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Survey: Most Michigan Employers Will Continue Health Coverage After 2014

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Only 7% of southeast Michigan-based employers are likely to discontinue offering coverage due to health reform in 2014, according to a new survey.

McGraw Wentworth, an employee group benefit brokerage/consulting firm based in Troy, Mich., published this finding in a summary of results from an annual survey of mid-sized employers. The survey tracks health benefits and cost trends for the current year, including decision-making around health reform, among 470 southeast Michigan-based organizations with 100-10,000 employees.

Among the survey’s findings:

–Employer health care costs after plan changes increased by an average of 8% this past year, according to a new report.

–High-performing organizations with the lowest average annual increases over two years – are aggressively focused on Consumer Driven Health Plans (CDHP) and wellness and less on cost-shifting. Their health benefit plan cost increases averaged 4% or lower over two years after plan design changes.

–Significantly fewer Michigan employers offer “free” coverage. Only 10% (down from 15% in 2010) offer family coverage at no cost.

–CDHPs are increasingly prevalent. A CDHP typically combines a high deductible plan with lower monthly contributions; employees assume greater financial and health care purchasing responsibility. In 2011, 27% of employers — compared to 19% in 2009 — offer CDHPs, with more employers, 5%, offering a CDHP as the only plan option.

–Preferred Provider Organizations (PPOs) continue to dominate enrollment. HMOs remain a good cost competitive option due to innovative, wellness-centered plan designs.

–Employers attribute one to three percent of this year’s average 8% increase in health benefit costs to health care reform mandates, e.g., extending coverage for dependents to age 26.

–Only 7% of mid-size employers anticipate discontinuing their health plans due to availability of insurance exchanges in 2014. 49% plan to offer health coverage despite availability, similar costs of the exchanges.

“Organizations that manage cost increases to the lowest levels are putting decision-making regarding personal health and health care purchasing in the hands of the consumer,” says Rebecca McLaughlan, managing director, McGraw Wentworth. “Employers can hold health care benefit costs in check by engaging employees. A leading consumer strategy is three-tier prescription drug co-pay program, where employees choose from either a generic, formulary brand or non-formulary brand drug.”

–Warren S. Hersch


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