PwC's 2013 Health and Well-being Touchstone Survey results

www.pwc.com/us/hrs

Health and Well-being Touchstone Survey resultsJune 2013

Launch

http://www.pwc.com/us/hrs

Overview Section 1: Key trends 3

Section 2: Summary of findings 5

Detailed findings Section 3: Medical plan costs 13

Section 4: Medical plan design highlights 17

Section 5: Wellness and Disease Management 37

Section 6: Welfare benefits 44

Section 7: Retiree medical 48

Section 8: Retirement plans 53

Section 9: Health reform—Affordable Care Act (ACA) 59

Section 10: Future solutions 63

Appendix Section 11: Summary of survey participants 65

Contact PwC contacts 68

Table of contents

Overview

S1: Key trends

S2: Summary of findings

Detailed findings

Appendix

Contact

Click the topics below to view findings

This document is for general information purposes only, and should not be used as a substitute for consultation with professional advisors. Health and Well-being Touchstone Survey results | PwC 3

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Overview—Section 1: Key trends

Overview

S1: Key trends


Detailed findings

Appendix

Contact



2013 Health and Well-being Touchstone Survey highlights

Section 1: Key trendsClick to return to the table of contents

7.5%

5.3%

7.8%

5.4%

The average reported trend in healthcare costs before plan changes in 2012 was 7.5% and is projected to increase to 7.8% in 2013. These have been managed down through plan design changes to 5.3% and 5.4%, respectively.

These increases are being shared with employees through increases in contributions and cost sharing through plan designs (higher deductibles and out-of-pocket maximums)

Preferred provider organization (PPO) plans are still the most prevalent plan designs for 54% of employers (down 3 percentage points from 2012 while High deductible plans are now the most prevalent plan designs for 21% of employers (up 4 percentage points from 2012). Exclusive provider organization (EPO) plans are growing slightly from 2012, while Health maintenance organization (HMO) plans are declining, and Point of service (POS) plans are remaining constant.

Overall, employers are offering fewer medical plan options– 2.6 plans offered on average in 2013 versus 3.0 plans in 2012.

31% employers with <500 employees self-insured

55% employers with 500–1,000 employees self-insured

Employers are self-insuring medical benefits more now than before. While prevalent in employers with 1,000+ employees, 31% of employers with <500 employees are now self-insured (up from 22% in 2012) as are 55% of employers with 500–1,000 employees (up from 49% in 2012). This could be a reaction to the Affordable Care Act (ACA).

The prevalence of Wellness programs has decreased for mid-size employers (1,000-5,000 employees). The prevalence of Disease Management programs has decreased for both mid-size and large employers (5,000+ employees).

The immediate future looks to be a continuation of current strategies:

• Cost sharing through plan design and contributions will continue to increase

• Full replacement High deductible plans are being considered by 44% of employers, while 17% have already implemented them

• 53% of employers are considering implementing/improving wellness in the US and 16% are considering implementing/improving wellness outside of the US

• 33% of employers are considering performance-based networks and 43% are considering value-based plan designs

• Only 19% are considering direct contracting with providers




Overview—Section 2: Summary of findings

Overview

S1: Key trends


Detailed findings

Appendix

Contact



Click to return to the table of contents 2013 Health and Well-being Touchstone Survey summary

Section 2: Summary of findings

Overview

S1: Key trends


Detailed findings

Appendix

Contact

Background

• The survey was completed in the first quarter of 2013

• The survey data contains detailed benefits information provided by approximately 1,100 participating employers in 35 different industries across the nation

• There was a larger percentage of smaller and mid-size employer participating in 2013 as compared to 2012

• The 2013 survey provides summary data on medical and prescription drug plan design, costs, COBRA rates, Wellness and Disease Management programs, work-life programs, fringe benefits, future healthcare strategies, retirement benefits, and health reform

• Customized reports are available upon request based on industry, size, and/or geographic location

Medical costs continue to increase faster than inflation

• The average reported increase in medical plan costs before plan changes was 7.5% for 2012 over 2011

– The average reported annual increase after plan changes was 5.3% for 2012 and 5.4% expected for 2013

• The average employee-only monthly COBRA rate increased by 5.6% from $498 in 2012 to $526 in 2013

– A smaller percentage of employers are utilizing 4-tier and 5-tier rate structures (63% in 2012 decreased to 55% in 2013)

Employee-only coverage contribution

<1,000 employees

(Smaller employers)

1,000–5,000 employees (Mid-size

employers)

5,000+ employees

(Large employers)

<10% 22% 11% 8%

10%–14% 15% 12% 12%

15%–19% 12% 16% 17%

20%–24% 18% 30% 30%

25%–29% 12% 14% 16%

30%–39% 12% 13% 11%

40%+ 9% 4% 6%

Average 21% 22% 23%

Employee contributions as a percent of premium increased in 2013

19%of employees contribute 30% or more for employee-only coverage(up from 12% in 2009)

34%of employees contribute 30% or more for family coverage(up from 25% in 2009)

while




Medical plan features


Overview

S1: Key trends


Detailed findings

Appendix

Contact

74%of employers offer

two or more medical plans

54%of employers have the

largest enrollment in PPO plans

74% of employers offer two or more medical plan options

PPO plans capture the largest enrollment for 54% of responding employers, with an average enrollment of 76%

In-network features Out-of-network features

32%have a deductible of $1,000 or more (up from 11% in 2009)The Services and Financial Services industries had the highest deductible

Coinsurancehas increased since 2009, but has leveled out during the past 3 years

44%have a copay between $20–$29

for primary care office visits and 20% use coinsurance instead

49%have out-of-pocket maximums greater than $3,000 (up from 33% in 2009) and 13% have unlimited out-of-pocket maximums

46%use coinsurance

instead of copays for hospital admissions

75%use copays for the emergency room, down from 83% in 2009

47%have a copay over $30 for specialist office visits and 23% use coinsurance instead

54%have coinsurance of 20% or more for most services Coinsurance tends to be higher for the Retail & Consumer and Services Industries




Medical plan features


Overview

S1: Key trends


Detailed findings

Appendix

Contact

74%of employers offer

two or more medical plans

54%of employers have the

largest enrollment in PPO plans

74% of employers offer two or more medical plan options

PPO plans capture the largest enrollment for 54% of responding employers, with an average enrollment of 76%

In-network features Out-of-network features

55%have a deductible of $1,000 or more (up from 20% in 2009)

53%have out-of-pocket maximums of $5,000 or greater (up from 23% in 2009) and 10% have unlimited out-of-pocket maximums

63%have coinsurance of 30% or more




Overview

S1: Key trends


Detailed findings

Appendix

Contact

2013 Health and Well-being Touchstone Survey summary


85% use copays / 14% have coinsurance

Retail generics



Retail brand formulary

Retail brand non-formulary

(vs. 82% / 16% in 2012)

(vs. 72% / 26% in 2012)

(vs. 68% / 28% in 2012)

74%indicated that a deductible was not applicableThe majority of employers’ plans do not have a separate prescription drug deductible

The most common copays for retail prescription drug benefits are

$10/$30/$5059% have the same copay for specialty drugs as retail brand

Copays remained the most common cost sharing method (fewer use coinsurance)

Prescription drug benefits

% offering HSA HRA

2013 2012 2013 2012

<1,000 employees 35% 28% 18% 12%

1,000–5,000 employees 40% 42% 20% 14%

5,000+ employees 46% 52% 25% 26%

Year total 39% 40% 20% 17%

High Deductible Health Plans (HDHPs)

• 39% offer an HDHP with Health savings account (HSA), 20% offer an HDHP with Health reimbursement account (HRA), and 3% offer HDHP without HSA or HRA

• For those that offer an HDHP with an HSA: – Reported average enrollment increased from

20.5% in 2010 to 34.6% in 2013

– 30% of employers do not fund the HSA while 53% fund up to $1,000 a year; 17% fund over $1,000 a year

• For those that offer an HDHP with an HRA: – Reported average enrollment has steadily

increased from 34.2% in 2010 to 54.2% in 2013

– 2% of employers do not fund the HRA while 62% of employers establish an allowance of up to $1,000 a year and 36% have an allowance over $1,000 a year





Overview

S1: Key trends


Detailed findings

Appendix

Contact

Wellness and Disease Management

• 68% offer Wellness programs (85% of large employers offer Wellness programs, same as in 2012)

– Most common Wellness program was EAP (86%), followed by health risk questionnaire (80%), tobacco cessation (61%), body mass index (58%), and weight management (52%)

– Health risk questionnaire had the largest participation rate of 52% followed by body mass index with 49%

• 49% offer Disease Management programs (75% of large employers offer Disease Management programs, down from 81% in 2012)

– Most common programs were diabetes (70%), asthma (59%), cardiac (57%), and chronic obstructive pulmonary disease (54%)

