THE WILLIS BENEFITS BENCHMARKING SURVEYinfo.willis.com/site/HCPMedia/Documents/Human Capital...2015...

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SURVEY REPORT | 2015

THE WILLIS BENEFITSBENCHMARKING SURVEY

Mike BarsoumVice President, Strategic Placement OperationsNational Human Capital Practice

Carmen ZimmerBenchmarking and Survey ConsultantNational Human Capital Practice

TODAY’S AGENDA

1. About the survey

2. Medical plan eligibility, offerings and enrollment

3. Medical plan costs

4. Medical plan design details

5. Dental plans

6. Benefits strategy

7. Global benefits strategy

2015 Willis Benefits Benchmarking Survey | 1

2

ABOUT THE SURVEYSECTION ONE


METHODOLOGY

• Inaugural survey

• Conducted in March 2015

• 532 employer respondents

• 1,193 medical plans

• Administered online

3

SUMMARY OF RESPONDENTS

PARTICIPANTS BY REGION



PARTICIPANTS BY EMPLOYER SIZE


27%

23%

18%

25%

7%

0% 5% 10% 15% 20% 25% 30%

Under 250 employees

250–499 employees

500–999 employees

1,000–4,999 employees

5,000+ employees

Sm

all

Lar

ge

Percentage of Employers

4


PARTICIPANTS BY INDUSTRY


2%

2%

2%

3%

3%

3%

3%

4%

4%

5%

6%

7%

8%

9%

9%

11%

20%

0% 5% 10% 15% 20% 25%

Other

Media/Entertainment/Telecom

Hospitality/Food Service

Other Professional Services

Legal Services

Government

Oil/Gas/Mining/Energy

Automotive/Aerospace/Transportation

Business Services/Consulting

Construction

Education

Technology (computers, software, ISP, etc.)

Financial Services

Retail/Wholesale

Nonprofit

Health Services/Hospitals

Manufacturing

Percentage of Employers

SUMMARY OF RESPONDENTSAVERAGE EMPLOYEE AGE BY REGION


EMPLOYEE POPULATION BY GENDER

PERCENTAGE OF EMPLOYERS WITH UNION REPRESENTATIONEMPLOYERS WITH PART-TIME EMPLOYEES

5

MEDICAL PLAN ELIGIBILITY, OFFERINGS AND ENROLLMENT

SECTION TWO


MEDICAL PLAN WAITING PERIODS BY INDUSTRY

41%

14%

57%

25%

71%

54% 56%

27%

8%

71%

30%36%

56%43%

36%

13%

91%

28%

29%

30%

17%

13%

27%

39%

36%

31%

12%

28%

36%

17%32% 43%

41%

9%

22%

43%

9%

46%

10% 17%

6%

29%

54%

6%

32%

18% 17% 15%14%

20%

9% 14%4%

13%6%

2%

9% 8% 12% 10% 9% 11% 11% 7%

26%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Date of hire or 1st of the month following date of hire 30 days or 1st of the month following 30 days of employment

60 days or 1st of the month following 60 days of employment 90 days or more

6


ENROLLMENT

Waived22%

Individual53%

Dependent47%

Enrolled78%

ENROLLMENT AND DEPENDENT ELECTION

DEPENDENT COVERAGE

93%

66%

46%39%

3%0%

20%

40%

60%

80%

100%

All Employers

Opposite sex spouse

Same sex spouse

Same sex domestic partner

Opposite sex domestic partner

N/A: Spouses/domestic partners arenot eligible for any medical benefits

ELIGIBLE DEPENDENT CLASSIFICATIONS


More Legal and Technology employers offer coverage to same-sex spouses and domestic partners (both same-and opposite-sex) than in any other industry

94% 97%88%

80%82%71%71% 71%

0% 3%0%

20%

40%

60%

80%

100%

Legal Services Technology

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SPOUSAL SURCHARGES

46%

67%

45%

27%

73%

50%

33%

48%

73%

18%

All Employers Northeast South Midwest West0%

10%

20%

30%

40%

50%

60%

70%

80%

SPOUSAL SURCHARGE APPLICATION

A surcharge is apllied for all spouses

A surcharge is applied only to those spouses who have access to medical coverage elsewhere

Only 15% of employers impose a surcharge for spouses covered under the medical plan

88% of employers who impose a spousal surcharge do not require verification of the spouses access to other medical coverage


