EMERGING TECH COMPANY BENEFITS SURVEY · survey info this is the first mercer emerging tech...

H E A L T H W E A L T H C A R E E R

E M E R G I N G T E C H C O M P A N Y B E N E F I T SS U R V E Y

2 0 1 6 B E N C H M A R K I N G R E S U L T S

© MERCER 2016 1

S U R V E Y I N F O

T H I S I S T H E F I R S T M E R C E R E M E R G I N G T E C HC O M PAN I E S S U R V E Y W I T H A F O C U S ON :

VAR I O U S P E R Q U I S I T E S O F F E R E D AM O N G T H E G R O U P

& B E N C H M AR K I N G F OR M E D I C AL , D E N TAL AN DV I S I O N P R O G R AM S

T HE S U RV E Y G RO UP R E P R E S E NT S :

3 5 C O M PAN I E S2 5 , 0 0 0 E L I GI B LE E M P L OYE E S

$ 2 5 0 M I N AN N U AL M E D I C AL S P E N D

F I GU R E S US E D AR E AL L S I M P LE AV E R AG E SAM O N G AL L R E S P O N D E N T S

( N O W E I GH T IN G B A S E D O N E N R O L L M E N T, E T C . )

© MERCER 2016 2

T O P S T O R I E S

Just about half of companiessurveyed had an unlimited or

untracked PTO policy. Untrackedemployees took around 20%

more time off

Paid Time Off

Low prevalence of advancedautism benefits, infertility

benefits or LGBT benefits.These benefits are a hot topic

among mature tech firms

What wasn’t offered?

The benefits programs offered are veryrich relative to national benchmarks.

Employees paid 26% (14% contributions +12% out of pocket) of total covered cost

compared to 40% nationally

Rich Plan Benefits

International Presence

66% of those surveyed had aninternational population whichwas, on average, 32% of the

total population

As this group ages, and grows infamily size to mirror mature tech firmsannual medical costs are projected to

rise by $2,168

Benefit Costs - TomorrowBenefit Costs - Today

The average total annual cost peremployee was $12,272 – in line with

national benchmarks$10,987 Medical + $1,098 Dental +

$187 Vision

© MERCER 2016 3© MERCER 2015

PERQUISITES

© MERCER 2016 4

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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Tuition Assistance

Professional Designation expense reimbursements

Paid Relocation program

Employer Paid Housing

Employer Subsidized Housing

Commuter Shuttle Service

Onsite Bikes (or other mode of transport)

Electric vehicle charging stations

Other Subsidized Commuting Benefits (Bus Passes, Etc.)

Advanced Infertility Benefits (i.e. Egg-freezing, In-vitro fertilization)

On-Site Clinic

LGBT Specific Benefits

Advanced Autism Benefit (i.e. ABA therapy)

Mobile Communication of Benefits

Telemedicine Offering

401K Company Matching

P E R Q U I S I T E S ( 1 / 3 )

W HAT P E R K S W E RE O F FE R E D TO D OM E S T IC E M P L OYE E S ?

© MERCER 2016 5

Food

&D

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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

On-site entertainment events (I.e. concerts)

Team outings / vacations

Company Discounts at retailers/ telecoms, etc.

Fun Room (Arcade, Foosball, Ping Pong, etc.)

Smoothie Bar

Food Allowance (Amazon Fresh, post mates, etc.)

On-Site Barista

Free Dinner

Food - Company Subsidized (On-site cafeteria orrestaurants)

Free Breakfast

Free Lunches

Beer/Wine Fridge

Free Snacks

Free Beverages (Cans/Bottles/Coffee)

P E R Q U I S I T E S ( 2 / 3 )


© MERCER 2016 6

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Life

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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Matching company charitable gifts

Hackathon Events

Phone / TV Credits

Desk / Computer Setup Budget

"Puppy Therapy" - Animals on-site for stress relief (can…

Free Fitbit or other wellness tracker

Subsidized Gym membership

On-site massages / Massage Credits

Onsite Gym

Wellness Program

On-Site health checkup / flu shot

Onsite Shower

Standing Desks

Daycare Services

100% Employer Paid Vacations (ie: airfare, lodging, etc)

Laundry Service (Pick-up or on-site)

Use of company time for personal projects

Allow pets at work

Relaxation Room / Sleep Pods

Company Sponsored volunteer events

P E R Q U I S I T E S ( 3 / 3 )


© MERCER 2016 7

P A I D T I M E O F F

H O W M U C H T I M E O FF W OR K D I D E M P L O YE E S R E C E I V E A N D U S E ?

