U.S. workers can expect to see major changes in their employer-sponsored health benefits coverage during the upcoming open enrollment season, according to benefits consultants at Watson Wyatt Worldwide.
"Faced with rising health costs, employers are making several changes to their benefit programs that employees should anticipate seeing in their enrollment packages," said Tom Billet, a senior benefits consultant with Watson Wyatt. "And, with workers assuming more responsibility for making health care decisions, they'll need to carefully evaluate their options."
Here are seven major trends that benefits experts at Watson Wyatt, which consults with large employers on their health care benefit and open enrollment programs, have identified for this year's season.
- New plan designs, but fewer options. Many employers are adding consumer-driven health plans to their offerings this season, as options rather than replacements for traditional plans. Consumer-driven health plans, which combine high deductibles with personal health accounts, have lower premiums but emphasize greater individual accountability for one's health care. Employers are also reducing the number of HMOs they offer workers, while employees who opt for preferred provider organizations (PPOs) may see smaller networks with fewer choices of doctors. Some employees, especially those in smaller companies, may have an opportunity to participate in a health savings account (HSA). HSAs, which allow workers to set aside funds in pretax dollars for out-of-pocket medical expenses, were created as part of the Medicare law enacted in December 2003.
- Increased focus on disease management. Most large employers now offer disease management programs to help workers better manage chronic illnesses such as diabetes and heart disease. To encourage workers to participate in a disease management program, some employers may offer cash incentives or a discount on premiums.
- Higher costs for doctor, hospital visits. Some employees will see increases in co-payments to visit a doctor or hospital and higher deductibles for inpatient hospital care. Costs for prescription drugs are also increasing this year, with some employers raising co-payments for generic, brand and formulary drugs.
- Surcharge for spousal coverage. One way employers are attempting to contain costs is to limit the number of participants in their plans, especially for married workers. A growing number of companies this fall will impose a surcharge on employees who opt to include their spouse in the benefit program if the spouse has coverage elsewhere.
- More voluntary benefits. Employers are often able to offer ancillary benefits to workers at a much lower rate than employees would have to pay if they were to purchase the benefits themselves. At a time when some companies are scaling back benefits, the good news is that more employers are making voluntary benefits available to workers for purchase during enrollment season. Employees may be offered homeowners, automobile and life insurance; low-rate mortgages and fitness club memberships.
- Greater access to decision-support tools. Most employers are now using self-service, web-based tools that give workers greater control at each stage of health care decision-making, from plan selection to treatment. At their computer keyboards, employees can compare the costs of health plans, determine how much to contribute to a flexible spending account, check the status of claims, find information on medical specialists, create personal health records to keep track of their medications, and visit web sites for information on specific diseases and wellness topics. Tools are available in several languages to serve increasingly multilingual workforces.
- Enhanced employer communication. Employees are receiving more information to help them navigate the overall health care system and understand the new health plan designs. They are also receiving guidance on how to develop personal criteria for making critical health care decisions, including choices about their lifestyle and behavior that could have a significant impact on their short- and long-term health.
"The decisions employees and their families make during open enrollment season have clearly become much more complex," says Billet. "The good news is that employers are communicating more effectively with workers about open enrollment. Employers are also making it easier for employees to evaluate all of the information, so that they can make the best decisions for themselves and their families."