– Cancer and diabetes had the largest participation rate of 11%

• 9 out of 10 employers do not have sufficient data to calculate or do not measure a return on investment for either Wellness or Disease Management programs

• Smaller employers overall offer fewer Wellness and Disease Management programs as compared to large employers

68%offer Wellness programs

49%offer Disease Management programs

Self-insurance and stop loss

• Self-insurance is most prevalent for large employers, however, it is becoming more popular with smaller employers

– 55% of employers with 500–1,000 employees are self-insured, up from 49% in 2012

– 31% of employers with <500 employees are self-insured, up from 22% in 2012

• 54% of those self-insured employers do not have aggregate stop loss coverage while only 21% do not have specific stop loss

– The prevalence and level of specific/individual stop loss coverage varies significantly depending on the size of the employer

– Employers with 5,000 or more employees are less likely to have stop loss coverage

Specific/individual coverage

<1,000 employees

1,000–5,000 employees

5,000+ employees

<$50,000 5% 0% 0%

$50,000–$99,999 36% 4% 0%

$100,000–$199,999 38% 30% 6%

$200,000–$299,999 9% 30% 12%

$300,000–$499,999 2% 18% 18%

$500,000–$999,999 1% 7% 13%

$1,000,000+ 3% 2% 6%

N/A 6% 9% 45%

The prevalence of self-insurance is increasing in the under 1,000 employee segment




Overview

S1: Key trends


Detailed findings

Appendix

Contact



Retiree medical programs

• 36% of employers provide Pre-65 retiree medical programs, while 31% provide Post-65, down from 2012 (48% and 42% respectively)

• Of those who provide retiree medical plans, new hires are often excluded: 40% do not offer Pre-65 coverage and 45% do not offer Post-65 coverage to new hires

• The average Pre-65 subsidy amount is 53% and the Post-65 amount is 55%

• The majority of employers are not considering making any changes to both their Pre-65 and Post-65 retiree medical coverage

401(k) plans are the most prevalent form of retirement program

• 96% of employers offer 401(k) plans – 37% vest employer 401(k)

contributions immediately

– 32% provide a maximum employee contribution match of 6.0%, similar to 2012 results

• 26% of employers offer a defined benefit plan with 48% of those plans closed to new accruals or closed to new employees

Paid Time Off (PTO) Banks are less common than traditional vacation/sick day programs

• 49% of employers offer a PTO combination of vacation, personal, and sick days, which averages to be 16 days annually for new hires and 21 days annually for full-time employees with 5 or more years tenure

• 51% of employers offer sick and vacation days separately

– On average, employees receive 7 sick days a year regardless of tenure

– On average, new hires receive 12 vacation days a year and employees with 5 or more years tenure receive 17 vacation days a year

– 82% offer new hires the same amount of sick days and 21% offer the same amount of vacation days as employees with 5 or more years tenure

• Employees receive an average of 9 holidays a year

49%of employers offer a PTO combination of vacation, personal, and sick days




Overview

S1: Key trends


Detailed findings

Appendix

Contact



Work-life programs remain common for many employers

Future solutions for mitigating health care cost increases

• 87% of employers have already implemented/are considering increased employee cost sharing

• 89% of employers have already implemented/are considering increasing employee contributions

• 44% of employers are considering offering a High deductible plan as a full replacement to their current plans and 17% have already implemented HDHPs as the only option

43%Telecommuting

36%Flexible schedules

25%Parental leave

23%Reduced hours

19%Community service

Health reform

• Fewer employers than last year indicated that the provisions of health reform will have a significant financial impact

• 39% of employers have already performed a Pay-or-Play analysis and 32% are planning to do so soon

The most common work-life programs included:

(With no major differences between smaller and large employers)




Detailed findings—Section 3: Medical plan costs

Overview

Detailed findings

S3: Medical plan costs

S4: Medical plan design highlights

S5: Wellness and Disease Management

S6: Welfare benefits

S7: Retiree medical

S8: Retirement plans

S9: Health reform– Affordable Care Act (ACA)

S10: Future solutions

Appendix

Contact




Section 3: Medical plan costs

Medical plan cost before/after plan change

Overview

Detailed findings





S7: Retiree medical




Appendix

Contact

Expected calendar year 2013 over 2012

Calendar year 2012 over 2011

Decrease 3% 6%

Unchanged 8% 10%

1%–4% increase 14% 14%

5%–9% increase 41% 35%

10%–14% increase 21% 22%

15%–19% increase 8% 7%

20% or greater increase 5% 6%

Average 7.8% increase 7.5% increase

Before plan changes

Expected calendar year 2013 over 2012

Calendar year 2012 over 2011

Decrease 8% 11%

Unchanged 9% 10%

1%–4% increase 24% 22%

5%–9% increase 39% 37%

10%–14% increase 15% 13%

15%–19% increase 3% 4%

20% or greater increase 2% 3%

Average 5.4% increase 5.3% increase

After plan changes

Healthcare costs continue to rise at rates in excess of Consumer Price Index (CPI) and employers are expecting them to increase slightly more this year than they did last year

The7.5%increase from 2011 to 2012 was more than expected based on the 7.0% indicated in the 2012 Touchstone Survey

The 5.3%increase from 2011 to 2012 was more than the expected rate of 5.1% from the 2012 Touchstone Survey





Medical plan 2013 monthly COBRA rates by tier

Overview

Detailed findings





S7: Retiree medical




Appendix

Contact

The majority of employers offer 3- or 4-tier rates with the most common coverage tier for any size employer being 4-tier

Monthly dollars by percentile

Tier/plan Distribution % 25th 50th 75th

2-tier rates

Employee18%

450 556 684

Family 1,200 1,496 1,793

3-tier rates

Employee

27%

450 518 588

Employee + 1 921 1,044 1,199

Employee + 2 or more 1,335 1,491 1,759

4-tier rates

Employee

50%

417 491 574

Employee + spouse 899 1,041 1,210

Employee + child(ren) 773 913 1,092

Family 1,263 1,485 1,725

5-tier rates

Employee

5%

402 512 563

Employee + spouse 901 1,030 1,283

Employee + child 656 778 1,029

Employee + children 902 1,002 1,222

Family 1,164 1,462 1,619

Tier <1,000 employees


5,000+ employees

2-tier 25% 12% 9%

3-tier 27% 35% 21%

4-tier 45% 48% 62%

5-tier 3% 5% 8%





Average medical plan monthly COBRA rates—2013 vs. 2012

Overview

Detailed findings





S7: Retiree medical




Appendix

Contact

Monthly dollars

Tier/plan 2013 20122013

Average 2012

Average% change from

2012 average

2-tier rates

Employee18% 12%

567 515 10.1%

Family 1,497 1,306 14.6%

3-tier rates

Employee

27% 25%

536 518 3.5%

Employee + 1 1,086 1,045 3.9%

Employee + 2 or more 1,551 1,505 3.1%

4-tier rates

Employee

50% 56%

512 485 5.6%

Employee + spouse 1,087 1,023 6.3%

Employee + children 963 909 5.9%

Family 1,532 1,449 5.7%

5-tier rates

Employee

5% 7%

470 499 -5.8%

Employee + spouse 1,020 1,084 -5.9%

Employee + child 808 872 -7.3%

Employee + children 984 1,122 -12.3%

Family 1,344 1,423 -5.6%

Overall employee-only 526 498 5.6%

Overall dependent 1,231 1,163 5.8%

The average employee-only COBRA rate increased by 5.6% from 2012 to 2013




Detailed findings—Section 4: Medical plan design highlights

Overview

Detailed findings





S7: Retiree medical




Appendix

Contact




Overview

Detailed findings





S7: Retiree medical




Appendix

Contact

Medical plans with the largest enrollment

Section 4: Medical plan design highlights

2013 2012 2011 2010 2009

PPO plan 54% 57% 57% 63% 61%

High deductible plan 21% 17% 17% 13% 8%

HMO plan 9% 13% 12% 9% 14%

POS plan 8% 8% 7% 10% 9%

EPO 6% 4% 6% 4% 5%

Indemnity 1% 1% 1% 1% 3%

All other plans (mini-med, Open Access, etc.)

1% 0% 0% 0% 0%

<1,000 employees


5,000+ employees

PPO plan 51% 59% 57%

High deductible plan 23% 14% 24%

HMO plan 12% 5% 7%

POS plan 8% 13% 5%

EPO 4% 8% 6%

Indemnity 2% 0% 0%

All other plans (mini-med, Open Access, etc.)

