Report: Health Insurance Premiums Stay Flat, Telemedicine Added in Face of COVID-19

While median premium changes in health insurance remained flat year-over-year, telemedicine was noted as a primary new benefit, according to a new survey conducted by the American Society of Employers in Livonia.
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Due to the COVID-19 pandemic, many health plans added telemedicine to their list of services, according to a survey by the American Society of Employers. // Stock photo

While median premium changes in health insurance remained flat year-over-year, telemedicine was noted as a primary new benefit, according to a new survey conducted by the American Society of Employers in Livonia.

The 2020 Healthcare Insurance Benefits Survey covers Michigan employers and examines the premiums, deductibles, and co-pays of employer-sponsored health plans as well as wellness benefits and cost control strategies.

The COVID-19 pandemic impacted 27 percent of participants. Median premium increases after plan changes remained flat compared to last year’s data, increasing 2.7 percent for 2019 and 3 percent for 2020 plan years. Median increases for 2021 are projected to be 5 percent.

“The pandemic has challenged employers in many ways, including health plan design and delivery,” says Mary E. Corrado, president and CEO of ASE. “Our data shows that many employers looked for ways to make health care more accessible during the pandemic. This took the form of various plan amendments or greater access to certain benefits.”

A majority of the participants – 61 percent – reported offering two to three types of health plans. The most used plan type continues to be Preferred Provider Organization Plans (PPO) with 87 percent of companies offering this option.

The three-tiered price structure (generic, preferred brand, non-preferred brand) for prescription drug plans remains the most popular among traditional PPOs with 53 percent of non-unionized organizations reporting this structure. Four-tiered price structures followed as the second most prevalent option at 24 percent, an increase of two percentage points from the previous year.

More organizations are offering wellness benefits; 46 percent of non-union organizations provided some form of a preventative intervention-type wellness program, up from 36 percent the previous year. These programs are defined as smoking cessation, stress management, and weight loss programs.

Median annual employer contributions to Health Savings Accounts remained unchanged from the last four years with an employee-only contribution totaling $500 and an employee-and-family contribution totaling $1,000 in non-unionized organizations.

The No. 1 strategy that employers planned to implement in 2020 was increasing employee education regarding health plan features and costs (9 percent). Increasing employees’ cost share (26 percent) and expanding wellness programs (24 percent) top the list of strategies that companies are considering but have yet to set a timeline for.

Participants included 174 organizations from across Michigan. Organizations with 50-499 employees nationally made up more than 52 percent of the survey sample, while organizations with more than 500 employees nationally represented nearly 32 percent of the sample. The remaining 16 percent came from organizations with fewer than 50 employees. A variety of industries were represented in the survey, with durable goods, manufacturing (37 percent) leading. Trades and services (34 percent) was the second-largest industry representation.

ASE is a nonprofit membership organization that works to strengthen its members’ human resources departments by offering member benefits and discounted services that span the employee lifecycle including recruitment, development, and retention while minimizing compliance risk.

The full report is available at no cost to ASE members and to non-members for $1,350. To obtain a copy, email surveys@aseonline.org or call (248) 223-8025.

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