4 6 % O F T HO S E S U RV E YE D H AV E AN U N LI M I TE D /U N T R AC K E D P T O P O L I C Y

AM O N G T H O S E W I T H OU T ANU N L I M I T E D P TO P O L I C Y:

The average new hire earned15.8 PTO days annually

Which increased at rate of 1 dayfor each year of tenure

Employees used an average of12.9 days a year…

…Compared to those which had unlimitedPTO, who used an average of 15.8 vacation

days/year

44% tracked sick days separatelyfrom Paid time off

With an average of 7 Sick daysoffered annually

© MERCER 2016 8

I N T E R N A T I O N A L B E N E F I T S - P R O F I L E

6 6 % O F E M P L OYE R S H AV E ANI N T E R N AT I O N AL P O P U L AT I O N

W IT H AN AV E R AG E O F 3 2 %O F I N TE R N AT I O N AL

E M P L OYE E S

*Among companies with a population in a country

I N T E R N AT I O N AL E M P L O YE E S W E R E A S U B S TAN T I AL P O R T I O N O F T H EG R O U P P O P U L AT I O N :

Country% withPopulation*

UK 65%Germany 52%Canada 35%Australia 30%China 26%France 22%Japan 22%India 17%Netherlands 17%Brazil 13%Ireland 13%Israel 13%Singapore 13%Philippines 9%Hungary 9%Austria 4%Bolivia 4%England 4%Hong Kong 4%Russia 4%South Korea 4%Switzerland 4%Taiwan 4%Colombia 4%Indonesia 4%*among those with an Int'l Population

34%

36%

11%

9%

29%

China

Canada

Australia

Germany

UK

Average % Employees for top countries*

© MERCER 2016 9

I N T E R N A T I O N A L B E N E F I T S - P E R Q U I S I T E SAM O N G T H O S E W I T H AN I N T E R N AT I O N AL P O P U L AT I O N , E M P L O Y E R SO FF E RE D T HE F OL LO WI N G P E R KS :

0% 10% 20% 30% 40% 50% 60%

Advanced Autism Benefit (i.e. ABA therapy)

LGBT Specific Benefits

Employer Subsidized Housing

Free Dinner

Onsite Gym

Tuition Assistance

401K Company Matching

Onsite Shower

Food - Company Subsidized (On-site cafeteria or restaurants)

On-site massages / Massage Credits

Mobile Communication of Benefits

Other Subsidized Commuting Benefits (Bus Passes, Etc.)

Free Breakfast

Wellness Program

Professional Designation expense reimbursements

Subsidized Gym membership

Free Lunches

Paid Relocation program

Expat International Medical


BENEFIT PROGRAMBENCHMARKING

© MERCER 2016 11

Plan Type PPO EPO HMO Kaiser CA HRA-CDHP HSA-CDHPIndividual / Family Deductible(INN) $486 / $1,195 $0 / $0 $154 / $538 $24 / $476 $2,367 / $4,733 $2,093 / $4,186Financial Individual / FamilyOOPM (INN) $3,038 / $6,321 $2,571 / $5,143 $2,777 / $5,338 $1,905 / $3,738 $3,833 / $7,667 $3,700 / $7,341

HRA / HSA Account Funding(among those with funding) N/A N/A N/A N/A $2,200 / $4,400 $1,046 / $1,985

(64% had funding)

Coinsurance (INN) 12% 7% 9% 3% 10% 10%

Physician Visit (INN PCP/SPC) $20 / $24 $20 / $27 $21 / $30 $20 / $23Coinsurance after

ded.Coinsurance after

ded.

Hospital Stay (INN) 13% after ded. $229 $265 $193Coinsurance after

ded.Coinsurance after

ded.Generic / Brand NameFormulary / Non-Formulary $11 / $30 / $55 $11 / $29 / $39 $10 / $29 / $43 $11 / $27 / $12 $13 / $28 / $45 $11 / $30 / $51

2016 Plan Values 88% 92% 91% 92% 90% 80%

2016 Group Average Plan Designs

M E D I C A L P L A N B E N C H M A R K I N G

M E D I C A LB E N E F I T S C O S T A N

A V E R A G E O F$ 1 0 , 9 8 7 A N N U A L L Y

O V E R AL L A V E R AG EP L A N A C T U A R I A LV A L U E * ( A V ) W A S

8 8 . 3 %

C D H P P L A N S M A Y N O T B EO P T I M I Z E D D U E T O S I Z AB L E

C O M P A N Y F U N D I N G A M O U N T S

* A C T U A R I A L V A L U E I S T H E % O F C O V E R E D C O S T S P A I D B Y T H E P L AN

© MERCER 2016 12

M E D I C A L C O N T R I B U T I O N B E N C H M A R K I N G

Plan Type PPO EPO HMO Kaiser CA HRA-CDHP HSA-CDHP% with Zero Contributions 10% 29% 0% 19% 33% 19%