0% 1% 1%

PPO plans are still attracting the largest enrollment with employers. Survey participants selected the following plans as those with the largest enrollment:

The average enrollment of the plans that attract the most employees is 76% 60%

of the plans with the largest enrollment are self-insured

In 2013, the percentage of employers who had a High deductible plan with the largest enrollment increased to 21% whereas PPO and HMO plans saw a decrease




Overview

Detailed findings





S7: Retiree medical




Appendix

Contact

Medical plan options


• Large employers tend to offer more medical plan options to their employees than smaller employers

• 9% of employers offer 5 or more medical plan options

• The average number of plans offered has decreased from 3.0 plans in 2012 to 2.6 plans in 2013

Number of medical plan options

<1,000 employees


5,000+ employees

2013 total

2012 total

0 2% 0% 0% 1% 1%

1 36% 12% 12% 25% 23%

2 35% 34% 26% 33% 27%

3 20% 29% 30% 24% 26%

4 5% 12% 12% 8% 10%

5 1% 4% 7% 3% 5%

6 1% 3% 3% 2% 2%

7 0% 1% 2% 1% 1%

8 0% 2% 2% 1% 1%

9 0% 0% 1% 0% 1%

10 0% 0% 0% 0% 0%

10+ 0% 3% 5% 2% 3%

Average 2.0 plans 3.1 plans 3.6 plans 2.6 plans 3.0 plans

82%of employers offer 1 to 3 medical plan options to their employees




Overview

Detailed findings





S7: Retiree medical




Appendix

Contact

Most common medical plan features by plan type


PPO High deductible

HMO POS EPO

% Selected as largest enrolled plan 54% 21% 9% 8% 6%

EE contributions

Employee-only 20%–24% 20%–24% 20%–24% 20%–24% 20%–24%

Family 20%–24% 20%–24% 20%–29% 20%–24% 20%–24%

In-network

Deductible $500–$749 $1,000–$1,999 Not applicable Not applicable Not applicable

Out-of-pocket max $2,000–$2,999 $3,000–$4,999 Unlimited $1,000– $1,999 Unlimited

Coinsurance 20%–29% 20%–29% Not Applicable 20%–29% Not applicable

Primary care office visit $20–$24 copay Coinsurance $20–$24 copay $20–$24 copay $25–$29 copay

Specialist care office visit $35+ copay Coinsurance $35+ copay $35+ copay $35+ copay

Max hospital copay (per admit) Coinsurance only Coinsurance only $0 copay Coinsurance only $0 copay

Emergency room visit $100–$149 Coinsurance only $100–$149 $100–$149 $100–$149

Out-of-network

Deductible $1,000–$1,999 $4,000+ Not applicable $1,000–$1,999 Not applicable

Out-of-pocket max $5,000–$9,999 $5,000–$9,999 Unlimited $5,000–$9,999 Unlimited

Coinsurance 30%–49% 30%–49% Not applicable 30%–49% Not applicable




Overview

Detailed findings





S7: Retiree medical




Appendix

Contact

Medical plan in-network features


2013 2012 2011 2010 2009

Not applicable 18% 21% 22% 24% 31%

<$200 4% 8% 8% 8% 11%

$200–$299 10% 11% 14% 16% 15%

$300–$399 7% 9% 9% 9% 12%

$400–$499 5% 5% 5% 7% 5%

$500–$749 17% 19% 16% 14% 12%

$750–$999 7% 5% 4% 6% 3%

$1,000–$1,999 17% 13% 11% 11% 7%

$2,000–$2,999 9% 6% 7% 3% 3%

$3,000+ 6% 3% 4% 2% 1%

Education & Nonprofit

Financial Services

Health Industries Manufacturing

Retail & Consumer Services Technology

Not Applicable 35% 20% 23% 11% 12% 23% 13%

<$200 6% 3% 7% 6% 3% 1% 3%

$200–$299 13% 9% 10% 8% 11% 9% 11%

$300–$399 8% 5% 4% 6% 6% 2% 11%

$400–$499 1% 7% 6% 5% 7% 0% 3%

$500–$749 11% 13% 17% 20% 16% 23% 20%

$750–$999 6% 3% 3% 9% 10% 5% 12%

$1,000–$1,999 11% 20% 15% 17% 21% 14% 12%

$2,000–$2,999 7% 14% 10% 10% 7% 13% 9%

$3,000+ 2% 6% 5% 8% 7% 10% 6%

Single deductible

For the medical plan selected as having the largest enrollment, the historical and industry breakdown of the medical deductible feature follows:

The typical in-network deductible is now over $500, more than double what it was in 2009 65% of respondents in the service industry have a deductible of $500 or more, while manufacturing is a close second with 64%




Overview

Detailed findings





S7: Retiree medical




Appendix

Contact



Out-of-pocket maximum

For the medical plan selected as having the largest enrollment, the historical and industry breakdown of the medical out-of-pocket maximum feature follows:

2013 2012 2011 2010 2009

<$1,000 6% 13% 10% 10% 11%

$1,000–$1,999 19% 27% 27% 28% 34%

$2,000–$2,999 26% 27% 27% 29% 22%

$3,000–$4,999 24% 16% 20% 17% 15%

$5,000–$9,999 11% 6% 6% 5% 4%

$10,000+ 1% 1% 1% 0% 1%

Unlimited 13% 10% 9% 11% 13%


Financial Services



<$1,000 4% 6% 8% 7% 4% 6% 9%

$1,000–$1,999 24% 15% 21% 20% 22% 17% 20%

$2,000–$2,999 24% 26% 24% 30% 23% 17% 25%

$3,000–$4,999 11% 25% 22% 24% 29% 22% 28%

$5,000–$9,999 4% 13% 9% 10% 13% 19% 13%

$10,000+ 3% 1% 2% 1% 2% 1% 0%

Unlimited 30% 14% 14% 8% 7% 18% 5%

30%of Education & Nonprofit employers have an unlimited out-of-pocket maximum whereas only 5% of Technology employers have an unlimited out-of-pocket maximum




Overview

Detailed findings





S7: Retiree medical




Appendix

Contact



Employee coinsurance

For the medical plan selected as having the largest enrollment, the historical and industry breakdown of the employee coinsurance for most services medical feature follows (only coinsurance plans were considered):

Employee coinsurance has been

gradually increasing since 2009, with Retail & Consumer and Services requiring the highest coinsurance

2013 2012 2011 2010 2009

0%–9% 10% 12% 8% 6% 13%

10%–19% 36% 39% 41% 41% 47%

20%–29% 47% 41% 46% 49% 35%

30%–49% 2% 3% 1% 2% 2%

50%+ 5% 5% 4% 2% 3%


Financial Services



0%–9% 19% 11% 12% 7% 6% 10% 7%

10%–19% 38% 43% 41% 38% 22% 38% 47%

20%–29% 36% 39% 44% 48% 63% 42% 40%

30%–49% 2% 2% 1% 3% 6% 0% 0%

50%+ 5% 5% 2% 4% 3% 10% 6%




Overview

Detailed findings





S7: Retiree medical




Appendix

Contact



Office visits

For the medical plan selected as having the largest enrollment, the following is the breakdown of the medical features:

2013 2012 2011 2010 2009

Not applicable (free visit) 8% 6% 7% 6% 8%

$1–$9 copay 1% 1% 1% 1% 2%

$10–$19 copay 12% 16% 17% 20% 26%

$20–$24 copay 24% 26% 29% 30%46%

$25–$29 copay 20% 19% 16% 17%

$30–$34 copay 11% 10% 8% 6%6%

$35 or greater copay 4% 3% 4% 2%

Coinsurance applies 20% 19% 18% 18% 12%

2013 2012 2011 2010 2009

Not applicable (free visit) 5% 4% 5% 3% 9%

$1–$9 copay 0% 1% 1% 0% 0%

$10–$19 copay 6% 6% 9% 10% 14%

$20–$24 copay 9% 10% 11% 15%31%

$25–$29 copay 10% 12% 9% 11%

$30–$34 copay 13% 12% 14% 17%31%

$35 or greater copay 34% 33% 29% 21%

Coinsurance applies 23% 22% 22% 23% 15%

Primary care office visit

Specialist office visit

• The average primary care copay has not increased significantly since 2009

• The percentage of employers offering coinsurance as opposed to copays for both primary care and specialist has also been increasing

51%of employers have the same specialist office copay as primary care




Overview

Detailed findings





S7: Retiree medical




Appendix

Contact



Hospital and ER

For the medical plan selected as having the largest enrollment, the following is the breakdown of the medical features:

46% of employers are applying coinsurance to hospital admissions (up from 37% in 2009)

