Health Plan Offer Rates Since the ACA

A study by the Employee Benefits Research Institute (EBRI) reveals that large employers have had steady health insurance offer rates since passage of the ACA. In fact, 99% of employers with 1,000 or more workers offer heath insurance as do 93% to 95% of employers with 100 to 999 workers. However, offer rates have been falling since 2009 for employers with fewer than 10 workers, from 36% in 2008 to 23% in 2015. Offer rates for employers with 10 to 24 workers went from 66% in 2008 to 49% in 2015. Offer rates for employers with 25 to 99 workers went from 81% in 2008 to 74% in 2015.

An Update on 401(k) Plan Asset Allocations

Sixty-six percent of 401(k) assets were invested in stocks at year-end in 2014, according to a report by the Employee Benefit Research Institute (EBRI) and the Investment Company Institute (ICI). Participants’ assets were invested in equity securities through equity funds, the equity portion of balanced funds, and company stock. Twenty-seven percent of assets were in fixed-income securities, such as stable-value investments, bond funds, and money funds. The reports also reveals the following:

  • More 401(k) plan participants held equities at year-end 2014 than before the financial market crisis (year-end 2007), and most had the majority of their accounts invested in equities. For example, about three-quarters of participants in their 20s had more than 80% of their 401(k) plan accounts invested in equities at year-end 2014, up from less than half of participants in their 20s at year-end 2007. More than 90% of 401(k) participants had at least some investment in equities at year-end 2014.
  • More than 70% of 401(k) plans included target-date funds in their investment lineup at year end 2014. At year-end 2014, 18% of the assets were invested in target-date funds, and 48% of 401(k) participants in the database held target-date funds. Also known as life cycle funds, these funds are designed to offer a diversified portfolio that automatically re-balances to be more focused on income over time.
  • A majority of new or recent hires invested their 401(k) assets in balanced funds, including target-date funds. For example, at year-end 2014, two-thirds of recently hired participants held balanced funds in their 401(k) plan accounts. Balanced funds comprised 42% of the account balances of recently hired 401(k) plan participants. A significant subset of that balanced fund category is invested in target-date funds. Thirty-five percent of the account balances of recently hired participants were invested in target-date funds.
  • 401(k) participants’ investments in company stock continued at historically low levels. Only 7% of 401(k) assets were invested in company stock at year-end 2014, the same share as in 2012 and 2013. This share has fallen by 63% since 1999 when company stock accounted for 19% of assets. Recently hired 401(k) participants are less likely to hold company stock. At year-end 2014, less than 30% of recently hired 401(k) plan participants in plans offering company stock held company stock, compared to about 44% of all 401(k) participants.
  • 401(k) participants were less slightly likely to have loans outstanding at year-end 2014 than at year-end 2013. At year-end 2014, 20% of all 401(k) participants who were eligible for loans had loans outstanding against their 401(k) plan accounts, down from 21% at year-end 2013, although up from 18% at year-end 2008. Loans outstanding amounted to 11% of the remaining account balance, on average, at year-end 2014, down 1% from year-end 2013. Nevertheless, loan amounts edged up a bit in 2014.
  • The year-end 2014 average 401(k) plan account balance in the database was 5.4% higher than the year before, but may not reflect the experience of typical 401(k) participants in 2014.
  • The average 401(k) plan account balance tends to increase with participant age and tenure. For example, participants in their 30s with more than two to five years of tenure had an average 401(k) plan account balance of close to $25,000, compared to an average 401(k) plan account balance of nearly $275,000 among participants in their 60s with more than 30 years of tenure.

American Workers Choose Wages Over Benefits

American workers are satisfied with their health insurance benefits, but there is a long-term trend toward wanting more cash and fewer benefits, according to a survey by the Employee Benefit Research Institute (EBRI) and Greenwald & Associates. A third of workers surveyed would change the mix of wages and health benefits, which may reflect a growing desire for real wage growth. From 2012 to 2015, the percentage of workers who are satisfied with their health benefits fell from 74% to 66%. At the same time, the percentage who would rather have fewer health benefits and higher wages increased from 10% to 20%. For more information, visit ebri.org.

Consumers Are Not Preparing for Retirement

Consumers are more confident that they will have a comfortable retirement than they were during the recession, but they have not done much to plan for retirement, according to a survey by the Employee Benefit Research Institute (EBRI) and Greenwald & Associates. The survey reveals the following about workers in 2016:

  • 21% are very confident about having enough money for a comfortable retirement compared to 22% in 2015 and 13% in 2013.
  • 42% are somewhat confident compared to 36% in 2015.
  • 19% are not confident compared to 24% in 2015.
  • 11% with a plan are not confident about their financial security in retirement compared to 38% of workers without a plan.
  • 83% without a plan have less than $10,000 in their household’s savings and investments, excluding the value of their primary home and any defined benefit plans. In contrast, 35% of workers with a retirement plan have $100,000 or more in savings and investments.

