CHICAGO, Oct. 7 /PRNewswire-FirstCall/ -- As employees flip through their open enrollment packets, they may notice substantial changes to their medical plan for 2010, from increases to employee contributions to introducing a wellness program, according to the 2009 Benefits & Talent Survey by Aon Consulting, the human capital consulting firm of Aon Corporation (NYSE: AOC).
Aon Consulting surveyed 1,313 employers nationwide in its 2009 Benefits & Talent Survey and found that 41 percent of employers are expecting to make more substantial changes to their 2010 medical program than they did this year. Specifically, 70 percent are planning to increase employee contributions(1) and 67 percent are expecting to raise deductibles(2), co-pays(3), coinsurance(4) or out-of-pocket maximums(5).
In addition, more than half of employers are expecting to introduce or expand a wellness program next year, and 34 percent are planning to introduce or increase financial incentives for wellness programs in 2010.
"As in year's past, many employers are expecting to shift additional health care costs to employees in 2010 to share the burden of double-digit rate increases," said John Zern, U.S. Health & Benefits Practice Director with Aon Consulting. "However, it may be more dramatic next year, as many organizations try to avoid taking other drastic measures such as layoffs or salary freezes. Conversely, the good news is found in that more than half of employers are planning to either introduce or expand wellness programs, in an effort to build a healthier and more productive workforce, and ultimately lower health care costs."
To reduce employer and employee health care costs, employers have been implementing various types of audits as a short-term savings solution. According to the Benefits & Talent Survey, 46 percent of organizations conducted a dependent eligibility verification audit in 2009 or earlier, and 20 percent are planning to do so in 2010 or later. These audits are designed to save on health care costs by ensuring only eligible dependents are covered.
"Employers who conduct dependent eligibility audits can see immediate savings ranging from 3 percent to 10 percent in dependent health care costs," said Tom Lerche, U.S. Health Care Practice Leader with Aon Consulting. "Achieving savings from removal of ineligible dependents may reduce the need for further employee layoffs and will ensure program integrity," he added.
Other audits employers are planning to implement in 2010 or later include electronic prescription drug (16 percent of employers); medical claims (13 percent of employers); and prescription rebate (12 percent of employers).
Not only are employers taking advantage of short-term cost savings opportunities, they are also offering wellness and disease management initiatives to help improve the health care cost trend in the long-term. The survey found 67 percent of employers have promoted exercise/physical activity in 2009 or earlier, and another 12 percent are planning to implement this initiative in 2010 or later. Additionally, 63 percent of respondents offer disease management programs and 10 percent plan to do so in 2010 or later.
Wellness programs rely on improved health to lower costs. In order to measure progress, organizations offer employees a health risk appraisal (HRA) and biometric screenings as benchmarks. In fact, the survey found 52 percent of organizations have already offered both an HRA and biometric screenings. What's more, 20 percent are planning to implement an HRA and 16 percent are planning to implement biometric screenings as early as next year.
"Both the HRA and biometric screenings are important components of a wellness program," said Paul Berger, chief medical officer with Aon Consulting's Health & Benefits Practice. "Based on self-reported data, HRAs provide employees with personalized feedback to help meet their health goals. Biometric screenings, on the other hand, provide employers with objective data based on such tests as cholesterol and blood sugar. This gives employers a better understanding of the health risks in their employee population on an aggregated basis; as a result, they can develop the right wellness and disease management programs for their workforce."
Incentives and tracking wellness & disease management programs
The key to a successful wellness and disease management program depends on participation, and one way to motivate employees to sign-up is by offering incentives, according to Berger.
The survey found 41 percent of employers offer a gift card or merchandise as an incentive, and of those organizations that offer at least one incentive, 39 percent offer between $50 and $249 as the maximum value an employee can earn in one year.
Tracking the status of health measures also is an important component of any wellness or disease management program. According to the survey, some of those measures employers are tracking include:
"While these numbers are encouraging, the overwhelming majority of employers are still not tracking the indirect affect of chronic conditions: presenteeism(6) and absenteeism," Berger said. "Only 10 percent of employers are tracking measures of presenteeism, and only 13 percent are tracking absence costs of chronic conditions."
"Once employers know the impact chronic conditions have on their employees' productivity and absences from the workforce, they can begin to make greater improvements to their programs to lower health risk factors and build a healthier, more productive workforce," Berger added. "Done right, a wellness program will reduce medical trend, presenteeism, absences from work and the incidence and duration of disability."
About the Study
Aon Consulting surveyed more than 1,300 employers nationwide for its 2009 Benefits and Talent Survey. This annual survey provides a glimpse into the strategies and tactics companies are using to ensure that they continue to improve talent, reward success and prepare for economic recovery. It includes findings in the areas of Retirement, Health Care and Workforce Management. To learn more about this survey, please click on the following link http://insight.aon.com/?elqPURLPage=4552.
About Aon Consulting's Health & Benefits Practice
Aon Consulting's Health & Benefits Practice is a global leader, with one of the largest wholly owned networks of worldwide offices of any consulting firm. To learn more about Aon Consulting's health care reform initiatives, please visit http://www.aon.com/healthcarereform.
About Aon Consulting
Aon Consulting is among the top global human capital consulting firms, with 2008 revenues of $1.358 billion and more than 6,300 professionals in 229 offices worldwide. Aon Consulting works with organizations to improve business performance and shape the workplace of the future through employee benefits, talent management and rewards strategies and solutions. Aon Consulting was named the best employee benefit consulting firm by the readers of Business Insurance magazine in 2006, 2007 and 2008. For more information on Aon, please visit www.aon.mediaroom.com.
Aon Corporation (NYSE: AOC) is the leading global provider of risk management services, insurance and reinsurance brokerage, and human capital consulting. Through its more than 37,000 colleagues worldwide, Aon readily delivers distinctive client value via innovative and effective risk management and workforce productivity solutions. Aon's industry-leading global resources and technical expertise are delivered locally through more than 500 offices in more than 120 countries. Named the world's best broker by Euromoney magazine's 2008 and 2009 Insurance Survey, Aon also ranked highest on Business Insurance's listing of the world's largest insurance brokers based on commercial retail, wholesale, reinsurance and personal lines brokerage revenues in 2008. A.M. Best deemed Aon the number one insurance broker based on brokerage revenues in 2007 and 2008, and Aon was voted best insurance intermediary, best reinsurance intermediary and best employee benefits consulting firm in 2007 and 2008 by the readers of Business Insurance. For more information on Aon, log onto http://www.aon.com/.
(1) An employee contribution is the employee portion of the premium, which is the dollar amount taken out of the employee's paycheck each pay period to pay for health insurance.
(2) The deductible is the portion of a claim that is not covered by the health plan. It is the amount of expenses that must be paid out-of-pocket before an insurer will cover any expenses.
(3) Copay is the fixed amount the employee owes for an approved medical or prescription drug expense.
(4) Coinsurance is the percentage of the cost that the employee owes for an approved medical expense.
(5) Out-of-pocket maximum is the most an employee will pay for covered medical services during a benefit period.
(6) Presenteeism is a term used to describe employees who are working but who are not productive due to illness, stress, depression, or injury.
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SOURCE Aon Corporation
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