Until recently, there wasn’t an easy way for brokers to provide detailed plan design benchmarking data. Brokers who had the time and resources were scouring surveys from various sources and then manually combining the data into a presentable format for clients.
Zywave tackled this problem a few years ago by creating an annual Health Plan Design Benchmark Report. Each year, we gather and analyze health plan data from one of the largest databases of plan designs in the United States. The results from our 2015 report are an analysis of nearly 50,000 employers and 70,000 health plans.
Certainly, a perk of creating the benchmark report in house is that it provides Zywave with an exciting opportunity to examine large-scale trends in plan design offerings around the country. But, what’s more important is why we create it for our partners. It’s because benchmarking is a great prospecting and retention tool.
The power of benchmarking
Now more than ever, as the Affordable Care Act (ACA) continues to shape the benefits market, business owners are looking for ways to manage their overall health care costs, while still remaining competitive with their benefit offerings. What’s more, employers are increasingly leaning on insurance brokers to help them strike this balance. Here’s what we learned (and what you should know) about benchmarking—straight from the mouths of more than 1,000 employers in our 2015 services survey:
- 89 percent said that it’s important that their brokers provide plan design benchmarking information.
- 25 percent said their brokers don’t provide any benchmarking information.
- 28 percent said their brokers only partially provide the benchmarking information they need.
With nearly 90 percent of employers telling us that they want their broker to provide benchmarking information, the need for this information is clear. But what about the 53 percent of employers that aren’t getting the information they think is important?
Brokers should be asking themselves these two questions:
- Is my book of business at risk because my clients are part of the 53 percent that aren’t getting what they need?
- How can I get in front of prospects that are part of that 53 percent and provide valuable benchmarking information to win new business?
It’s more important than ever to provide an amazing experience to clients and to differentiate yourself from your competition. Using benchmark reports in your next prospecting or pre-renewal meeting is a simple, yet powerful, strategy to do just that.
Highlights from our 2015 Health Plan Design Benchmark Report
A trend that continued in 2015 is that of employers shifting more costs onto employees. We know that employers are looking for strategies to reduce the costs associated with providing health insurance, and that they need to balance rising premiums and the financial impact of ACA compliance while still remaining competitive. Similar to the previous couple of years, more employers are offering plans with higher deductibles and copays and less generous coinsurance. Here are some key takeaways:
- Deductible and out-of-pocket maximums (OOPM)
For the fourth year in a row, the $2,500+ individual deductible group was the most popular, representing 46 percent of offered plans (up from the 35 percent in 2014). Within the past three years, plans with higher OOPMs have increased by almost 30 percent. Conversely, plans with lower individual OOPMs have been decreasing in popularity.
- Coinsurance
The most popular coinsurance percentage among the offered plans in 2015 was in the 80 to 89 percent range. Totaling 24 percent of the plans offered, the frequency of plans with coinsurance of less than 60 percent doubled between 2014 and 2015.
- Copayments
Consistent with the trends over the past three years, employers in 2015 showed an increased preference in plans with a higher emergency room (ER) copay. This is unsurprising, as offering a higher ER copay has become a common cost-control strategy for employers in recent years.
In 2014, the popularity of the $35+ range more than doubled to become the most commonly offered office visit copay range. This trend continued in 2015, with 40 percent of employers offering a plan with a copay of over $35 for an office visit. We believe this cost-saving trend will become even more widespread in the future.
- Prescription drug deductible
Plans with prescription drug deductibles of more than $250 soared—increasing from 17 percent in 2014 to 38 percent in 2015
Accessing the complete 2015 Health Plan Design Benchmark Report
The 2015 report is available to Zywave partners that have Broker Briefcase®, BrokerageBuilder™ or Plan Advisor. Zywave also offers an online tool that allows brokers to create custom benchmarking reports by inputting their clients’ plan information and demographics.
About Zywave
Zywave is a leading provider of software-as-a-service (SaaS) technology solutions for the insurance industry. The company’s products include Web-enabled marketing communications, business intelligence and analytics, client resource portals, and agency management tools. More than 3,000 brokerages worldwide—including 90 of the top 100 U.S. insurance firms—use Zywave’s proven solutions to differentiate themselves from the competition, enhance client services, improve efficiencies and achieve organic growth.
Dave O’Brien is the CEO of Zywave, Inc., a leading provider of software solutions for insurance brokers. He has been with Zywave since its inception in the 1990s, helping to create new technology tools that drive profitable results in a dynamic marketplace. Contact him at [email protected] or visit www.zywave.com.