SPOUSAL SURCHARGES

Median Monthly Spousal Surcharge Amount

All Employers $147.00

Northeast $147.00

South $150.00

Midwest $127.50

West $150.00

Under 250 employees $228.00

250–499 employees $103.00

500–999 employees $150.00

1,000–4,999 employees $138.00

5,000+ employees $100.00

8

MEDICAL PLAN OFFERINGS AND ENROLLMENT

TYPES OF MEDICAL PLANS OFFERED AND AVERAGE ENROLLMENT PER PLAN TYPE WHEN OFFERED


While only 12% of employers offer HRA plans, those that do report 48% of total medical enrollees are selecting those plans87%

22%

47%

12%

2% 2%

67%

46%

33%

48%

12%16%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

PPO/POS HMO/EPO HSA HRA Indemnity Plan Limited MedicalPlan

% of Employers Offering % of Total Enrolled When Offered

MEDICAL PLAN OFFERINGS

87%

22%

47%

12%

88%

34%

43%

16%

88%

19%

42%

13%

86%

8%

60%

8%

82%

51%

40%

13%

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

PPO/POS

HMO/EPO

HSA

HRA

All Employers Northeast South Midwest West

TYPE OF MEDICAL PLANS OFFERED BY REGION


Indemnity and Limited Medical Plans are only offered by 2% of employers on average.

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HMO/EPO PLANS


Only 19% of employers in the South offer HMO/EPO plans, but when they do 51% of employees enrolling in medical benefits are selecting those plans

34%

19%

8%

51%

43%

51%

19%

44%

0%

10%

20%

30%

40%

50%

60%

Northeast South Midwest West



HSA PLANS


Although HSA plans are offered by employers in the Midwest more than in any other region, only 32% of enrollees in the Midwest are selecting those plans

43% 42%

60%

40%40%

33% 32%

21%

0%

10%

20%

30%

40%

50%

60%

70%



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MEDICAL PLAN OFFERINGS

25%

33%

30%

25%

18%

11%

36%

36%

40%

39%

35%

24%

24%

21%

23%

25%

27%

32%

7%

6%

3%

8%

10%

13%

3%

3%

2%

2%

5%

3%

4%

1%

2%

2%

6%

18%

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

All Employers

Under 250

250–499

500–999

1,000–4,999

5,000+

1 2 3 4 5 More than 5 plans

NUMBER OF MEDICAL PLANS OFFERED BY EMPLOYER SIZE


Only 5,000+ employer size groups typically offer more than five medical plans

FUNDING METHOD BY EMPLOYER SIZE

48%

76%

58%

34%28%

3%

47%

17%

38%

57% 69%

92%

3% 5% 2%4%

2%3%

2% 2% 2% 4% 1% 3%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

All Employers Under 250 250–499 500–999 1,000–4,999 5,000+

Fully insured Self insured Minimum premium arrangement Other


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BY INDUSTRY


AVERAGE TOTAL MEDICAL AND RX COSTS AS % OF PAYROLL

18% 18% 18%

25%

17%19%

16%

14%

0%

5%

10%

15%

20%

25%

30%

AllEmployers

Education FinancialServices

HealthServices/Hospitals

Manufacturing Nonprofit Retail/Wholesale

Technology

MEDICAL PLAN COSTSSECTION THREE

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EMPLOYEE CONTRIBUTION DIFFERENTIATION

11%

21%

10%9%

4%4%

9%

3% 3% 3%

9%11%

9%

11%

4%

17%

13%

19%

22%

7%

19%17%

16%

29%

4%

0%

5%

10%

15%

20%

25%

30%

All Employers Northeast South Midwest West

Salary/wage levels Job title Full time/part time status Tobacco and non-tobacco status Wellness incentive(s) completion


BY REGION

Note: Salary/Hourly status (1%), Years of Service (1%) and Union/Non-Union (2%) are not shown

53% of employers in the Legal Services industry differentiate contributions by salary/wage levels, more than in any other industry

PREMIUMS AND CONTRIBUTIONSPPO/POS HMO/EPO HSA HRA

Average Monthly Premium

Individual $543 $537 $464 $511

Family $1,592 $1,565 $1,323 $1,453

Average Monthly Employee Contribution

Individual $135 $118 $88 $106

Family $530 $492 $351 $416

Contribution as a % of Premium

Individual 25% 22% 19% 21%

Family 33% 31% 27% 29%


$543

$1,592

$537

$1,565

$464

$1,323

$511

$1,453

$135

$530

$118

$492

$88

$351

$106

$416

$0

$400

$800

$1,200

$1,600

Individual Family Individual Family Individual Family Individual Family

PPO/POS HMO/EPO HSA HRA

Average Monthly Premium Average Monthly Employee Contribution

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PREMIUMS AND CONTRIBUTIONS BY REGION


