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McGraw Wentworth Mid-Market Group Benefits Survey Shows Health Care Costs Increasing at 6-Year Low of 5%

TrendBenders(TM) --- top-performing organizations decreased costs by an average 1% over two years --- by managing eligibility, using spousal surcharges, and wellness initiatives including smoker surcharges.

TROY, Mich., May 18 /PRNewswire/ -- McGraw Wentworth, Michigan's largest employee group benefit brokerage/consulting firm, today released the results of its 2009 Southeast Michigan Mid-Market Group Benefits Survey. The survey compares health benefits and trends for the current year among 394 southeast Michigan-based organizations with 100-10,000 employees. Highlights of the survey results show that health care benefits costs for Michigan employers after plan design changes are increasing in 2009 at an average rate of 5%, the lowest rate of increase in the survey's 6-year history, and lower than the projected national rate of 6.4%.

Survey findings reveal that Michigan employers, whose benefits plans have been traditionally richer, are coming into closer alignment with national benchmarks by, among other things, changing PPO plan designs and moving away from 100% coverage levels in HMO plans. Findings also show: increased enrollment in consumer driven health plans (CDHPs) where employees assume greater financial and health care purchasing responsibility; an increase in spousal eligibility restrictions; tighter management of coverage-eligible individuals; and an increase in the use of smoker surcharges.

"For the first time since the survey's launch in 2004 we are seeing the rate of benefit cost increases actually slow down in Michigan," said Rebecca McLaughlan, managing director, McGraw Wentworth. "Spousal surcharges, the additional amount employees pay to carry a working spouse on a plan, and other eligibility management strategies such as dependent audits are growing in use."

The survey identifies 80 top-performing organizations called TrendBenders(TM) that have been successful in keeping their benefit cost increases even lower --- actually decreasing by an average 1% over two consecutive years. TrendBender(TM) strategies include: aggressively implementing cost-sharing and cost-saving measures such as higher employee coinsurance; eligibility management strategies including dependent audits and spousal surcharges that average higher at $134 per month; and investing in wellness initiatives.

"TrendBenders(TM) have decreased costs because they do not offer a free plan option, are more committed to CDHPs, offer and fund Health Savings Accounts, and invest in wellness," explains McLaughlan. " TrendBenders(TM) pay lower premiums and tend to have a higher rate of employees selecting consumer driven health plans."

The survey analysis also provides a Total Cost Ratio comparing what Michigan employers and employees pay in total for PPO, HMO or CDHP coverage in 2009. The Total Cost Ratio in 2009 for a median PPO Plan for an individual was $532 per month of which the employer paid 59% or $315 in premiums and the employee paid 41% or $217, a combination of payroll deduction ($98) and deductibles and co-pays ($119). In 2004, the Total Cost Ratio was $382 per month( employer paid 67%; employee paid 33%).

"Employers and employees are seeing higher dollar costs," said Karen Alter, account director with McGraw Wentworth and survey leader. "While employee cost-sharing is increasing, employers are also building in incentives to direct employees to the right place for the right care such as increasing co-pays for emergency room care to $75 versus lower co-pays of $20 to $30 for office visits."

The McGraw Wentworth Mid-Market Group Benefits Survey is the largest of its kind with 636 mid-sized employers participating including 394 southeast Michigan organizations. Respondents represent diverse industries with 30% having some unionized employees; 29% of respondents are considered auto suppliers. The survey has a 4.4% margin of error.

"With the survey data in hand, a Michigan employer will have a valuable, statistically valid tool to evaluate plan designs and cost sharing strategies for 2010 and beyond. It is particularly relevant in a challenging economic environment in which employers are trying to balance aggressive cost management with the needs of their employees," said Alter.

Survey results will be shared with participants during May and June. The survey is sponsored by McGraw Wentworth, Michigan's largest employee group benefit consulting and brokerage firms with offices in Troy and Grand Rapids. For information, contact Ryan Bowers at (248) 822-6231 or visit

SOURCE McGraw Wentworth
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