Employees Step Up Use Of Health Benefits 

The recession is forcing employers to increase cost-sharing approaches as plan participants increase their use of the benefits out of fear they might lose them, a new survey finds.

While less than 4% of plan sponsors have cut or are considering cutting health care benefits altogether, many are ramping up their cost-sharing approaches, according to the study by the International Foundation of Employee Benefit Plans, Brookfield, Wisc.

IFEBP found 35% of plan sponsors are increasing employee deductibles, coinsurance or copays due to the financial crisis, while nearly the same proportion are also increasing employee premiums. Other cost-sharing actions that plan sponsors have taken include adding consumer-driven health plans as an option (13%), replacing a current plan with a consumer-driven plan (10%) and instituting spousal charges (11%).

Perhaps fearing an impending layoff, plan participants are increasing use of their benefits, the survey found. About one-third of plan sponsors reported seeing an increase in the number of participants filling prescriptions and engaging in costly medical procedures. In addition, 24% observed growth in the number of participants adding dependents to their plans. At the same time, 18% have introduced or are considering dependent eligibility audits.

About 20% of respondents reported plan participants are delaying medical care and skimping on prescription drugs because of financial problems.

The study also found 18% of the respondents have introduced or are considering introducing wellness initiatives due to the economy.

In addition, 85% believed that the financial crisis has made major federal health care reform more likely.

“The financial crisis has led some to conclude that health care and the economy are inextricably linked. You can’t separate one from the other,” said Sally Natchek, senior director of research for the foundation. “Given the burden of growing health care costs, it’s likely that health care reform will continue to be at center stage.”

The survey was conducted March 30 to April 6. Respondents included corporate plan sponsors, public and governmental plans, multiemployer benefit funds and others with benefit plans.

• • 4/20/2009 9:36:15 AM
  • Brenda
  • Seen this before
  • I have been in the insurance business over 40 years and I have seen this before. I remember sitting with my boss wondering what we would do once the Government took over healthcare, that was in the late 70's. When double digit inflation hit in the 80's everyone thought employers would not continue to sponsor plans and from that came the big rush of HMO's. In attempt to regain control insurance carriers added "managed care". Pre-certification and care coordinators were added to the mix. The same talk has been going on forever, now it is to go to "comsumer driven health care". All that does is increase the deductibles and coinsurance for employees and allow those who can afford it a second Medical IRA thru the HSA and HRA. All of these things have only stalled a real solution. For there to be a real solution providers of medical care are going to have to become more efficient and perhaps work on a lesser profit margin for a while, employees of companies are going to have to prepare themselves for those higher deductibles and expect to receive reimbursement only for catastrophic losses (like we do our car insurance) all employers are going to have to understand that assisting their employees with health care is another part of their cost of doing business and the insurance companies and administrators are going to have to work under a reasonable profit margin. There are carriers who receive huge discounts from providers because of the volume of business they have, but that discount is not passed directly to the employee or employer, it is kept in the company to be used for other reasons, such as offering extremely low rates in an area they want to buy business in while charging the employees responsible for those discounts full retail or slightly discounted. Having said all this, National Health Care would solve all of these problems, but would create a whole set of new problems. Let's solve the problems we have and continue with our free market system.

Archived Issues

• Brown Hopeful On Health Bill
• MetLife Confirms ALICO Talks
• Settlement Execs Blast ACLI Comment
• Scott Brown Is Almost Here
• ACLI Calls For Life Settlement Securitization Ban
• Obama Proposes COLI Tax
• Feds Explain How To Comply With Year-Old Law