$635

$1,874

$569

$1,680

$545

$1,514

$550

$1,685

$503

$1,461

$528

$1,483

$431

$1,222

$500

$1,399

$517

$1,524

$501

$1,417

$447

$1,291

$510

$1,417

$583

$1,720

$531

$1,581

$479

$1,394

$0

$500

$1,000

$1,500

$2,000



PREMIUMS


$153

$575

$156

$536

$93

$378

$104

$420

$129

$549

$122

$511

$82

$345

$114

$431

$123

$433

$104

$303

$90

$323

$110

$359

$157

$641

$92

$489

$97

$414

$0

$100

$200

$300

$400

$500

$600

$700



EMPLOYEE CONTRIBUTIONS

Note: HRA premiums/contributions for the West are not shown due to insufficient data

EMPLOYEE CONTRIBUTIONS AS A PERCENT OF PREMIUMS


31% 32%

25% 25%

38%

34%

28%

31%

28%

21%

25% 25%

37%

31% 30%

24%

27%

17%19%

26%

23%

19%

23%24%

21% 20%22%

27%

17%

20%

0%

5%

10%

15%

20%

25%

30%

35%

40%

PPO/POS

HMO/EPO

HSA HRA PPO/POS

HMO/EPO

HSA HRA PPO/POS

HMO/EPO

HSA HRA PPO/POS

HMO/EPO

HSA


Family Individual

The Midwest has the lowest differential between individual employee contribution percentages and family contribution percentages

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MEDICAL PLAN DESIGN DETAILS

SECTION FOUR

DEDUCTIBLES


Individual in-network deductible $750 $750 $2,100 $1,500

Family in-network deductible $2,000 $2,000 $4,500 $3,600

Individual out-of-network deductible $1,500 $4,000 $3,375

Family out-of-network deductible $4,000 $8,000 $6,750


$750

$2,000

$750

$2,000 $2,100

$4,500

$1,500

$3,600

$1,500

$4,000 $4,000

$8,000

$3,375

$6,750

$0

$2,000

$4,000

$6,000

$8,000

$10,000



Median Deductible: In-Network Median Deductible: Out-of-Network

Larger employers typically have lower deductibles, regardless of plan type

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IN-NETWORK DEDUCTIBLES BY REGION


$1,500

$2,500 $2,600

$1,750

$3,000

$5,000 $5,200

$3,650

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000


PPO/POSMedian Individual Deductible Median Family Deductible

$1,000

$500 $500$625

$2,000

$1,000 $1,000

$1,750

$0

$500

$1,000

$1,500

$2,000

$2,500


HMO/EPO

$1,500

$2,500 $2,600

$1,750

$3,000

$5,000 $5,200

$3,650

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000


HSA

Only 42% of HMO/EPO plans require deductibles

$1,500$2,000 $2,000

$3,000

$4,000 $4,000

$0

$1,000

$2,000

$3,000

$4,000

$5,000

Northeast South Midwest

HRA

Note: HRA deductibles for the West are not shown due to insufficient data

OUT-OF-POCKET MAXIMUMS


Individual in-network out-of-pocket maximum $3,000 $2,000 $3,900 $3,975

Family in-network out-of-pocket maximum $6,000 $4,000 $8,000 $7,950

Individual out-of-network out-of-pocket maximum $6,000 $8,000 $7,125

Family out-of-network out-of-pocket maximum $12,000 $16,000 $14,750


$3,000

$6,000

$2,000

$4,000 $3,900

$8,000

$3,975

$7,950

$6,000

$12,000

$8,000

$16,000

$7,125

$14,750

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

$18,000



Median Out-of-Pocket Maximum: In-Network Median Out-of-Pocket Maximum: Out-of-Network

Out-of-pocket maximums are similar among large and small employers

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IN-NETWORK OUT-OF-POCKET MAXIMUMS BY REGION


$2,600

$3,500$3,000

$2,500

$5,550

$7,750

$6,000 $6,000

$0

$2,000

$4,000

$6,000

$8,000


PPO/POSMedian Individual Out-of-Pocket Maximum Median Family Out-of-Pocket Maximum

