United Benefit Advisors recently released the results of its 2012 Health Plan Survey. Since it’s the largest and most comprehensive health plan benchmarking survey in the industry, the results are always interesting. We analyze responses from 11,711 employers sponsoring 17,905 health plans nationwide — making our survey nearly 3 times larger than the next two largest benchmarking surveys combined! Such comprehensive data is crucial to benefit advisors as they counsel employers. I’d like to share some of our data around two questions I get most frequently:

Why are plan costs so much higher in the Northeast?

The 2012 UBA Health Plan Survey helps explain why. Of all health plans in the Northeast, 33.6% have no single deductible, compared with just 8.4% and 4.1% in the Southeast and Central regions, respectively. In addition, 76.9% of all plans in the Northeast provide 100% in-network coinsurance. That’s compared with a low of 27.8% in the Central region and an average of 31.6% among the remaining regions.

Why shouldn’t I benchmark plans with national averages?

Benchmarking costs with more granular data gives employers the best opportunity to see how their plan stacks up against competitors’ plans so they can better understand and communicate the value of their benefits to their employees. Consider a midsize design firm in Atlanta whose single cost under their CDHP is $409. Compared to benchmarks for all plans ($456) this plan appears to be $57 less than the national average. But when compared with other CDHPs in the Southeast region ($380), this employer’s cost is actually $29 per month more expensive than the average. Furthermore, when you compare this firm to its closest peers, using just the Georgia state benchmark ($429), their monthly single premium is actually $20 less than its competitors in the state. As you can see, depending on the unique variants for each business, this added data become crucial when communicating value to employees! 

Mangan is CEO of United Benefit Advisors (UBA), an independent employee benefits advisory organization with more than 270 offices throughout the U.S., Canada and the U.K.

 

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