For Immediate Release
June 27, 2017
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New Report Provides a First-Ever Comprehensive Look at Multiemployer Health Plans
Brookfield, Wisconsin—A new report released today, The Multiemployer Health Plan Landscape: A Ten-Year Look (2005-2014)), analyzes multiemployer health plan demographics, benefit costs, income, cash flow and asset values to provide a detailed look at how these plans have evolved over the past decade and to shed light on where they may be headed in the future.
The report, released by the International Foundation of Employee Benefit Plans and Horizon Actuarial Services, LLC, included 1,602 multiemployer health plans across the United States. These plans cover 5 million participants—a number that has remained relatively stable over the last decade, dipping to 4.6 million in 2011 and peaking at 5.3 million in 2008. The plans, as of December 2014, have a median ratio of active participants to retired participants of 4.20.
"The ten years represented in this report encapsulates major changes to the health care industry as a whole, many of which directly impact multiemployer health plans," explained Stephanie Patrick, FSA, MAAA, consulting actuary at Horizon Actuarial Services, LLC. "Legal changes like the Affordable Care Act, market adjustments including mergers and acquisitions, and high cost innovations in health products and services, including prescription drugs, have resulted in regularly increasing health care costs. Plan trustees have been required to focus on balancing cost management with protecting participants. Despite these challenges, multiemployer health plans have succeeded in improving their funding levels in recent years."
From 2005 to 2014, multiemployer health plans saw consistent increases in costs, increasing an average of 4.8% per year. In 2014, median benefits costs per participant were $10,017.
Despite rising costs, the average income of multiemployer health plans has outpaced average expenses for nine of the past 10 years due to increased contributions from employers and participants. Employer contributions over the past decade increased an average of 4.9% per year—to a median contribution of $9,843 per participant in 2014. Worker/retiree contributions increased at an almost identical pace of 5.0% per year—to a median of $448 per participant per year.
Over the last 10 years, the number of months of expenses represented by multiemployer fund assets has increased, indicating a greater ability of the plans to withstand financial uncertainties. As of 2014, 77% of plans had assets at six or more months of expenses. The median level of assets measured as months of expenses is 12.7.
"Multiemployer health plans remain an essential vehicle for providing health care coverage to individuals in the workforce who may not otherwise receive health care coverage," said Julie Stich, CEBS, associate vice president of content at the International Foundation of Employee Benefit Plans. "This new report provides a 10-year snapshot of these plans and illustrates their long-term stability and importance."
The Multiemployer Health Plan Landscape: A Ten-Year Look (2005-2014) was compiled using publicly available information from Form 5500 filings, with 2014 data being the most recent information available at time of the study. To view the full report, visit www.ifebp.org/MultiemployerHealth.
International Foundation of Employee Benefit Plans is the premier educational organization dedicated to providing the diverse employee benefits community with objective, solution-oriented education, research and information to ensure the health and financial security of plan beneficiaries worldwide. The Foundation has more than 33,000 multiemployer, corporate and public sector members, representing over 25 million lives. For additional information, visit www.ifebp.org.
Horizon Actuarial Services, LLC is a leading consulting firm specializing in providing innovative actuarial solutions to U.S. multiemployer benefit plans. Horizon Actuarial serves roughly 100 pension and welfare benefit plans from various industries, including construction, trucking, hospitality, entertainment, retail food, and communications. Horizon Actuarial helps clients address an extensive range of issues, from pension plan implementation, to health and welfare fund reserve analysis, and everything in between. With Horizon Actuarial's experience comes an understanding of the unique dynamics of multiemployer plans, keeping both labor and management well informed and well equipped to navigate the challenges facing their plans.