2013 2012 2011 2010 2009

$0 copay 18% 20% 16% 0% 18%

$1–$199 copay 9% 11% 13% 12% 14%

$200–$399 copay 14% 16% 17% 24% 21%

$400–$599 copay 9% 7% 7% 7% 7%

$600+ copay 4% 5% 5% 4% 3%

Coinsurance only 46% 41% 42% 53% 37%

2013 2012 2011 2010 2009

<$50 copay 4% 7% 8% 2% 12%

$50–$99 copay 15% 17% 21% 26% 29%

$100–$124 copay28%

27% 26% 30% 30%

$125–$149 copay 3% 4% 2% 2%

$150–$199 copay 14% 13%19% 17% 10%

$200+ copay 14% 12%

Coinsurance only 25% 21% 22% 23% 17%

Maximum hospital cost per admission

Emergency room copay per visit

ER copays have been

steadily increasing or moving to coinsurance over the past five years




Overview

Detailed findings





S7: Retiree medical




Appendix

Contact

Medical plan out-of-network features


For the medical plan selected as having the largest enrollment:

The typical out-of-network deductible is now over

$1,000,

about twice the typical in-network deductible

2013 2012 2011 2010 2009

Not applicable 13% 17% 18% 17% 22%

<$200 1% 3% 2% 1% 7%

$200–$499 9% 12% 13% 19% 21%

$500–$749 15% 17% 17% 19% 24%

$750–$999 7% 8% 6% 9% 6%

$1,000–$1,999 25% 24% 23% 21% 15%

$2,000–$2,999 10% 9% 8% 6% 0%

$3,000+ 20% 10% 13% 8% 5%

Deductible

2013 2012 2011 2010 2009

<$1,000 3% 4% 5% 5% 19%

$1,000–$1,999 6% 10% 9% 9% 15%

$2,000–$2,999 11% 16% 12% 16% 16%

$3,000–$4,999 27% 27% 29% 26% 27%

$5,000–$9,999 32% 22% 25% 24% 3%

$10,000+ 11% 7% 8% 9% 7%

Unlimited 10% 14% 12% 11% 13%

2013 2012 2011 2010 2009

Not applicable * 16% 18% 20% - -

0%–19% 4% 6% 7% 6% 12%

20%–29% 17% 17% 16% 19% 23%

30%–39% 49%

22% 23% 28% 30%

40%–49% 23% 23% 29% 21%

50%+ 14% 14% 11% 18% 14%

Out-of-pocket maximum

Employee coinsurance for most services

* Not a survey response option in prior years

53% have an out-of-network out-of-pocket maximum of $5,000 or more (up from 23% in 2009)




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High deductible plans


• Large employers tend to offer more HSA and HRA plans than smaller employers

• Enrollment in both HSA and HRA plans has been steadily increasing the last few years

Employer subsidy

Average enrollment

% Offering

HSA HRA

<1,000 employees


5,000+ employees

2013 total

<1,000 employees


5,000+ employees

2013 total

$0 34% 25% 28% 30% 1% 2% 3% 2%

$1–$499 13% 19% 21% 17% 17% 17% 25% 20%

$500–$999 29% 41% 45% 37% 31% 57% 48% 42%

$1,000–$1,999 16% 13% 6% 12% 29% 16% 22% 24%

$2,000–$2,999 4% 1% 0% 2% 15% 2% 2% 8%

$3,000+ 4% 1% 0% 2% 7% 6% 0% 4%

HSA HRA

2013 34.6% 54.2%

2012 28.2% 43.2%

2011 29.5% 37.9%

2010 20.5% 34.2%

HSA HRA

<1,000 employees 35% 18%

1,000–5,000 employees 30% 20%

5,000+ employees 46% 25%

2013 total 39% 20%

39%of employers are offering High deductible plans with an HSA

20%of employers are offering High deductible plans with an HRA




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Financing of medical plans with the largest enrollment


2013 2012 2011 2010 2009

Self-insured 31% 22% 20% 29% 21%

Fully-insured 65% 65% 67% 68% 70%

Minimum premium arrangement 4% 13% 13% 3% 9%

<500 employees

2013 2012 2011 2010 2009

Self-insured 55% 49% 54% 69% 50%

Fully-insured 43% 47% 39% 26% 46%


500–1,000 employees

2013 2012 2011 2010 2009

Self-insured 85% 86% 87% 87% 84%

Fully-insured 13% 12% 12% 11% 14%


1,000+ employees

31% of employers with <500 employees and 55% of employers with 500-1,000 employees were self-insured in 2013

In total, 60% of employers were self-insured in 2013




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Most common prescription drug plan features by plan type


In-network prescription drug deductible

PPO POS High deductible

HMO EPO

Deductible N/A N/A N/A N/A N/A

Retail (30-Day Supply)

Generic $10–$19 copay

$10–$19 copay

$10–$19 copay

$10–$19 copay

$10–$19 copay

Brand “formulary”

$30–$34 copay

$30–$34 copay

$35–$49 copay

$35–$49 copay

$35–$49 copay

Brand “non-formulary”

$50–$54 copay

$50–$54 copay

$50–$54 copay

$50–$54 copay

$50–$54 copay & $60–$74 copay

Specialty $50–$59 copay

$50–$59 copay

$50–$59 copay

Not covered

$50–$59 copay & not

covered

• Most prescription drug plans are copay-based rather than deductible or coinsurance based

• Copay programs continue to be not only the most popular across all plan types, but were also observed to utilize common metric bands and differentials across the three drug classifications: Generic, Brand “formulary”, and Brand “non-formulary”

• The majority of plans are using a $20–$25 copay differential between drug types, which is traditionally needed to achieve consumer behavior changes

74%

15%

5%

4%1%

1%

N/A

Applies to medical deductible

<$100

$100–$199

$200–$299

$300+

A majority of participating employers (74%) do not have a prescription drug deductible

While 74% of the plans do not apply a deductible on pharmacy claims, when applicable, the most common deductible continues to be an integrated deductible with medical claims rather than a standalone prescription deductible




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In-network prescription drug plan features


For the medical plan selected as having the largest enrollment, the following is the breakdown of the prescription drug plan features:

The average copay for generics has been static for the past five years reflecting the relative low inflation of generic drugs and the Plan Sponsors continued interest in encouraging the use of generic alternatives

2013 2012 2011 2010 2009

Not covered 1% 2% 2% 1% 2%

<$10 copay 30% 21% 21% 22% 21%

$10–$14 copay 51%

42% 43% 43% 43%

$15–$19 copay 12% 10% 11% 10%

$20 or greater copay 4% 7% 5% 4% 5%

<14% coinsurance 5% 6% 6% 6% 7%

15%–24% coinsurance 6% 8% 8% 9% 8%

25%+ coinsurance 3% 2% 5% 4% 4%

Average copay, not including coinsurance $13 $14 $13 $13 $13

2013 2012 2011 2010 2009

Not covered 2% 2% 3% 1% 3%

<$19 copay 7% 6% 6% 5% 8%

$20–$29 copay 27% 28% 32% 36% 37%

$30–$34 copay 23% 20% 17% 16%24%

$35 or greater copay 25% 18% 13% 9%

<15% coinsurance 2% 2% 2% 2% 2%

15%–34% coinsurance 11% 21% 22% 27% 24%

35% or greater coinsurance

3% 3% 5%4% 2%


Generic 30-day supply

Brand “formulary” 30-day supply

The average copay for brand “formulary” has been slowly increasing since 2009, going from

$29 to $33




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In-network prescription drug plan features


For the medical plan selected as having the largest enrollment, the following is the breakdown of the prescription drug plan features:

59% of employers have the same specialty drug cost sharing requirements as retail brand

2013 2012 2011 2010 2009

Not covered 3% 4% 6% 4% 6%

<$30 copay 7% 8% 9% 4% 7%

$30–$49 copay 25% 24% 26% 32% 35%

$50–$59 copay 22% 23% 18% 20% 15%

$60 or greater copay 18% 13% 10% 8% 9%

<19% coinsurance 2% 2% 3% 2% 3%

20%–29% coinsurance 6% 6% 6% 9% 7%

30%–39% coinsurance 6% 7% 8% 5% 7%

40% or greater coinsurance 11% 13% 14% 16% 11%

Average copay, not including coinsurance

$51 $49 $46 $47 $46

2013 2012 2011 2010 2009

Not covered 13% 9% 11% 6% 9%

<$30 copay 3% 8% 5% 22% 42%

$30–$49 copay 15% 20% 21% 20% 14%

$50–$59 copay 18% 19% 17% 13% 6%

$60 or greater copay 20% 16% 13% 7% 8%

<19% coinsurance 4% 3% 3% 3% 4%

20%–24% coinsurance 8% 7% 7% 10% 5%

25%–39% coinsurance 10% 8% 18% 10% 7%

40% or greater coinsurance 9% 10% 11% 9% 5%


Brand “non-formulary” 30-day supply

Specialty drug tier 30-day supply

For the medical plan selected as having the largest enrollment, the following is the summary of the prescription drug plan average copay amounts:

2013 2012 2011 2010 2009

Generic $13 $14 $13 $13 $13

Brand “formulary” $33 $32 $30 $29 $29

Brand “non-formulary”