Average contributons(for those with non-zero contribution)

Employee Only $84 $102 $43 $39 $106 $46

Employee + Spouse $269 $241 $182 $188 $242 $174

Employee + Child(ren) $198 $111 $119 $146 $88 $129

Employee + Family $435 $343 $330 $309 $364 $298

Plan Count by Type 48 7 13 21 3 21

2016 Group Average Plan Contrbituions

E M P L O Y E E S P A I D1 7 % O F G R O S S

M E D I C A L C O S T S

1 O F 5R E S P O N D E N T S

O F F E R E D A F R E EM E D I C A L P L A N

© MERCER 2016 13

M E D I C A L P L A N B E N C H M A R K I N G

Plan costs varied bytype, and the mix of

plan types offered canaffect overall costs

Generally HSA andKaiser plans were

the lowest costoptions

while PPO (andHRA) Plans werethe highest cost

offerings

Looking at cost sharing:Kaiser had the lowest cost

sharing on both a grossand allowed basis

© MERCER 2016 14

2016 Group AverageDental Plan

Individual in-network deductible $46

What is the maximum annualbenefit per participant? $1,868

What is the lifetime maximumbenefit for orthodontia? $1,500

Is orthodontia available to adults? 74% Offered to adults

Coinsurance for:

Preventive services 100%

Basic and diagnostic services 88%

Major services 58%

Orthodontia 57%

D E N T A L P L A N B E N C H M A R K I N G

D E N TAL B E N E F IT S C O S T ANAV E R AG E O F $ 1 , 0 9 8 AN N U AL LY

E M P L O Y E E S PAI D 2 2 % O FG R O S S D E N TAL C O S T S

2016 Group AverageDental Plan Contributions

% with Zero Contributions20%

Average contributons(among those with non-zero contribution)

Employee Only $9Employee + Spouse $26Employee + Child(ren) $25Employee + Family $50

© MERCER 2016 15

E M P L O Y E E S PAI D 2 6 % O FG R O S S V I S I O N C O S T S

V I S I O N P L A N B E N C H M A R K I N G

2016 Group Average Vision Plan

In Network Eye exam Copay $12

In Network Lens Allowance 80% had copay only20% had an allowance, averaging: $147

In Network Frames Allowance 14% had copay only86% had an allowance, averaging: $142

Contacts allowance (in lieu ofglasses)

23% had copay only77% had an allowance, averaging: $138

How often are Exams Covered? Every 12 Months

How often are Lenses covered? Every 12 Months

How often are Frames covered? Every 12 months: 55%Every 24 months: 45%

V I S I O N B E N E F I T S C O S T ANAV E R AG E O F $ 1 8 7 AN N U AL LY

2016 Group Average Vision PlanContributions

% with Zero Contributions 21%

Average contributons(among those with non-zero contribution)

Employee Only $2Employee + Spouse $5Employee + Child(ren) $5Employee + Family $10

© MERCER 2016 16

M E D I C A L P L A N D E T A I L

Medical costs are madeup of three components:

Out of pocket employee (OOP) costs –Copays, Coinsurance, Deductibles fall

in this category

Employee contributions – Typicallydefined as a % of premium, these take

the form of paycheck contributions

Employer paid costs – The balance ofcosts paid by the employer either as %

of premium, or actual claims if self-funded

Gross Employee Cost sharingdoesn’t factor in the OOP costs an

employee will ultimately pay$1,861 / $10,987 = 17%

Allowed Employee Cost sharingis based on the total expense employees

pay, with both contributions and OOP costs$3,313 / $12,440 = 27%

$9,126

$1,861

$1,452

$12,440

Group Average

Annual Medical Plan Costs

© MERCER 2016 17

M E D I C A L P E R F O R M A N C E I N D E X ( M P x )W H A T I S I T ?

The MPx Score is a measure ofmedical plan performance, afternormalizing for demographics,

geography, and plan design

All scores are relative to the groupaverage among all participants.

Scores above 100% indicate that,after adjustments, costs are below

group average

The next two slides illustrate theadjustments being made, followed

by your specific MPx results(All costs considered are Medical Gross costs)

The adjusted medical costassumes each participanthad the same average planvalue, geographic footprint,and demographic profile.

The waterfall illustrates theeffect of each adjustment,moving from unadjusted toadjusted costs

The MPx is a comparison ofthe adjusted costs to thegroup average.

