If you can answer this question for prospects, youll have their full attention: Do you know how your plan design choices compare to your competitor down the street?
With the economy moving and the Affordable Care Act in full swing, companies are facing tough plan design decisions. Employers are increasingly leaning on insurance brokers for information about how to manage health care costs while still remaining competitive.
Up until recently, there wasnt an easy way for brokers to provide detailed plan design benchmarking data. Brokers who had the time and resources were scouring surveys from various sources and then manually combining the data into a presentable format for clients.
Zywave tackled this problem a few years ago by creating an annual Health Plan Benchmark Report. The 2014 version was released this April and is backed by the largest data set in the country from nearly 31,000 employers and more than 50,000 plans.
A perk of creating this benchmark report in-house is that it provides Zywave with an exciting opportunity to examine large-scale trends in plan design offerings around the country.
What are we seeing this year?
Across the board, we continued to notice the trend of employers seeking means to cost-share with employees in order to balance out rising premiums and the financial impact of ACA compliance. From increasing out-of-pocket maximums to increasing deductibles, higher co-pays and less generous coinsurance, employers are looking for any and all strategies to reduce the costs associated with providing health insurance.
Smaller organizations are really feeling the pinch.
This trend was amplified when the data was zoomed in on groups with fewer than 100 lives. From 2013 to 2014, we saw the following changes:
- Groups offering an individual out-of-pocket maximum of $5,000+: 4% increase
- Groups offering an individual deductible of $2,000+: 2% increase
- Groups with an ER co-pay of $150+: 4% increase
- Groups with an office visit co-pay of $35+: 18% increase
- Groups with a prescription drug deductible of $250+: 8% increase
- Groups offering 100% coinsurance: 6% decrease
Larger organizations are starting to prioritize attracting and retaining talent.
Group size played a large role in determining the priorities of employers and their health plan offerings in 2014 more than it has in years past. While cost savings was still an overall trend, the data identified outliers: Some larger organizations (with more than 100 lives) are gravitating toward more generous plans, likely as an effort to recruit top talent in a market that is becoming increasingly fierce.
From 2013 to 2014, we saw the following changes in groups with more than 100 lives:
- Groups offering an individual out-of-pocket maximum of less than $249: 3% increase
- Groups offering an individual deductible of less than $249: 2% increase
- Groups offering an office visit co-pay of less than $9: 3% increase
We found that the strategy behind plan design was polarized in 2014 in a way it hasnt been in the past. Its more important than ever to be aligned with your client or prospects mentality before you walk into the room with plan design recommendations.
This tool is perfect for renewal time or to challenge an incumbent. More importantly, it is a lot of fun to be able to help these employers make sound decisions. Oftentimes, thats the start of a prosperous relationship.
OBrien is CEO of Zywave. Reach him at email@example.com.
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