42.8% of Corporations Offer Some Type of Consumer-Driven Health Care Option

October 29, 2007

Contact:
Brenda Rood
262-373-7756
brendar@ifebp.org

42.8% of Corporations Offer Some Type of Consumer-Driven Health Care Option

The survey found that 42.8% of corporations offer some type of consumer-driven health care option, the most common of which is a high-deductible plan with a health savings account (HSA), offered by 22.7%. Other common offerings include a high-deductible plan with a health reimbursement arrangement (HRA), offered by 11.5%, followed by a high-deductible plan without an account, offered by 8.6%.

As expected, corporations are more likely to offer a consumer-driven health care option than other employment sectors. When looking at all U.S. employers, including public employers and multiemployer plans, 35.7% offer some type of consumer-driven health plan.

“Organizations in all employment sectors are searching for effective ways to contain health care and prescription drug costs,” said Julie Stich, Senior Information/Research Specialist at the International Foundation. “We found that, across the board, organizations are using cost-sharing provisions, case and disease management, and mail-order drug service. Some employers are also using less traditional methods like on-site clinics, health quality initiatives, spousal surcharges and carve-outs, and opt-out incentives.”

The survey found that mail-order drug programs are the most common prescription drug cost-management technique, with 86.1% of U.S. organizations choosing to offer mail-order service. Other popular options include drug formularies, three or more cost-sharing tiers, pharmacy benefit managers, and mandating or promoting generic drug use.

In addition to health care benefits, the survey also looked at pension and retirement benefits, along with numerous other benefits.

Other key findings from corporate respondents include:

• 27.9% of corporations have a cash balance pension plan compared to just 16.7% of overall U.S. respondents.
  
• Adoption benefits are most common in the corporate sector, with 61% of corporations offering some type of adoption assistance. Of the organizations surveyed, 24.3% offer financial assistance and 26.7% offer paid leave.
  
• Flexible benefit arrangements are also most common in the corporate sector, with 95.5% of corporations offering some type of flexible benefit arrangement. The most common offering is a health flexible spending account, with 73.1% or organizations providing this benefit offering.

Employee Benefits Survey: U.S. and Canada 2007 looks at the prevalence and design features of defined benefit (DB) and defined contribution (DC) pension plans, health care, dental and prescription drug benefits, life insurance, voluntary benefits, adoption benefits, holiday benefits, sick leave, and short- and long-term disability. The survey data covers four employment sectors: corporations, professional service firms, public employers and multiemployer benefit plans in both the United States and Canada.

“The survey provides an unbiased and comprehensive look at the benefits landscape in not only corporate organizations, but also multiemployer and public employer plans,” said Mauro Canori, Director of Human Resources for Merck & Co.

Some key findings from all U.S. respondents, including corporate, public employer plans, professional service providers and multiemployer (Taft-Hartley) plans include:

• About 50% of respondents estimate their benefit costs as a percentage of payroll to be 31% or more.
  
• Of the organizations surveyed, 75.7% offer at least one DC pension plan. By far, the most commonly offered is a 401(k) plan, with 78.3% of U.S. respondents offering this type of plan. Of the organizations offering DC pension plans, nearly 80% match their employees’ contributions.
  
• More than 91% of respondents offer dental benefits. The most commonly provided plan is a dental preferred provider organization (PPO).

More than 1,200 respondents from across the United States and Canada participated in the survey. It includes summaries, charts and comparison tables.

To purchase Employee Benefits Survey: U.S. and Canada 2007, visit www.ifebp.org/books.asp?6368, or contact the Publications Department at (888) 334-3327, option 4, or bookstore@ifebp.org. The book is 100 pages and costs $120 (I.F. Members $80) plus shipping and handling. It is available in print, CD-ROM and e-book formats.

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The International Foundation of Employee Benefit Plans is a nonprofit educational association serving the employee benefits and compensation industry. Total membership includes more than 35,000 individuals representing over 8,300 trust funds, corporations, public employee groups and professional advisory firms in the United States and Canada.