Cost differential betweencurrent MPx and average isshown in the chart, alongwith potential cost savingsassociated with a 1%improvement in MPx

Your Medical Performance Index (MPx) is: 110.0%(Higher is Better)

TODAYCompared to the SVEF average, you currently pay: 10.0% less in medical costs, based on efficiency

Which translates to: $1,372 per employee per year

Or, in Aggregate: $1.0M Based on 1,000 enrolled in medical plans

TOMORROWIf you improved index by 1% further, you save: $137 per employee per year

Or, in Aggregate: $100K Based on 1,000 enrolled in medical plans

*Sample Data

© MERCER 2016 18

C O S T A D J U S T M E N T SD E M O G R A P H I C S A N D G E O G R A P H Y

AGE37

M I N : 2 9 M AX : 4 6

FAMILY SIZE2.0

M I N : 1 . 4 M AX : 3 . 2

GEOGRAPHY

T O P 5 L O C AT I O N S

CA45%

WA12%

UT12%

TX4%

PA3%

Other24%

Geographical scores are calculatedbased on top 5 employee locations

by state, and adjusted to theaverage score

A 2% adjustment is appliedper year of difference from

the group average

A 60% adjustment isapplied per

additional memberfrom group average

© MERCER 2016 19

2016 Survey Average

Plan Type # Participants% Total

Enrollment Actuarial ValuePPO 32 58% 88.4%EPO 7 1% 92.4%HMO (Non-Kaiser) 12 4% 90.9%Kaiser HMO 21 8% 92.3%CDHP with HRA 3 7% 89.5%CDHP with HSA 23 22% 80.3%All Plan Types 35 100% 88.3%

2016 Survey Average

Plan Type # Participants% Total

Enrollment Actuarial ValuePPO 32 58% 88.4%EPO 7 1% 92.4%HMO (Non-Kaiser) 12 4% 90.9%Kaiser HMO 21 8% 92.3%CDHP with HRA 3 7% 89.5%CDHP with HSA 23 22% 80.3%All Plan Types 35 100% 88.3%

C O S T A D J U S T M E N T SP L A N D E S I G N

PLAN DESIGN

2 0 1 6 AV E R AG E P L ANVAL U E : 8 8 . 3 %

Medical costs are adjustedto group average planvalue using relative AV

Actuarial Value (AV)is the standard measure of plan “richness”.Actuarial Value is defined as the average

percent of medical allowed costs that the planpays for

© MERCER 2016 20

Un-AdjustedPEPYCost

$9,175Adjusted

PEPYCost

$8,922

+$63

+$363

-$167

-$513

$8,000

$8,200

$8,400

$8,600

$8,800

$9,000

$9,200

$9,400

Plan Design Geography Age Family Size

PEPY

Cost

Cost Adjustment - SAMPLE

M E D I C A L P E R F O R M A N C E I N D E X ( M P x )

Adjusted CostsThe projected total medical cost

assuming each participant had the sameaverage plan value, geographic

footprint, and demographic profile

Medical Performance Index (MPx)The comparison of each participant’s

adjusted cost to the overallgroup average of $10,987 PEPY

© MERCER 2016 21

Your Medical Performance Index (MPx) is: 104.9%(Higher is Better)

TODAYCompared to the group average, you currently pay: 4.9% less in medical costs, based on efficiency

Which translates to: $734 per employee per year

Or, in Aggregate: $1.0M Based on 1,000 enrolled in medical plans

TOMORROWIf you improved index by 1% further, you save: $151 per employee per year

Or, in Aggregate: $100K Based on 1,000 enrolled in medical plans

8/23/2016

M E D I C A L P E R F O R M A N C E I N D E X ( M P x )

• MPx scores above 100% indicate that afteradjusting for plan design, geography, anddemographics, costs are below groupaverage

• Cost differential between current MPx andaverage shown in chart, along withpotential cost savings associated with a1% improvement in MPx

Examples of how to improve MPx

Continue to build culture of wellness andconsumerism through program design and

plan offerings

Custom care management programs tomanage high cost claimant and chronic

condition incidence

Medical carrier marketing to improvediscounts and fixed fees

Re-structuring of dependent contributionsto avoid being a dependent magnet

SAMPLE

© MERCER 2016 22

C O M P A R I S O N T O M AT U R E H I G H - T E C HA G L I M P S E I N T O T H E F U T U R E

By comparing the demographics of survey respondents to mature high tech firms, we can take aglimpse at what the future might hold for emerging tech companies as they mature, and how

much it could cost.

