual said, “Employers are increasingly looking for help from financial advisors with voluntary benefits as their employees’ financial needs become more complex. Our research shows that advisors with the appropriate knowledge and expertise may have a clear and compelling opportunity to expand their financial practices to offer at least some guidance about voluntary benefits.”

Thirty-three percent of firms with fewer than 25 employees say such assistance is extremely or very valuable compared to 55% of firms with 1,000 employees or more. Seventy-five percent of the smallest employers and 80% of larger firms say that such advice as at least somewhat valuable. Fifty-three percent of employers that work with a voluntary advisor say they got excellent or very good advice and 77% say that got good advice.

Sixty-one percent of employers that have an advisor encourage employees to take advantage of retirement savings and other voluntary benefits compared to 49% of employers that don’t have an advisor. Also, 48% of firms with an advisor promote financial well-being for employees compared to 33% of firms without an advisor. Employers that participated in the survey offer the following insurance benefits in order of popularity: healthcare (92%), dental (73%), life (72%), vision (60%), short-term disability (52%), long-term disability (51%), accident (32%), employee assistance program (21%), wellness program (20%), critical illness (17%), cancer (16%), and long-term care (13%).

When Midsize Employers Offer HDHPs, 34% of Employees Elect Them

Thirty-four percent of employees who work for midsize employers would choose a high deductible health plan (HDHP) if given the choice, according to a report by Benefitfocus. Millennials over 26 are the most likely to opt in at 40%. Thirteen percent of employers offer at least one HDHP. Regardless of  whether the plan is a PPO or HDHP, employees face higher out-of-pocket costs. With rising copays and coinsurance, the average family could spend nearly 40% more on health care than on food in 2016. To close the gap, many employers are funding health savings accounts (HSAs) and flexible spending accounts (FSAs). Yet adoption is low at large and midsize companies. On average, eligible employees contribute less than half the maximum amount allowed. Shawn Jenkins, Benefitfocus CEO, said that employers will drive more choice and innovation in  benefits and in the plan selection process in order to attract and retain talent. He added that, as the market shifts toward consumer-driven health plans, employers must make make it a top priority to offer decision support, education, and financial wellness resources.

The Benefit Gap for Small Businesses

Health insurance is offered to 96% of employees at large and small companies and 89% of employees at small-businesses, in particular. But the study by Lincoln Financial reveals a much larger gap when it comes to other benefits:

Benefits offered Small Business Employees Employees of businesses of all sizes
Dental Insurance 74% 91%
A retirement plan 72% 89%
Vision insurance 66% 84%
Life insurance 62% 81%
Disability insurance 52% 74%

Employees at small businesses say that it’s important for their employers to offer these benefits:

  • 90% a retirement plan.
  • 87% dental coverage.
  • 83% vision insurance.
  • 76% life insurance.

Almost 70% of employees at small businesses say that benefits have influenced their employment decisions. Business-continuation strategies are critical since more than 50% of small-business owners are 50 to 85. Life insurance can help ensure that the business continues in the event of the death of an owner, co-owner, or key employee.

Last Updated 10/14/2020

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