Employers embrace new trends in health benefits provision

Most employers polled in a new survey said they'll continue offering health benefits to staff and retirees in the immediate future but will manage and deliver these benefits differently, according to human resource solutions provider Aon Hewitt.

Researchers contacted roughly 1,230 organizations providing health insurance benefits to more than 10 million people. While 95 percent of respondents said they'd keep providing health benefits to active staff in the next three to five years, many said they will abandon longstanding cost containment approaches that focus on cost sharing and vendor engagement.

"Traditional cost management tactics do not address foundational issues in healthcare, including worsening population health and misaligned provider payment methodologies," Jim Winkler, Aon Hewitt's chief innovation officer for health and benefits, said in the survey announcement. "Employers remain committed to providing health benefits, but recognize the need for new approaches that fix these problems."

Nearly 40 percent of surveyed companies expect to move toward a "house money/house rules" approach, which requires staff to manage their health actively with supporting incentives. And one-third of respondents said they'll offer group-based health benefits to employees through a private exchange in the near future. This finding reinforces prior national survey results documenting increasing employer consideration of private exchanges.

But few polled employers plan to send part-time staff to public marketplaces to buy insurance--in contrast with Target Corporation's decision to stop offering health insurance benefits to part-time staff to reduce costs and direct employees to the exchanges.

Aon Hewitt's annual survey of 424 employers covering 3.8 million retirees revealed 20 percent support moving retirees under the age of 65 into public insurance marketplaces. Few employers do so today, the survey noted. Further, the number of employers subsidizing health benefits for retirees over age 65 dropped sharply since 2004. Of employers that continue offering these benefits, many are considering providing them through individual Medicare plan markets, according to Aon Hewitt.

For more:
- read the Aon Hewitt survey announcement

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