S U R V E Y PAR T I C I PAN T S M AT U R EH I G H - T E C H

B E N C H M AR KEarly Stage / Pre-IPO Post-IPO

Average Annual (Gross)Medical Costs

Average Age

Average Family Size

36.4

1.8

40.8

2.4

$13,466

41.2

2.5

Adjusting the averagecost of $10,990 up tobenchmarkdemographics, thesurvey group isestimated to cost$13,156 – right in linewith benchmark

$10,471 $12,215

© MERCER 2016 23

A D D I T I O N A L A R E A S F O R C O N S I D E R AT I O N

C O R EB E N E F I T S

The majority of mature firms areself-funded which typically

yields a 5% -10% cost reductionin the long-term over a fully

insured arrangement.

If you are fully insured, makesure you are receiving credit for

the 2016 Health InsuranceProvider (HIP) fee moratorium

B E S T I NC LAS S &

TAR GE T E DP R O G R AM S

F O C U S O NFAM I LY

B E N E F I T S

Many mature firms offerprograms specific to certain

conditions to improveoutcomes and compete for

diverse talent.

Examples include expertmedical opinion and

LGBT specific benefits

As more spouses and childrenenter your benefit plans,

consider programs specific tofamilies

Examples include autismprograms, infertility benefits,

and childcare programs


APPENDIX

© MERCER 2016 25

C O S T B E N C H M A R K I N G R E S U L T S S U M M A R Y

Gross Cost: full premium orpremium equivalent rates,both employee andemployer paid

Allowed Cost: gross costs +the out of pocket costsincurred by an employee

Benchmarking Results Survey AverageMedical Performance Index (MPx) 100.0%

2016 PEPY Unadjusted Gross Cost $10,9872016 PEPY Adjusted Gross Cost $10,9872016 PEPY Medical Allowed Cost (includes OOP) $12,4402016 Employee Contribution % of Premiums 16.7%2016 Employee Cost Share as % of Medical Allowed Costs 26.1%2016 PEPY Employee Contributions $1,8612016 PEPY Employee Cost (Contribution + OOP) $3,3142016 PEPY Unadjusted Net Costs $9,126

2016 PEPY Dental Costs $1,0982016 Dental Cost Sharing 22.1%

2016 PEPY Vision Costs $1872016 Vision Cost Sharing 25.8%

Cost Adjustment Survey AveragePlan Design 88.3%Average Age* 37.4Member/EE Ratio* 1.99

© MERCER 2016 26

M E T H O D O L O G Y A N D A S S U M P T I O N S

• To the extent possible, data used as provided– Adjustments made if internal inconsistencies found– Data supplemented from additional sources if available

• Costs inclusive of claims and fixed fees associated with medical, prescription drug, and behavioral healthcoverages– For CDHPs, costs include value of employer HRA or HSA funding– Total cost by participant reflects weighted average by enrollment across all plan types offered– Allowed costs include member out-of-pocket spend estimated through Mercer’s plan valuation tool

• Total of 35 participants in cost benchmarking survey – averages for the group calculated on an un-weightedbasis

• Plan Design Factors– Based on in-network plan designs provided and valued using Mercer’s plan design valuation tool– Out-of-network design for PPO and CDHP plans assumed to be consistent across all participants

- Deductible and OOP maximum: 2x in-network amounts- Coinsurance: 20% lower than in-network amount

– 1.0 plan design factor set at overall average plan design across all participant’s plans– Relative factor reflects difference compared to overall average (e.g. 1.10 factor indicates plan design

that is 10% richer than overall average)

© MERCER 2016 27

M E T H O D O L O G Y A N D A S S U M P T I O N S ( C O N T ’ D )• Geographic Factors

– Based on Mercer study of relative cost across United States by 3-digit zip code, factors aggregated tostate-level based on U.S. census data

– Geographic factors by state assigned to each participant’s top 5 locations- For locations not covered within top 5 locations, assigned a 1.0 average geographic factor

– Northern California specific factor used of each participant’s California population– 1.0 average set at overall average geographic factor across all participant’s locations– Relative factor reflects difference compared to overall average (e.g. 1.10 factor indicates population in

locations that are 10% more costly than overall average)

• Demographic Factors – comprised of two components– Average age

- Each participant’s average age compared to overall average, cost factor of 2% for each yeardifference

– Average family size (member/employee ratio)- Each participant’s average family size compared to overall average, 60% cost factor applied to each

additional member– 1.0 average set at overall average member/employee ratio across all participants– Relative factor reflects difference compared to overall average (e.g. 1.10 family size factor indicates

population which covers 10% more dependents than overall average)

EMERGING TECH COMPANY BENEFITS SURVEY · survey info this is the first mercer emerging tech...

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Transcript of EMERGING TECH COMPANY BENEFITS SURVEY · survey info this is the first mercer emerging tech...