$51 $49 $46 $47 $46

Specialty drug tier $60 $56 $44 $39 $31

30-day supplies

• Copays for non-preferred brands continues to be approximately 55% higher than preferred brands

• The average copay for specialty drugs has almost doubled since 2009, going from a $31 copay to a $60 copay




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Contribution percentages for largest enrolled plan


Employee-only coverage

2013 2012 2011 2010 2009

Less than 10% contribution 16% 16% 17% 14% 18%

10%–14% 13% 11% 12% 11% 11%

15%–19% 14% 15% 19% 18% 16%

20%–24% 24% 27% 27% 24% 27%

25%–29% 14% 13% 14% 16% 16%

30%–39% 12% 9% 8% 10% 9%

40%–49% 3% 2% 1% 3% 1%

50%+ 4% 7% 2% 4% 2%

Average contribution 22% 23% 20% 21% 20%

2013 2012 2011 2010 2009

Less than 10% contribution 7% 7% 8% 7% 9%

10%–14% 9% 7% 8% 7% 7%

15%–19% 13% 11% 15% 16% 14%

20%–24% 22% 27% 23% 24% 27%

25%–29% 15% 17% 18% 19% 18%

30%–34% 13% 11% 12% 13% 11%

35%–39% 6% 3% 3% 3% 4%

40%–49% 5% 4% 3% 3% 4%

50%+ 10% 13% 10% 8% 6%

Average contribution 29% 30% 28% 27% 26%

Family coverage

Employee contributions as a percentage of premium for the largest enrolled plan appear to have leveled out Although the largest enrolled plans tend to have higher cost-sharing at the point of care




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Contribution percentages vary by company size


The most common employee contribution level is

20%–24% of premium for both employee-only and family coverage, but...

...the average employee contribution for family coverage is

4%–10% higher as a percentage of premium

Smaller employers tend to have higher contribution levels for family coverage than large employers

Employee-only coverage

Contribution <1,000

employees1,000–5,000 employees

5,000+ employees

<10% 22% 11% 8%

10%–14% 15% 12% 12%

15%–19% 12% 16% 17%

20%–24% 18% 30% 30%

25%–29% 12% 14% 16%

30%–39% 12% 13% 11%

40%+ 9% 4% 6%

Average 21% 22% 23%

Family coverage

Contribution <1,000


5,000+ employees

<10% 10% 5% 2%

10%–14% 11% 6% 8%

15%–19% 12% 16% 13%

20%–24% 17% 26% 29%

25%–29% 13% 15% 22%

30%–34% 11% 15% 13%

35%–39% 6% 6% 5%

40%–49% 6% 6% 3%

50%–74% 7% 2% 1%

75%+ 7% 3% 4%

Average 31% 27% 27%




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Stop loss coverage


54% of self-insured plans do not have aggregate stop loss coverage, down from 66% in 2012 and 21% do not have specific/individual coverage, down from 30% in 2012

54%

7%4%

8%

21%

6%

None

<115%

115%

120%

125%

Other

Aggregate coverage


0% 10% 20% 30%

$1,000,000+

$500,000–$999,999

$300,000–$499,999

$200,000–$299,999

$100,000–$199,999

$50,000–$99,999

<$50,000

None

For the medical plan(s) selected as self-insured, the following is the breakdown of stop loss coverage:

Stop loss coverage by company size

<1,000 employees


5,000+ employees

<115% 13% 7% 3%

115% 6% 5% 1%

120% 12% 8% 5%

125% 32% 25% 8%

Other 8% 3% 4%

N/A 29% 52% 79%

Aggregate coverage

<1,000 employees


5,000+ employees

<$50,000 5% 0% 0%

$50,000–$99,999 36% 4% 0%

$100,000–$199,999 38% 30% 6%

$200,000–$299,999 9% 30% 12%

$300,000–$499,999 2% 18% 18%

$500,000–$999,999 1% 7% 13%

$1,000,000+ 3% 2% 6%

N/A 6% 9% 45%


Large employers tend to purchase less aggregate stop loss coverage than smaller employers:

The majority of self-insured smaller employers obtain specific/individual stop loss coverage whereas almost half of large employers do not obtain specific/individual stop loss coverage:




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Medical plan providers with the largest enrollment


Blue Cross (Wellpoint/Anthem + Others) has the largest share of those who participated in the survey, but other health plans and TPAs combined continue to be prevalent, especially among smaller employers

Survey participants selected that they use the following administrators for their medical plans with the largest enrollment:

<1,000 employees


5,000+ employees

Aetna, including Coventry 6% 12% 13%

BCBS–Wellpoint/Anthem 10% 9% 12%

BCBS–Other than Wellpoint/Anthem 29% 31% 21%

CIGNA 8% 18% 11%

UnitedHealthcare 18% 19% 26%

Other health plan 20% 7% 12%

Other third party administrator (TPA) 9% 4% 5%

Vendor satisfaction

Satisfaction with vendors has been on an overall decline since 2011

• 38% indicated they were very satisfied with claim administration in 2013 versus 73% in 2011• 18% indicated they were very satisfied with consumer/decision support in 2013 versus 73% in 2011• 19% indicated they were very satisfied with wellness in 2013 versus 58% in 2011• Employers are no longer very satisfied with both core administrative (claims administration & member services)

or value added (network discount, medical management, & wellness) services

2013 2012 2011

Very satisfied

SatisfiedNot

satisfiedVery

satisfiedSatisfied

Not satisfied

Very satisfied

SatisfiedNot

satisfied

Claim administration 38% 58% 4% 44% 52% 4% 73% 25% 2%

Consumer/decision support 18% 68% 14% 22% 66% 12% 73% 24% 3%

Member services 27% 65% 8% 34% 59% 7% 63% 34% 3%

Medical management 23% 70% 7% 27% 66% 7% 56% 40% 4%

Network discounts 36% 59% 5% 44% 53% 3% 45% 45% 10%

Pharmacy benefit administration * 25% 69% 6% - - - - - -

Wellness 19% 63% 18% 23% 62% 15% 58% 37% 5%




Click to return to the table of contents The benefit administration of medical plans by company size


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Smaller employers are trending towards more in-sourcing and co-sourcing and moving away from outsourcing and larger employers are trending towards more co-sourcingMore employers are co-sourcing in 2013 as compared to 2012 and fewer employers are outsourcing

<1,000 employees 1,000–5,000 employees 5,000+ employees Total

2013 2012 2013 2012 2013 2012 2013 2012

Insourced 38% 33% 31% 28% 21% 21% 32% 27%

Outsourced 24% 44% 25% 41% 39% 55% 28% 47%

Co-sourced 38% 23% 44% 31% 40% 24% 40% 26%




Detailed findings—Section 5: Wellness and Disease Management

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Click to return to the table of contents Wellness and Disease Management programs

Section 5: Wellness and Disease Management

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Employers offering Wellness and Disease Management programs:

Wellness programs Disease Management programs

2013 2012 2011 2010 2013 2012 2011 2010

<1,000 employees 57% 56% 52% 65% 31% 28% 40% 41%

1,000–5,000 employees 71% 76% 81% 73% 60% 65% 74% 68%

5,000+ employees 85% 85% 88% 85% 75% 81% 86% 83%

2013 total 68% 72% 73% 76% 49% 58% 66% 68%

As company size increases, the percentage of employers offering Wellness and Disease Management programs increasesIn 2013, the prevalence of both Wellness and Disease Management programs declined for mid-size employers, and Disease Management also declined for large employers

Highlights

Wellness programs• 68% of all survey participants and

85% of large employers offer Wellness programs to eligible individuals

• 76% of employers with 20,000+ employees and 50% of employers with <500 employees spend more than 1.0% of total medical costs on Wellness programs

• 36% of employers use their medical vendor for their Wellness programs, 25% manage the programs in-house, and 39% utilize an external vendor

Disease Management programs• 49% of all survey participants and

75% of large employers offer Disease Management programs to eligible individuals although participation rates are typically low (ranging from 9% to 18%)

• 84% of employers use their medical vendor for their Disease Management programs, 4% manage the programs in-house, and 12% utilize an external vendor




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Wellness programs: Incentives


For those employers that offer incentives, participation rates increase, although not dramatically:

82%of employers offer incentives for their Wellness programs

Programs where incentives did not significantly impact participation:

• Employee assistance program (EAP)• Ergonomics• Executive health exam• On-site fitness• On-site health clinic• Stress management• Tobacco cessation

Incentives Wellness

Cash/gift card <$100 16%

Cash/gift card $100–$199 6%

Cash/gift card $200+ 9%

Annual premium incentive <$100 3%

Annual premium incentive $100–$199 5%



Annual premium incentive $500+ 13%

Small gifts 12%

Raffles for large gifts 10%

Other 14%

0%

10%

20%

30%

40%

50%

60%

Weight managementNutritionHealth risk questionnaireBody mass index

No incentive Incentive




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Disease Management programs: Incentives