$3,000 $3,000

$1,500 $1,500

$6,000 $6,000

$3,000 $3,000

$0

$2,000

$4,000

$6,000


HMO/EPO

$3,500$4,000 $4,000

$3,000

$7,000

$8,000 $8,000

$6,000

$0

$2,000

$4,000

$6,000

$8,000


HSA

$3,250$4,000 $4,000

$7,000

$8,000 $8,000

$0

$2,000

$4,000

$6,000

$8,000

Northeast South Midwest

HRA

Note: HRA OOP Maximums for the West are not shown due to insufficient data

PLAN DESIGN DETAILSPPO/POS HMO/EPO HSA HRA

Plan Coinsurance

In-network 80% 100% 90% 80%

Out-of-network 60% 60% 60%

Office Visit Coverage

Physician office visit copay $25 $20

Specialist office visit copay $40 $30

Inpatient Hospitalization Coverage

Median in-network coinsurance* 80% 80% 90% 80%

Median in-network copay* $250 $250

Outpatient Surgery



Emergency Room Coverage


Median in-network copay* $150 $100 $125

Urgent Care Coverage




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OFFICE VISIT COVERAGE BY PLAN DESIGN

80%

95%

4%

19%

19%

3%

93%

81%

1%

2%

2%

0%

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

PPO/POS

HMO/EPO

HSA

HRA

Copay required Coinsurance and deductibles apply Office visits are covered by the plan


$25

$20

$25 $25$25

$20$20 $20

$0

$10

$20

$30

PPO/POS HMO/EPO

OFFICE VISIT COPAYS



COPAYS BY REGION

$30

$40$40$35$35

$25$25$20

$0

$10

$20

$30

$40

$50

PPO/POS HMO/EPO

SPECIALIST VISIT COPAYS


Office visit copays are fairly consistent across all regions while copays for specialist visits vary widely by region

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INPATIENT HOSPITALIZATION: IN-NETWORK

72%

26%

90%

92%

11%

10%

2%

3%

11%

50%

2%

1%

4%

14%

5%

4%

1%

1%

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

PPO/POS

HMO/EPO

HSA

HRA

Coinsurance applies

The plan charges a dollar amount per stay and coinsurance applies

The plan charges a dollar amount per stay

There is no employee cost-sharing for this coverage

Not Covered


OUTPATIENT SURGERY/HOSPITAL SERVICES: IN-NETWORK

75%

31%

90%

92%

7%

7%

3%

3%

11%

47%

2%

1%

6%

15%

4%

4%

1%

1%

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

PPO/POS

HMO/EPO

HSA

HRA

Coinsurance applies

The plan charges a dollar amount per visit and coinsurance applies

The plan charges a dollar amount per visit


Not Covered


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EMERGENCY ROOM SERVICES: IN-NETWORK

54%

78%

6%

18%

40%

2%

84%

72%

4%

18%

5%

6%

1%

3%

4%

4%

1%

1%

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

PPO/POS

HMO/EPO

HSA

HRA


Coinsurance applies at the same level as the overall plan coinsurance

Coinsurance applies at a different level than the overall plan coinsurance


Not Covered


URGENT CARE SERVICES: IN-NETWORK

60%

86%

2%

13%

34%

9%

90%

82%

4%

1%

2%

3%

2%

3%

4%

3%

1%

1%

1%

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

PPO/POS

HMO/EPO

HSA

HRA





Not Covered


20

URGENT CARE SERVICES: OUT-OF-NETWORK

22%

1%

6%

60%

85%

83%

13%

9%

8%

1%

2%

4%

3%

3%

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

PPO/POS

HSA

HRA





Not Covered


PRESCRIPTION DRUG COVERAGE

7%

24%

14%

6%

70%

63%

63%

61%

21%

11%

22%

30%

2%

2%

1%

3%

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

PPO/POS

HMO/EPO

HSA

HRA

Two tier (Generic/Brand)

Three tier (Generic/Preferred Brand/Non-Preferred Brand)

Four tier (Generic/Preferred Brand/Non-Preferred Brand/Specialty )

Five tier (Generic/Non-Preferred Generic/Preferred Brand, Non-Preferred Brand/Specialty)

