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Towers Watson: Employers planning only moderate changes in health care plans for 2012

August 24th, 2011  |  Connie Eyer

 Employers are planning only moderate changes in their health care plans for 2012, according to a survey of 368 midsize to large companies by Towers Watson, a global professional services company. The average reported annual cost of medical and pharmacy coverage is $11,204 per employee for active coverage.

“With so much still unknown regarding both the short- and long-term impact of health care reform, most employers will not make wholesale changes to employer-sponsored health plans in 2012,” said Ron Fontanetta, senior health care consulting leader at Towers Watson. “However, a small group of employers is driving more fundamental change in 2012 by using account-based platform designs, aggressively positioning incentives and rethinking subsidization levels.”

The survey also found that while employer health care costs will rise at a noticeably lower rate during 2012 compared with 2011 (5.9% versus 7.6%, respectively), the vast majority of employers (88%) are planning to take steps to control their costs and avoid the impact of health care reform’s excise tax. Roughly half (45%) will rethink their long-term health care strategy during 2012, and many are uncertain how they will respond to the looming impact of state-based insurance exchanges in 2014.

Specifically, between now and 2014, employers are planning or considering the following actions:

  • Increase offering of account-based health plans (ABHP) (17% intend to add this plan design in 2013 or 2014, which would result in nearly three in four [74%] employers offering an ABHP)
  • Use value-based benefit designs (49%)
  • Increase use of preferred networks (58%)

 “It is clear from our research that employers remain committed to providing employer-sponsored benefits for the foreseeable future,” said Randall Abbott, senior health care consulting leader at Towers Watson. “2012 will ultimately be a defining year— the year some employers head down a path of bold and decisive actions, while others will wait and see. Whether choosing to pay or play, employers will need a strategic view for the future.”