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Distributors' Plans for Health Insurance Benefits in 2011

Distributors' Plans for Health Insurance Benefits in 2011

October 20, 2010

The only certain thing about health care costs today is that they seem to keep going up, and insurance rates keep going up right along with them. MDM recently partnered with Robert W. Baird & Co. for the third quarter 2010 Distribution Survey, which included three questions on health care coverage and costs. Most respondents (95 percent) said they offer health insurance benefits to employees.

But the picture formed from the survey results was not very pretty. While 58 percent of respondents said they wouldn't be increasing or decreasing their contribution to employee health care costs, several asked the question: How are we going to pay for it?

Passing the increases onto employees has been a hard decision for many respondents, especially since they've been unable to give raises in the past few years. But for others, there simply isn't a choice not to pass those increases on. "We will be asking the employees to absorb the entire increase, something we have never done in the past; however, we simply no longer have the profit available to absorb any increased costs not directly related to increasing revenue," one distributor wrote.

Workers are already paying an average of 14 percent more than they were in 2009, according to the 2010 Employer Health Benefits Survey conducted by the Kaiser Family Foundation and the Health Research & Educational Trust.

And premiums for coverage have more than doubled in the past 10 years, with 3 to 5 percent of that taking place between 2009 and 2010. That number may have been higher if it weren't for changes to the plans that cover employees – a shift that is likely to continue over the next few years.

A recent Towers Watson survey on employer health care costs found that 59 percent of employers plan to "implement significant or moderate health care plan design changes in 2011." More employers are moving toward account-based plans, such as high-deductible accounts with health savings account, while other are exploring the "self-insurance" option.

Other Towers Watson survey respondents mentioned "incentives" for participating in wellness programs to prevent health problems.

And while those changes may be helping employers maintain health coverage, an air of uncertainty continues to cause concern among employers about what they will be able to offer in the future, with a large portion of that uncertainty coming from the new health care legislation recently signed into law.

More MDM/Baird survey results will appear in the Oct. 25, 2010, issue of MDM Premium.

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