Company Strategies to Stretch Health Care Dollars Documented in New Survey
Washington — March 31
Faced with increasing costs for nearly every type of health care benefit, employers are shifting much of the additional cost to employees. At the same time, they are trying out cost containment strategies such as disease management and wellness programs.
These approaches are documented in the new 2008 Health Care Benefits Benchmarking Survey prepared by Abbott, Langer Association Surveys. Reviewing data provided by 124 respondents across the United States employing more than 121,000 workers, and analyzing their 225 medical plans and 128 dental plans, the report provides a baseline for employers wishing to benchmark their health plan costs and practices with other employers. This inaugural survey will be updated each year so that trends in health care costs and coverage can be identified to aid companies in their decision making.
Highlights of the survey include:
- How medical benefits are provided. Preferred Provider Organization (PPO) plans are the most prevalent type of medical benefits delivery — 50 percent of all medical plans reported, covering 67 percent of employees. Health Maintenance Organization (HMO) plans were less common, representing 24 percent of the plans offered but covering only 19 percent of employees.
- Cost of medical benefits through PPOs. Average employee cost for PPOs for employee-only coverage is $91.33 per month. Average employer cost for employee-only coverage is $363.36 per month, about 75 percent of the total premium cost.
- Dental coverage. Ninety percent offer dental plans, most often through Dental Preferred Provider Organizations (DPPOs). Average employee cost for employee-only coverage is $10.33 per month, while the average employer cost for employee-only coverage is $20.80 per month.
- Cost containment strategies. Fifty-seven percent offer wellness programs, 53 percent provide disease management programs and more than half have an Employee Assistance Plan (EAP) and/or provisions for alcohol/substance abuse and mental health services. Last year, 53 percent increased employee contributions to premiums, and 43 percent increased employee prescription co-payments or co-insurance. Large employers use self-insurance as a cost-saving measure, but only 14 percent of respondents with fewer than 500 employees have self-insured plans.
The new 2008 Health Care Benefits Benchmarking Survey report provides details on the findings listed above, as well as additional information including length of employment requirements for coverage; availability and cost of vision care coverage; breakouts by size and type of employer and geographic location, etc.
For those interested specifically in benefits for nonprofits, the 2008 Benefits in Nonprofit Organizations, 8th Edition will be available from Abbott, Langer in July 2008.