Employee Benefits Survey
Your Local Benefits Benchmark . . . for those with a Bottomline Focus



Message From An Actuary
Diane Luedtke, FSA

Nationally, the average annual health care premium for single coverage in 2008 was $4,704 and the average annual premium for family coverage was $12,680. Of that, workers contributed $721 (or 15%) annually for the cost of single coverage and $3,354 (or 26%) for the cost of family coverage.1 And, costs are expected to increase another 6% in 2009.2 While the national figures are interesting, these numbers tell you little about what is going on with your competitors - those hiring away your employees or making the sale that should be yours.

We understand that running a successful business demands that all decision-makers be empowered to control all production inputs from inventory to raw materials to wages to benefit costs. Successful businesses do not simply accept these input costs as givens. And with human capital almost always the most valuable input into any business' product, we seek to empower decision makers to make the best benefit decisions possible.



Tim Luedtke, FSA, MAAA, CFA
Principal & Consulting Actuary

Diane Luedtke, FSA
Principal & Consulting Actuary


How Competitive Is Your Benefits Package?
How do you know . . . what is your benchmark?
Diane Luedtke, FSA
Employee benefit offerings and decisions are essential for remaining competitive. The weakened economy intensifies employer struggles to maintain attractive benefits packages while managing costs. Employer health care costs continue to increase 6% annually, significantly impacting the bottom line. While benefits decisions are largely driven by an employer's own objectives, those objectives often include offering a benefits package that compares favorably to their competitors. The following highlights the leading storyline from recent national surveys, addresses the use of benchmarks as information and decision-support tools, and introduces the Navigator Benefit Solutions Employee Benefit Survey.

Top National Story - Consumerism Has Arrived

Nationally the big story is the growth of consumer-driven health plans (CDHPs). And, of course, health care costs share the spotlight. As health care costs escalate, CDHPs are becoming an increasingly popular measure to control costs.

Consumer-driven health plans link high-deductible medical plans with tax-favored accounts - either a Health Reimbursement Arrangement (HRA) or a Health Savings Account (HSA). HRAs are funded solely by the employer, while HSAs can include both employer and employee contributions. Since their introduction, CDHPs have shown steady growth in both offering rates and participation. Key findings from the Kaiser Family Foundation
1 include:

CDHP Growth Continues . . . In 2008, 13% of firms offered a CDHP, compared to 10% in 2007 and 7% in 2006. The percentage of workers enrolled in CDHPs increased from 5% in 2007 to 8% in 2008..

More Growth Expected . . . 26% of firms that do not currently offer a CDHP say they are “somewhat or very likely” to offer one in the next year.

Large Firms are Leading The Way . . . 22% of firms with 1,000 or more workers offer a CDHP; 15% with 200 to 1,000; and 13% with less than 200 workers

YET . . . Employees of Smaller Firms are More Responsive . . . 13% of workers in firms with less than 200 workers are enrolled in a CDHP, compared with 5% in firms with 200 or more.

HSA-based plans are more popular than HRA-based plans . . . among firms offering health benefits, 11% offer a CDHP with an HSA and 3% with an HRA.

The current economy is likely to accelerate the move of consumer-driven plans into the mainstream as both employers and employees are compelled to lower costs. Higher deductible plans lower premiums simply because of cost shifting. The bigger question is how much, if any, additional savings are achieved by pairing a savings option with a high-deductible plan. Ideally, changes in consumer behavior will result in lower utilization and lower trend rates, generating savings beyond the cost shift. With the proliferation of plans and emerging experience, we will be better able to measure the real savings.

What Is Happening Locally . . . Where's The Benchmark?

There are numerous national benchmarking surveys that provide useful information about the nature of group health benefits nationally. While these may provide good general information about the state of employee benefits, regional differences are diluted and results are often distorted by large employers. An employer's ideal benchmarking data would reflect groups of similar size, locale and industry since benefit trends correlate well with these factors.

Business leaders and owners know that well-informed decisions are based on facts, rather than suppositions. In such extraordinarily uncertain economic times, employers are faced with difficult choices and need to know what their local competitors are doing. Good benchmarking data supports sound decisions. Relevant data will show how a company compares to others in benefit offerings, costs, and cost-containment strategies. Benchmarks serve as a guide to companies seeking to better manage their health care costs while maintaining competitive programs.

Navigator Benefit Solutions appreciates that employee benefit offerings and costs vary significantly by geographic area and size of employer. After reviewing national surveys, we decided to dig deeper and find out what's going on in the local marketplace - the market most influencing our clients' hiring, benefit, and business decisions. We will be collecting data from local companies to establish reliable benchmarks and trends specific to the local marketplace. Our goal is to develop customized benchmarks to show how your benefit plans compare to others locally and nationally. This information will help you make better-informed benefit decisions.

The survey is on-line and participation is easy. To participate in the survey please click here. Navigator Benefit Solutions will share the survey's results with participants so that you can learn about what is happening in your local market.
1 Kaiser Family Foundation, Employer Health Benefits 2008 Annual Survey.
2 Mercer 2008 Survey of Employer-Sponsored Health Plans.


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