PRESCRIPTION DRUG PLAN – TIER STRUCTURE


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82%

93%

43%

73%

8%

4%

46%

13%

4%

2%

5%

5%

3%

1%

2%

2%

4%

2%

5%

7%

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

PPO/POS

HMO/EPO

HSA

HRA

Copays required

Coinsurance required

Combination of coinsurance and copays required

Minimum and maximum copays required

Combination of coinsurance and min/max copays required





Median generic copay $10/$20 $10/$20 $10/$24 $10/$20

Median preferred brand copay $30/$60 $30/$80 $30/$60 $30/$61

Median non-preferred brand copay $50/$120 $50/$100 $50/$110 $58/$119


$10 $10 $10 $10

$30 $30 $30 $30

$50 $50 $50$58

$20 $20 $24 $20

$60

$80

$60 $61

$120

$100$110

$119

$0

$20

$40

$60

$80

$100

$120

$140

PPO/POS HMO/EPO HSA HRA PPO/POS HMO/EPO HSA HRA PPO/POS HMO/EPO HSA HRA

Generic Preferred Brand Non-preferred Brand

Retail Mail Order

22

67%60% 59%

73%82%

68%58%

64%71%

82%

0%

20%

40%

60%

80%

100%

All employers Northeast South Midwest West

Employer establishes HealthSavings Account on behalf ofthe employee

Employer makes contributionto Health Savings Account

HSA ESTABLISHMENT BY REGION


HEALTH SAVINGS ACCOUNTS

50%

81%

58% 58%

71%

83%

58%68% 68%

73%67% 63%

0%

20%

40%

60%

80%

100%

1 - 99 100 - 249 250 - 499 500 - 999 1,000 - 4,999 5,000+

HSA ESTABLISHMENT BY EMPLOYER SIZE

HEALTH REIMBURSEMENT ACCOUNTS

HRA EMPLOYER CONTRIBUTION


$500

$750

$500

$1,100

$1,250

$1,100

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

All Employers Under 500 employees 500 + employees

Median HRA Fund Employer Contribution - Individual Median HRA Fund Employer Contribution - Family

23

DENTALSECTION FIVE

BY EMPLOYER SIZE


NUMBER OF DENTAL PLANS OFFERED

63%

76%

67% 66%

51%

38%

32%

21%

29% 30%

45%43%

3% 2% 2%5% 3%

11%

0%

10%

20%

30%

40%

50%

60%

70%

80%

All Employers Under 250 250–499 500–999 1,000–4,999 5,000+

1 plan 2 plans 3 plans

90% of employers who offer group dental coverage report that their most prevalent plan is a Dental PPO

24

DENTAL PREMIUMS AND CONTRIBUTIONS


DENTAL PLANS

Smaller employers have higher premiums and contributions than larger employers

PLAN DESIGN


DENTAL PLAN DESIGN

Median Amounts – All Employers In-network Out-of-network

Preventive services – coinsurance 100% 100%

Basic restorative services – coinsurance 80% 80%

Major restorative services – coinsurance 50% 50%

Annual median maximum benefit $1,500

Orthodontia annual maximum benefit $1,500

19%

98% 97%

0%

20%

40%

60%

80%

100%

120%

Preventiveservices

Basic restorativeservices

Major restorativeservices

DEDUCTIBLES APPLY TO:

28%

52%

20%

0%

10%

20%

30%

40%

50%

60%

Yes, for bothchildren and adults

Yes, for childrenonly

No

ORTHODONTIC COVERAGE

25

BENEFITS STRATEGYSECTION SIX

Mark S. VoelpelSenior Employee Benefits AttorneyNational Legal & Research Group

BENEFITS STRATEGY

CURRENT AND FUTURE PLANS


26

ORGANIZATIONS THAT HAVE PROJECTED THE POTENTIAL LIABILITY OF THE EXCISE TAX


BENEFITS STRATEGY

41%

29%

39%

51%

45%

57%

0%

10%

20%

30%

40%

50%

60%

Under 250 250–499 500–999 1,000–4,999 5,000+

AllEmployers Number of Employees

BENEFITS STRATEGY

60%

68%

74%77%

83%

100%

50%

60%

70%

80%

90%

100%

2020 2021 2022 2023 2024 2025 or later

ASSUMING NO PLAN DESIGN CHANGES, PERCENTAGE OF EMPLOYERS PROJECTED TO BE IMPACTED BY CADILLAC TAX


Late in 2015 as part of the Omnibus Budget bill, Congress and the President agreed to delay the effective date of the Cadillac excise tax until 2020 (from the original 2018 effective date). That was the only change made so presumably the levels of the tax would stay the same ($10,200 for individual coverage and $27,500 for individual plus one or more coverage) until 2018 and then increase at the CPI plus 1% for 2018 and CPI thereafter. So, the thresholds would remain the same when the effective date arrives (if indeed it does – the political forces may provide full repeal after the 2016 elections). However, the impact the first year will be much greater for those employers that were already on a path to be affected in 2018 and 2019.

27

BENEFITS STRATEGY


BENEFITS STRATEGY


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BENEFITS STRATEGY


BENEFITS STRATEGY


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GLOBAL BENEFITS STRATEGYSECTION SEVEN

Dana M. LeeSenior Vice PresidentGlobal Client Development

GLOBAL BENEFITS STRATEGY


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THE WILLIS BENEFITS BENCHMARKING SURVEYinfo.willis.com/site/HCPMedia/Documents/Human Capital...2015...

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