In its annual review of employer attitudes toward health plans, J.D. Power and Associates finds that although fewer than 15% will drop health coverage altogether, close to half of companies are likely to shift health benefits to a private exchange model.
The 2012 Employer Health Plan Study, now in its third year, reveals that employers are preparing to pursue alternative methods of offering health care benefits to employees in an effort to contain costs — including defined contributions, exchange purchasing and vouchers — but still are stopping short of dropping health coverage entirely.
Reflecting the current uncertainty regarding future costs of offering health benefits, 13% of fully-insured employers and 14% of self-funded employers say they “definitely will not” or “probably will not” continue to sponsor employee coverage, according to the study, released Monday.
Rick Millard, senior director of the health care practice at J.D. Power and Associates, says this is the first year they have asked this question specifically in the survey.
“We did so because in the year since we last fielded this study there have been a lot of statistics floating around — some of them full of doom [about] how employers are going to walk away from coverage for their employees,” says Millard. “I don’t think these figures [that we found] are catastrophic or as alarming as some of the numbers that have been in studies conducted almost a year ago.”
Still, employers are open to other options. Almost half of respondents (47%) say they “definitely will” or “probably will” switch to a defined contribution model within a private exchange, allowing employees to select the coverage that best fits their needs. In J.D. Power’s 2012 Member Health Plan Study, published earlier this year, 42% of respondents with employer-sponsored coverage expressed interest in the defined contribution model as well.
“Employers face many choices in how to best serve their employees with competitive coverage at affordable costs,” Millard says. “On the one hand, employers are quite receptive to alternative purchasing models, but on the other hand they’re not in large numbers prepared to walk away from offering health insurance coverage for employees.”
Among other key study findings:
* Employers view fees charged by doctors and hospitals as the top reason for high health care costs, while employees most frequently view health insurance companies’ marketing or administrative costs as the primary concern.
* Kaiser ranks highest in employer satisfaction among fully insured plans with a score of 716 (on a 1,000-point scale). Kaiser performs particularly well in account servicing, problem resolution, program offerings, cost and employee plan service experience.
* Aetna ranks highest in employer satisfaction among self-funded plans, with an overall score of 680 and performing particularly well in account servicing.
The study is based on responses from 6,579 employers, with quotas to assure an adequate distribution of small, medium and large companies. The study was fielded between April and May, measuring six key factors: employee plan service experience, account servicing, program offerings, benefit design, problem resolution and cost.
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