Majority Of Employers Plan To Offer Health Benefits Over Next Three To Five Years

The majority of employers (94 percent) plan to continue to offer health benefits to their employees over the next three to five years, according to recent research from consultant Aon Hewitt. However, the survey found that almost two-thirds plan to move away from a traditional “managed trend” approach, to one that requires participants to take a more active role in their health care planning.

“The health care marketplace is becoming increasingly complex. New models of delivery, new approaches to managing health, and new compliance requirements are challenging employers to think differently about their role in ‘owning’ health insurance responsibilities for employees and their dependents,” said John Zern, executive vice president and the Americas Health & Benefits practice director for Aon Hewitt. “Employers are staying in the game, but they are taking bold and assertive steps to achieve more effective results—and they are doing so at a faster pace than we’ve seen in prior years.”

Pay for performance. Aon Hewitt’s survey found that in the next three-to-five years, almost 40 percent of employers expect to migrate toward a “house money/house rules” approach. Under this model, employers may reserve a portion of their health care dollars for those employees who exhibit good health behaviors or who can show measurable progress toward their health goals. For example, participants who take health risk questionnaires and biometric screenings may be rewarded in the form of lower premiums or access to broader health coverage. Other employers may waive prescription drug copayments if an employee demonstrates they are following their doctor’s orders with regard to a chronic condition. Lastly, some leading-edge employers are working with health plans to incentivize participants to use a small provider network of high quality, cost-efficient providers.

“Over the past decade, employers have reserved an increasing portion of their cash compensation program to pay-for-performance bonus programs,” said Zern. “We see similar approaches emerging with health benefits, which reward those employees who actively participate to achieve improved health outcomes.”

Private health exchanges. While still an emerging trend, private health care exchanges are quickly generating interest among employers, Aon Hewitt noted. In this model, employers continue to financially support health insurance, but enable employees to choose from multiple plan options and insurance carriers via a competitive, fully insured health insurance marketplace. The exchange model assumes many of the health benefits responsibilities that employers historically manage—including plan design, insurance carrier selection and management, user experience, and behind-the-scenes administration. According to Aon Hewitt’s survey, about 28 percent plan to move into a private health care exchange over the next three-to-five years.

“Private health care exchanges allow employers to re-create a competitive marketplace for health insurance based on consumer choice, which will encourage insurance companies to drive the system toward greater efficiency,” said Jim Winkler, chief innovation officer for the U.S. Health & Benefits practice at Aon Hewitt. “While this option may not be a fit for every employer, it is increasingly attractive to those organizations that want to offer employees health care choice while lowering future cost trends and lessening the administrative burden associated with sponsoring a health plan.”

The survey contains responses from nearly 800 large and mid-size U.S. employers, covering more than 7 million employees. For more information, visit http://www.aonhewitt.com.

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