For those employers that offer incentives, the impact of incentives on participation varied:

19%offer incentives for their Disease Management programs

Programs where incentives did not significantly impact participation:

• Cardiac • Lower back pain

Common other incentives:

• Penalty if they do not participate• FSA/HSA/HRA contributions• Deductible credit/copay waiver

Incentives Disease Management

Cash/gift card <$100 16%

Cash/gift card $100–$199 10%

Cash/gift card $200+ 5%

Annual premium incentive <$100 0%




Annual premium incentive $500+ 8%

Small gifts 3%

Raffles for large gifts 4%

Other 41%

0%

5%

10%

15%

20%

25%

30%

OtherDiabetesDepressionCOPDCancerAsthma

No incentive Incentive




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Wellness and Disease Management programs


Wellness program Offered? Utilization

Employee assistance program 86% 29%

Health risk questionnaire 80% 52%

Tobacco cessation 61% 9%

Body mass index 58% 49%

Weight management 52% 15%

Nutrition 41% 23%

On-site fitness 38% 22%

Stress management 35% 15%

Ergonomics 25% 36%

Executive health exam 23% 42%

On-site health clinic 15% 42%

Disease Management program Offered? Utilization

Diabetes 70% 11%

Asthma 59% 9%

Cardiac 57% 9%

Chronic Obstructive Pulmonary Disease

54% 8%

Cancer 46% 11%

Depression 35% 10%

Lower back pain 35% 8%

86%of employers offer an Employee assistance program (EAP) and 29% of employees utilize EAP when offered

15%of employers offer an On-site health clinic with 42% average participation

70%of employers offer a Diabetes program and 11% of eligible employees participate in this program when offered

Effectiveness of Wellness programs at:

Very effective

Somewhat effective

Not effective

Mitigating healthcare costs 11% 67% 22%

Improving performance and productivity

9% 68% 23%

Enhancing employee engagement, attraction and loyalty

17% 65% 18%

Reinforcing corporate responsibility and image

23% 62% 15%

Effectiveness of Disease Management programs at:

Very effective

Somewhat effective

Not effective

Mitigating healthcare costs 11% 71% 18%

Improving performance and productivity

6% 66% 28%

Enhancing employee engagement, attraction and loyalty

6% 57% 37%

Reinforcing corporate responsibility and image

9% 58% 33%

Overall, satisfaction with Wellness and Disease Management programs has remained fairly consistent to last year




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ROI from Wellness and Disease Management programs


Of those that measure ROI for Wellness and Disease Management programs,

50% and 64% respectively have a positive impact

Return on investment (ROI)

Wellness Disease

Management

Do not measure 45% 55%

Insufficient information provided to calculate ROI 47% 34%

Below 1 to 1 1% 1%

1 to 1 3% 3%

2 to 1 2% 4%

3 to 1 1% 2%

4 to 1 or more 1% 1%

0%2%4%6%8%

10%12%14%16%18%20%

5,000+1,000–4,999<1,000

Disease Management Wellness

4%

4%

7%

6%

19%

14%

Employers measuring ROI by company size




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Work-life programs


Work-life programs by company size

The popularity of work-life programs has seen a decrease in 2013 whereas in the past they were generally increasing

Employers sponsor the following work-life programs:

2013 2012 2011 2010 2009

Telecommuting 43% 55% 51% 47% 51%

Flexible work schedule 36% 46% 46% 41% 48%

Parental leave 25% 36% 35% 34% 38%

Reduced hours 23% 31% 30% 30% 30%

Community service time 19% 26% 25% 20% 19%

Adult leave/care * 17% 16% - - -

Childcare 13% 25% 22% 20% 28%

Job share 8% 14% 14% 16% 20%

Concierge service 5% 8% 9% 8% 10%

Other 2% 4% 4% 3% 3%

* Not a survey response option in prior years More than one option was allowed to be chosen

2013 2012

<1,000 employees


5,000+ employees

<1,000 employees


5,000+ employees

Telecommuting 35% 45% 56% 49% 54% 62%

Flexible work schedule 28% 39% 47% 36% 47% 53%

Parental leave 18% 30% 34% 30% 45% 35%

Reduced hours 18% 27% 28% 26% 34% 34%

Community service time 15% 23% 24% 18% 30% 29%

Adult leave/care 12% 20% 23% 12% 19% 16%

Job share 5% 7% 16% 7% 13% 21%

Childcare 6% 12% 29% 8% 26% 41%

Concierge service 3% 8% 7% 5% 10% 11%

Other 2% 1% 3% 3% 5% 5%

More than one option was allowed to be chosen

Availability of work-life programs increases as company size increases

• Telecommuting is the most common work-life program at any company size

• As size increases, availability of work-life programs also increases




Detailed findings—Section 6: Welfare benefits

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2013 2012

Employer subsidized Voluntary Employer subsidized Voluntary

Auto insurance 3% 97% 3% 97%

Basic life insurance 96% 4% 99% 1%

Cancer/specified disease insurance 6% 94% 3% 97%

Dental 86% 14% 86% 14%

Dependent life 17% 83% 13% 87%

Homeowners insurance 2% 98% 0% 100%

Legal insurance 8% 92% 6% 94%

Long-term care insurance 18% 82% 7% 93%

Long-term disability 83% 17% 83% 17%

Personal excess liability insurance 19% 81% 15% 85%

Pet insurance 0% 100% 0% 100%

Short-term disability 85% 15% 86% 14%

Supplement/optional life 9% 91% 5% 95%

Vision 51% 49% 53% 47%

Benefit programs offered

Of those employers that offer long-term care insurance, the percentage who subsidize coverage has increased since 2012

For employers offering the following welfare benefit programs:




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Paid time off (PTO) policies


23% of respondents provide the same amount of PTO days for a new hire as they do for a full-time employee with 5 or more years’ tenure

Do you offer paid time off that employees can use to address family needs in addition to family medical leave of absence?

• As employer size increases, paid time off also increases

• Only 16% of employers are not offering additional time off to address family needs/other personal needs as compared to 44% last year

Average5+ years tenure

New hire

PTO Days 21 days 16 days

Do you offer a PTO bank rather than a traditional vacation & sick day allotment?

49%51%

Yes

No

Number of PTO days

0%

5%

10%

15%

20%

25%

30%

35%

30+25–2920–2415–1910–14<10

5+ years tenure New hire

<500 employees

500–1,000 employees

1,000+ employees

2013 total

Bereavement 72% 82% 81% 77%

Maternity leave (birth of a child) 37% 50% 52% 44%

Military leave 31% 49% 54% 42%

Paternity leave (birth of a child) 26% 35% 30% 29%

Adoption leave (placement of a child) 21% 34% 37% 28%

Family illness, including care of extended family 22% 29% 24% 24%

Not available/not offering 22% 11% 9% 16%

Other 7% 12% 11% 9%

Sabbatical leave 3% 8% 11% 7%

Paid time off by company size





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Paid time off (PTO) policies


82% of respondents provide the same number of sick days and 21% of respondents provide the same number of vacation days for a new hire as they do for a full-time employee with 5 or more years tenure

Average 5+ years tenure New hire

Holidays 9 days

Vacation days 17 days 12 days

Sick days 7 days 7 days


Sick/Vacation policies vary by: Vacation Sick

Tenure 92% 20%

Level 35% 15%

Hours worked (full-time vs. part-time) 74% 63%

Paid holidays

17%24%

12%

18%

11%

9%

4%

2%3%

<8

8

9

10

11

1213

14

15+

Number of vacation days

0%

10%

20%

30%

40%

50%

60%

25+20–2415–1910–14<10


Number of sick days

0%

5%

10%

15%

20%

25%

30%

35%

40%

Unlimited20+13–1910–128–95–7<5





Detailed findings—Section 7: Retiree medical

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Click to return to the table of contents Retiree medical programs for current retirees

Section 7: Retiree medical

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Employers offering pre-65 retiree medical programs to current retirees 2013 2012

Do not offer any pre-65 retiree medical 64% 52%

Pre-65 retiree medical, access only 12% 18%

Pre-65 retiree medical, company subsidized 13% 16%

Pre-65 retiree medical to grandfathered groups only, company subsidized 11% 14%

Employers offering post-65 retiree medical programs to current retirees 2013 2012

Do not offer any post-65 retiree medical 69% 59%

Post-65 retiree medical, access only 10% 14%

Post-65 retiree medical, company subsidized 9% 13%

Post-65 retiree medical to grandfathered groups only, company subsidized 12% 14%

The percentage of employers offering pre-65 and post-65 retiree medical programs to current retirees has decreased since 2012 (Pre-65: from 48% in 2012 to 36% in 2013 and Post-65: from 41% in 2012 to 31% in 2013)




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Retiree medical programs for new hires


