Health Plan Design Benchmark Report represents nearly 50,000 employers and 70,000 plans nationwide

Milwaukee, WI – April 3, 2014

Backed by one of the largest database of plan designs in the U.S. (nearly 50,000 employers and 70,000 health plans), Zywave has just released its 2013 Health Plan Design Benchmark Report and accompanying drill-down tool exclusively to its client network of insurance brokers. Similar to the last few years, a main theme was the continuation of shifting costs to employees, as employers look to manage their overall health care costs. However, another theme this year involved plan design changes that seemed to match up with upcoming ACA provisions.

“The trend of employers cost-shifting to their employees is something we have seen before, but the other takeaway from our analysis this year was that employers seem to be making changes to health plan design based on provisions mandated by ACA,” says Zywave CEO Dave O’Brien. “Despite the fact that many employers renewed early at the end of 2013 to put off 2014 ACA provisions for one more year, most employers seemed to be keeping ACA developments in mind in their 2013 plan designs,” O’Brien says.

The report revealed some notable cost containment strategies that employers used to manage their health benefit costs in 2013, including the following:

• The number of plans choosing out-of-pocket maximums over $5,000 went from 20% in 2012 to 32% in 2013. One theory is that employers may see out-of-pocket maximum limits mandated by the ACA ($6,350 for individuals; $12,700 for families for 2014 the plan year) as targets, which would explain the movement toward out-of-pocket maximums over $5,000 in 2013.
• HSA plans continued to increase in 2013, growing to 28% of plans (from 21% in 2012 and 16% in 2011). Though PPO plans are still the most popular, this consistent growth in HSA plans continues to represent a common cost-control strategy for employers, as more and more companies shift to a consumer-driven model.
• Over 40% of plans provided a 100% coinsurance. Product director Michelle Jackson wonders if this is related to the ACA. “If the out-of-pocket maximum movement was due to plans simply setting it at the ACA maximum amount, then it makes sense to me that employers would set their deductible and out-of-pocket maximum at the ACA-mandated $6,350, then offer 100% coinsurance. We could just be seeing an early adoption of what may become a common plan design for 2014 plans and beyond,” said Jackson.
• The prescription drug deductible saw interesting movement from 2012 to 2013. $0 to $49 remained the most popular Rx deductible, but it went from less than 50% popularity to representing 80% of plans – a very significant increase. The increase in plans without an Rx deductible ($0) makes sense with the other trends we are seeing, as HSA plans group Rx costs in with the medical plan. In addition, small groups may have found the ACA provisions around single out-of-pocket maximum and deductible (medical and Rx applying to the same out-of-pocket deductible) advantageous and chosen to move toward it sooner – an explanation for the vast increase in $0 Rx deductibles.
• On the whole, breakdowns by region and industry remained fairly consistent with the national distribution, though there were some repeat outliers. In several measures, the Northeast region stood out as having different preferences than anywhere else in the country, while other regions were mostly similar. In terms of industry, Educational Services, Management of Companies and Enterprises, and Utilities were three industries that frequently departed from the norm with unique preferences by plan design measure.

This benchmark report breaks down data by region, industry, group size and plan type, and includes several key plan design measures. The interactive, online tool allows a Zywave broker to input their client’s plan information and demographics, and create a custom chart showing how that particular group matches up to like employers. Business owners are concerned about remaining competitive with their benefit offerings while still effectively managing their costs, and Zywave brokers now have a tool to deliver this valuable information to their clients.

“Benchmarking is invaluable for brokers,” O’Brien says. “Having a huge data set is good, but being able to drill down and figure out where your client falls is a capability that is unique. By inputting client data, a broker can see exactly how clients compare in their region, industry and group size. This is a powerful tool to use during a prospecting meeting or pre-renewal plan design analysis.”

About Zywave

Zywave is the 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 and agency automation tools. More than 2,700 brokerages worldwide, including 93 of the top 100 U.S. insurance firms use Zywave’s proven solutions to help them differentiate from competition, enhance client services, improve efficiencies and achieve organic growth. To learn more, visit www.zywave.com.