Michigan employers are adjusting to rising health care costs — up an average of 7 percent this year — with spousal surcharges and lower cost plans, says a recent survey from Troy-based McGraw Wentworth.
“A few years ago, a lot of employers said they were going to drop their plans and pay the penalty (as a result of the Affordable Care Act),” says Rebecca McLaughlan, managing director of McGraw Wentworth. “But when people did the math, the economics didn’t work as well. Health care is a big reason for why people come to work in the first place.”
Similar to last year, nearly 90 percent of Michigan employers plan to offer health care coverage to full-time employees in 2015 and 2016, although the benefits might not be as extensive as they once were. According to the 11th annual Southeast Michigan Mid-Market Group Benefits Survey, 38 percent of employers, up 9 percent from the year before, now offer consumer driven health plans, which have higher deductibles and are often paired with a health savings account.
“The goal with these lower cost plans is that because employees are more involved in those up-front costs, they may be better consumers of health care,” McLaughlan says.
Similarly, 38 percent of southeast Michigan-based organizations are using spousal surcharges or excluding spouses who are eligible for coverage from other sources. In comparison, 16 percent of national employers are taking this route.
Regional employers have also expressed interest in trying new tactics, such as telemedicine, which involves the use of remote medical technologies or consultations. While only 4 percent of employers include telemedicine as a care provider option, 19 percent say they’re considering offering it in 2015. “(Grand Rapids-based) Priority Health has incorporated telemedicine into most of their products and some of the national carriers have also, so that is starting to emerge,” McLaughlan says.
Employers are also making changes for the upcoming mandate that will require companies to offer health care coverage for employees working 30 hours or more per week by 2015. The survey found that 74 percent of organizations now offer coverage to those employees, up 15 percent from 2013.
“Employers made their best effort to adapt to and comply with the shifting regulatory environment while developing their health plan strategy for 2014,” says Katy O’Brien, an account director with McGraw Wentworth and survey leader. “With more changes anticipated in the future, executive leadership will need to closely examine the compensation, cost, and culture impact of their decisions. There is no one simple answer.”