Pre-65 retiree medical programs for new hires<1,000


5,000+ employees

2013 total

Do not offer any pre-65 retiree medical 47% 44% 32% 40%

Pre-65 retiree medical, access only 18% 36% 44% 26%

Pre-65 retiree medical, company subsidized 35% 20% 24% 34%

Post-65 retiree medical programs for new hires<1,000


5,000+ employees

2013 total

Do not offer any post-65 retiree medical 54% 43% 39% 45%

Post-65 retiree medical, access only 16% 37% 41% 31%

Post-65 retiree medical, company subsidized 30% 20% 20% 24%

Of employers offering retiree medical programs to current retirees, the following are the percentages of employers offering retiree medical programs to new hires as well:

As size increases, more employers offer retiree medical programs to new hires

Of the 36% of employers that offer pre-65 plans to

current retirees, 60% offer these plans to new hires as well

Of the 31% of employers that offer post-65 plans to

current retirees, 55% offer these plans to new hires as well




Overview

Detailed findings





S7: Retiree medical




Appendix

Contact

Retiree medical programs


On average, employers subsidize

53% for pre-65 coverage

and 55% for post-65 coverage

Percent company subsidy, for retiree medical coverage that is subsidized:

0%

5%

10%

15%

20%

25%

30%

80%+60%–79%40%–59%20%–39%<20%

Pre-65 Post-65

% o

f em

plo

yers

sub

sid

izin

g

Likelihood that your company will consider changing or eliminating retiree medical benefits:

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Post-65Pre-65

Very likely Somewhat likely Unlikely

18%

35%

47%

19%

30%

51%




Overview

Detailed findings





S7: Retiree medical




Appendix

Contact

Retiree medical plans


What employers are considering over the next three years regarding their retiree medical plans:

Pre-65 retireeAlready

implementedUnder

considerationNot under

consideration

Move retirees to a private exchange with a company subsidy 1% 50% 49%

Keep current benefits and contribution rates 17% 44% 39%

Continue to sponsor coverage but increase retiree cost-sharing or contributions 13% 41% 46%

Move retirees to a private exchange without a company subsidy 0% 33% 67%

Terminate coverage 2% 25% 73%

Implement dollar caps for company subsidies for some/all retirees 29% 20% 51%

Post-65 retireeAlready

implementedUnder

considerationNot under

consideration

Move retirees to a private exchange with a company subsidy 6% 48% 46%

Keep current benefits and contribution rates 15% 45% 40%

Continue to sponsor coverage but increase retiree cost-sharing or contributions 9% 41% 50%

Move retirees to a private exchange without a company subsidy 1% 33% 66%

Terminate coverage 2% 25% 73%

Implement employer group waiver plan (EGWP) 13% 26% 61%

Implement dollar caps for company subsidies for some/all retirees 33% 20% 47%

About half of employers are considering moving retirees to a private exchange with a company subsidy for both pre-65 and post-65 up from 34% for pre-65 and 37% for post-65 in 2012




Detailed findings—Section 8: Retirement plans

Overview

Detailed findings





S7: Retiree medical




Appendix

Contact



Click to return to the table of contents Employer-provided retirement programs

Section 8: Retirement plans

Overview

Detailed findings





S7: Retiree medical




Appendix

Contact

2013 2012 2011

401(k) (or 403(b)) defined contribution plan 96% 95% 86%

Defined benefit 26% 33% 32%

Other 13% 12% 11%

None * 2% - -

Type of employer-provided retirement programs sponsored:

401(k) and 403(b) plans are typically the most common retirement programs sponsored by employers



There is no difference in 401(k) plan sponsorship by company size, however, as size increases more employers offer defined benefit plans (smaller employers with 15% vs. large employers with 46%)

Survey participants indicated that they participate in the following other retirement programs:

• 457 Plans

• Employee Stock Ownership Plan (ESOP)

• Profit sharing


Financial Services



401(k) (or 403(b)) defined contribution plan

91% 97% 93% 98% 95% 98% 97%

Defined benefit 26% 34% 30% 24% 17% 10% 17%

Other 14% 14% 17% 10% 13% 15% 7%

None 3% 2% 1% 2% 4% 1% 0%

Type of employer-provided retirement programs sponsored:


Employer-provided retirement programs by industry

401(k) plans are the most popular retirement plan sponsored in each industry with very few employers offering no retirement programs whereas the prevalence of defined benefit plans differs greatly between industries from Financial Services leading with 34% to Services with only 10% sponsoring programs




Overview

Detailed findings





S7: Retiree medical




Appendix

Contact

Defined benefit plans


Defined benefit plans open to all employees have been decreasing gradually over the last 3 years

46% of employers maintain a funded status percentage of 90% or above in 2013 up from 42% in 2012

If offered, defined benefit plan currently: 2013 2012 2011

Open to all employees 52% 53% 55%

Open to employees hired before a certain date 28% 30% 31%

Frozen to all accruals 20% 17% 14%

If offered, defined benefit plan’s funded status percentage: 2013 2012

<70% 5% 10%

70%–79.9% 11% 9%

80%–89.9% 38% 39%

90%–99.9% 16% 18%

100%+ 30% 24%

Hybrid/cash balance (% of compensation) 2013 2012 2011

% Offering 31% 31% 29%

<1.0% 3% 0% 2%

1.0%–1.9% 0% 0% 5%

2.0%–2.9% 8% 10% 7%

3.0%–3.9% 13% 18% 16%

4.0%–4.9% 15% 16% 16%

5.0%–5.9% 20% 20% 19%

6.0%+ 41% 36% 35%

Of those employers sponsoring defined benefit plans, the following types are offered with their respective accrual rate:

Final average earning (% per year of service) 2013 2012 2011

% Offering 52% 64% 60%

<1.0% 3% 7% 1%

1.0%–1.9% 59% 44% 56%

2.0%–2.9% 15% 19% 20%

3.0%–3.9% 3% 11% 9%

4.0%–4.9% 5% 3% 2%

5.0%–5.9% 3% 8% 2%

6.0%+ 12% 8% 10%

Career average earning (% per year of service) 2013 2012 2011

% Offering 20% 23% 17%

<1.0% 0% 8% 0%

1.0%–1.9% 56% 42% 52%

2.0%–2.9% 12% 23% 16%

3.0%–3.9% 12% 11% 8%

4.0%–4.9% 4% 0% 8%

5.0%–5.9% 8% 11% 4%

6.0%+ 8% 5% 12%

Dollar times service (per month) 2013 2012 2011

% Offering 7% 10% 8%

$0–$19 22% 6% 8%

$20–$39 45% 69% 67%

$40–$59 11% 19% 25%

$60+ 22% 6% 0%




Overview

Detailed findings





S7: Retiree medical




Appendix

Contact

401(k) plans


For employers offering 401(k) plans,

37% vest employer contributions immediately

Percentage of employee contribution

<1,000 employees


5,000+ employees

2013 total

No match 22% 13% 8% 16%

25% 8% 9% 8% 8%

50% 21% 24% 24% 22%

100% 16% 18% 25% 19%

Other * 33% 36% 35% 34%

0% 5% 10% 15% 20% 25% 30% 35% 40%

Immediately

1-3 years

5 years 33%

30%

37%

Current 401(k) company contribution match

For employers offering 401(k) plans, vesting in the employer contribution occurs as follows:

61% of employers have a participation rate in their 401(k) plans of over 70%

* Common other responses:

• 75% employee contribution

• Varies based on years of service

• 100% for the first 3%, then 50% for the next 2% (safe harbor design)




Overview

Detailed findings





S7: Retiree medical




Appendix

Contact

401(k) plans


0%

10%

20%

30%

40%

50%

60%

7%+6%5%4%3%2%1%0%

<1,000 employees 1,000–5,000 employees 5,000+ employees 2013 total

401(k) default employee contribution (percentage of compensation)

401(k) maximum employee contribution match (percentage of compensation)

0%

10%

20%

30%

40%

10%+10%9%8%7%6%5%< 5%None

<1,000 employees 1,000–5,000 employees 5,000+ employees 2013 total




Overview

Detailed findings





S7: Retiree medical




Appendix

Contact

401(k) plans


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

None

1.0%–4.9%

5.0%+ 11%

19%

70%

Non-elective employer contribution

0%

10%

20%

30%

40%

50%

0.80%+0.70%–0.79%

0.60%–0.69%

0.50%–0.59%

0.40%–0.49%

0.30%–0.39%

0.20%–0.29%

0.10%–0.19%

<0.10%NoneDo not know

44%

20%

11% 10%5%

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

401(k) estimated administrative fee charged per participant (percentage of account balance)




Detailed findings—Section 9: Health reform—ACA

Overview

Detailed findings





S7: Retiree medical




Appendix

Contact



Click to return to the table of contents Affordable Care Act (ACA)

Section 9: Health reform—Affordable Care Act (ACA)

Overview

Detailed findings





S7: Retiree medical




Appendix

Contact

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

Free rider $2,000 penalty per FTE

Free rider $3,000 penalty per FTE

Elimination of pre-existingconditions after 2014

Reporting on W-2 thevalue of benefits

Excise tax on high cost plans

Significant impactSlight impactNo impact

Financial impactFewer employers identified a significant financial impact of ACA provisions in 2013 than they did in 2012. Of the provisions identified, the Excise tax on high cost plans was the most prevalent financial concern cited by employers.

