Why Employees Should Consider Self Funding

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

Shawn Pynes, Principal of Barney & Barney’s Employee Benefits division. Benchmarking data in white paper is based on responses from more than 330 employers and 1,084 benefit plans in the U.S. The following are key findings:

• PPO plans are 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.
• Over the past three years, office visit copays have been creeping up for PPO and HMO plans. Copays have risen from an average of $19 to $21 for PPOs and from $20 to $22 for HMOs 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% with PPO plans.
• The average copay for an emergency room visit has increased steadily over the past few years across PPO and HMO plans at $119 per visit.

Last Updated 10/20/2021

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