Survey: Access to retirement plan inspires confidence

A survey from the Employee Benefit Research Institute says 21% of people in the workforce consider themselves very confident about funding a comfortable retirement. “There is a clear dichotomy between those who have some sort of retirement plan — that is, a defined-benefit or defined-contribution plan or [an] individual retirement account ­­– and those who do not,” said Craig Copeland, senior research associate at EBRI. “Those with a retirement plan are more likely to be very confident about their financial prospects in retirement compared with those who do not have a retirement plan.” Employee Benefit News (3/24)

Employees Worry About the Future of the Health Care System

Confidence about today’s health care system has remained fairly level among American workers in recent years, but they are worried about the future according to a survey by the Employee Benefits Research Institute (EBRI). The survey reveals the following:

  • 47% of workers are extremely or very confident about their ability to get the treatments they need today; 33% are confident when they look out over the next 10 years; and 26% are confident when they consider the Medicare years.
  • 42% are confident that they have enough choices about who provides their medical care today; 30% are confident when they look out over the next 10 years; and 25% are confident when they
  • consider the Medicare years.
  • 30% of workers are confident that they can afford health care without financial hardship today, 25% are confident when they look out over the next 10 years, and 24% are confident when they consider the Medicare years. For more information, visit EBRI.org.

Employment-based Health Coverage Holds Steady

Although health insurance coverage rates are rising, the percentage of Americans with employment-based coverage remains unchanged, according to a report by the Employee Benefits Research Institute (EBRI). In 2014, 88% of non-elderly people people were covered, up from 84.6% in 2013. Twelve percent of people under 65 were uninsured in 2014, down from 15% in 2013. Among the entire population, 13% had individual coverage in 2014 compared to 9% in 2013. There was no change in the percentage of the non-elderly population with coverage through an employment-based health plan. More people were covered by employment-based coverage in 2014 than in 2013 because of population growth, but the percentage with employment-based health coverage was unchanged at 62%.

Health Costs for Older Singles vs. Couples

During a two-year period, single and couple households ages 65 and older spent an average of $2,500 per-person on out-of-pocket costs for recurring health care services. Recurring services include doctor visits, dentist visits, and prescription drugs, according to the study by the Employee Benefit Research Institute (EBRI). However, there are large differences in non-recurring health care spending between older singles and older couples. This includes overnight hospital stays, outpatient surgery, home health care, nursing home stays, and other services. Singles 85 and older spent and average of $13,355 on non-recurring health care while couples 85 and older spent and average of $8,530 during the two-year period. Some of the largest differences involve home health care and nursing home expenses.

A Snapshot of Consumer-Driven Health Plans

A recent survey by EBRI and Greenwald & Associates finds the following about consumer driven health plans (CDHPs):

  • 13% of the privately insured population are enrolled in a CDHP; 11% are enrolled in a high-deductible health plan (HDHP); and 76% are enrolled in more traditional coverage.
  • 26 million people with private insurance are enrolled in a CDHP—a health plan associated with a health savings account (HSA) or health reimbursement arrangement (HRA), or an HSA-eligible health plan.
  • 63% of people in CDHPs have opened an HSA, 13% are in an HRA, and 24% are in an HSA-eligible health plan, but have not opened an HSA.
  • People in a CDHP or an HDHP are more likely to have cost-conscious behaviors compared to those in traditional plans. They are more likely to have checked whether the plan would cover care; asked for a generic drug; talked to their doctors about prescription options and costs; asked a doctor to recommend a less costly drug; talked to their doctors about other treatment options and costs; developed a budget to manage health care expenses; and used an online cost-tracking tool provided by the health plan.
  • People in a CDHP are more likely to have talked to friends, family, or colleagues about the plans; attended a meeting where health plan choices were explained; and consulted with their employer’s HR staff about health plan choices.
  • People in an HDHP are more likely to have visited the health plan’s website to learn about their plans; talked to friends, family, or colleagues about the plans; used other websites to learn about their choices; and consulted with an insurance broker to understand their plan choices.
  • CDHP enrollees are more likely to take advantage of wellness programs, such as health-risk assessments, and health-promotion programs, and biometric screenings.
  • Financial incentives mattered more to CDHP enrollees than to traditional-plan enrollees.

Millennials Are Less Interested in Workplace Benefits

Today’s youngest workers are less interested and knowledgeable about their benefits, and prefer life insurance over health insurance, according to a study by the Employee Benefit Research Institute (EBRI) and Greenwald & Associates. (Millennials were born 1982 to 2002; Baby-Boomers were born from 1946 to 1965; and Generation Xers were born from 1966 to 1976). The study reveals the following about Millennials when compared to GenXers and Baby Boomers:

  • Millennials are less likely to say that health insurance is the most important benefit.
  • Millennials are more likely to say that life insurance and paid-time-off are the most important benefits.
  • Millennials are less likely to say that benefits are extremely important in their decision to accept or reject a job.
  • Millennials are more likely to be open to non-traditional ways of obtaining benefits.
  • Millennials are more likely to say they don’t know about their benefits.
  • Millennials have lower participation in various employee benefit programs.

Last Updated 12/01/2021

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