Compliance/administrative impactTo what degree has health reform created or is expected to create additional compliance/administrative burdens for the HR/Benefits function at your company?

0%

10%

20%

30%

40%

50%

60%

70%

Do not knowSignificantdecrease

Moderatedecrease

No effectModerateincrease

Significantincrease

2013 2012 2011

85% of employers have seen or expect additional compliance/administrative burdens from ACA




Overview

Detailed findings





S7: Retiree medical




Appendix

Contact

Part-time employees


On average, participating employers have 8% part-time employees with 54% of those being seasonal/temp employees

The percentage of employers with part-time employees not eligible for medical benefits has increased dramatically from 40% in 2012 to 56% in 2013

Are part-time employees eligible for medical benefits? 2013

No 56%

Yes, at a lower employer contribution percentage than full-time 17%

Yes, at the same employer contribution percentage as full-time 20%

Yes, at a higher employer contribution percentage than full-time 7%

Part-time employee definition based on:

40%

54%

5%

1%

Avg. hours worked

Hours scheduled

Seasonal/temp employees

Other

Work force that is part-time

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

30%+20%–29%10%–19%6%–9%3%–5%1%–2%None




Overview

Detailed findings





S7: Retiree medical




Appendix

Contact

Reactions to ACA provisions


Almost 90%

of employers are reconsidering their benefit strategy in reaction to ACA, with the same percentage increasing their wellness and health management initiatives

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

Change workforce characteristics to control the use of full-time employees

Evaluate direct contracting with providers or ACOs

Change/eliminate company subsidies for employee medical coverage

Evaluate covering employees through state-run health insurance exchange(s)

Change/eliminate company subsidies for dependent medical coverage

Evaluate covering employees through the use of private exchange

Move to a defined contribution approach to healthcare

Make changes to your company's benefits to offset costs associated with ACA

Increase your company's efforts related to wellness & health management

Re-evaluate your overall benefits strategy

Very likely Somewhat likely Unlikely

Have you done a pay-or-play analysis?

<1,000 employees


5,000+ employees

2013 total

Yes 26% 42% 62% 39%

No 36% 25% 16% 28%

No, but planning to do so 38% 33% 22% 32%

Pay-or-play analysis

84% of large employers have either already done or are planning on doing a pay-or-play analysis compared to only 64% of smaller employers




Detailed findings—Section 10: Future solutions

Overview

Detailed findings





S7: Retiree medical




Appendix

Contact



Click to return to the table of contents Future solutions under consideration by respondents

Section 10: Future solutions

Overview

Detailed findings





S7: Retiree medical




Appendix

Contact


Already implemented

Under consideration

Not under consideration

Increase medical plan employee cost sharing through plan design changes 31% 56% 13%

Decrease medical plan employee cost sharing through plan design changes 3% 15% 82%

Increase prescription drug plan cost sharing through plan design changes 18% 54% 28%

Decrease prescription drug plan cost sharing through plan design changes 1% 13% 86%

Increase employee contributions 25% 64% 11%

Decrease employee contributions 1% 15% 84%

Terminate benefits and push employees out to the exchanges 0% 26% 74%

Implement a performance based network 4% 33% 63%

Implement a value based plan design 6% 43% 51%

Implement a defined contribution plan for retiree health 5% 15% 80%

Implement a High deductible plan as a full replacement option for medical benefits 17% 44% 39%

Implement an HSA qualified High deductible plan as an additional medical plan option

37% 35% 28%

Offer a health savings account 38% 37% 25%

Offer a health reimbursement account 24% 28% 48%

Expand and improve wellness inside the United States 35% 53% 12%

Expand and improve wellness outside the United States 5% 16% 79%

Expand/offer flexible work arrangements 24% 25% 51%

Reduce/consolidate wellness programs 4% 12% 84%

Implement/expand workplace wellness 27% 56% 17%

Consolidate vendors 12% 32% 56%

Medical home 3% 14% 83%

On-site clinics 11% 17% 72%

Direct contracting 5% 19% 76%

Tuition assistance 60% 9% 31%

Transit reimbursement program 37% 6% 57%

Overview

Detailed findings

Appendix

S11: Summary of survey participants

Contact




Appendix—Section 11: Summary of survey participants



Click to return to the table of contents All participating industries

Section 11: Summary of survey participants

Overview

Detailed findings

Appendix


Contact

2013 2012 2011 2010 2009

Agribusiness * 1% - - - -

Education & Nonprofit 8% 5% 4% 3% 4%

Energy, Utilities & Mining

3% 6% 5% 5% 8%

Engineering & Construction

3% 3% 4% 2% 3%

Financial Services

Asset Management * 1% <1% - - -

Banking & Capital Markets

2% 2% 2% 3% 2%

Financial Services 7% 7% 8% 8% 7%

Insurance 6% 7% 7% 7% 5%

Investment Management (Alternative Investments)

<1% 1% 1% 1% <1%

Private Equity * <1% 0% - - -

Real Estate 1% <1% 1% 1% <1%

Government/Public Services

2% 3% 2% 3% 2%

Health Industries

Healthcare Providers 9% 8% 8% 12% 10%

Health Plans 2% 1% 2% 1% 1%

Life Sciences 1% 1% 2% 1% 1%

Other 2% 2% 1% 2% 2%

Pharmaceuticals 1% 3% 2% 3% 3%

2013 2012 2011 2010 2009

Manufacturing

Aerospace & Defense 2% 3% 1% 2% 1%

Automotive 1% 1% 1% 2% 3%

Chemicals 1% 1% 1% 3% 3%

Forest, Paper & Packaging

<1% 0% <1% 0% <1%

Manufacturing 16% 11% 12% 11% 12%

Metals <1% 0% <1% 0% 0%

Retail & Consumer

Consumer Products 1% 0% <1% 0% <1%

Food & Beverage 2% 1% 1% 1% 2%

Hospitality & Leisure 2% 1% 1% 1% <1%

Retail & Consumer 4% 3% 4% 4% 3%

Wholesale & Distribution 3% 3% 3% 1% 2%

Services

Law Firms 2% 2% 2% 2% 2%

Services 7% 4% 6% 4% 3%

Technology

Communications 1% 2% 1% 2% 2%

Entertainment & Media 2% 2% 1% 2% 2%

Technology 5% 8% 7% 7% 7%

Transportation & Logistics

2% 2% 2% 1% 2%




Click to return to the table of contents Survey participants: location and company size

Section 11: Summary of survey participants

Overview

Detailed findings

Appendix


Contact

2013 2012 2011 2010 2009

National 34% 42% 38% 52% 51%

Northeast 24% 18% 16% 14% 16%

Northwest 3% 6% 6% 4% 5%

North Central 23% 12% 16% 13% 9%

South Central 6% 6% 8% 6% 6%

Southeast 6% 9% 9% 8% 9%

Southwest 4% 7% 7% 3% 4%

Survey participants by location

2013 2012 2011 2010 2009

<500 38% 25% 24% 14% 16%

501–999 13% 11% 11% 13% 10%

1,000–1,99915%

12% 14% 14% 14%

2,000–2,4998% 8% 9% 8%

2,500–2,999

10%3,000–3,999 4% 5% 5% 6%

4,000–4,999 6% 5% 6% 6%

5,000–9,999 9% 11% 11% 13% 13%

10,000–19,999 6% 10% 10% 11% 13%

20,000+ 9% 13% 12% 15% 14%

Survey participants by company size (i.e. active employees):

Overview

Detailed findings

Appendix

Contact



This document is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

Contact

To have a deeper discussion on the findings, please contact the following. (Please note that customized, industry specific results are only available to participants of the survey.) If you wish to participate in the next Touchstone survey please contact any of the individuals listed below:

Barbara Gniewek (646) 471 8301 [email protected]

Michael Thompson (646) 471 0720 [email protected]

Kimberly Antonelli (646) 471 4273 [email protected]

Gee Pak (646) 471 3610 [email protected]

© 2013 PricewaterhouseCoopers LLP. All rights reserved. PwC refers to the United States member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. This document is for general information purposes only, and should not be used as a substitute for consultation with professional advisors. PH-13-0179

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PwC's 2013 Health and Well-being Touchstone Survey results

Business

Transcript of PwC's 2013 Health and Well-being Touchstone Survey results