Marsh: Minimal Rise in Healthcare Costs for Employers in SE Michigan

Michigan employer healthcare costs are rising at an average of only 3 percent after plan changes, the lowest rate of change in over 10 years, according to a survey released by Marsh & McLennan Agency LLC.

Conducted annually for 12 years, the Southeast Michigan Mid-Market Group Benefits Survey benchmarks health benefits and cost trends for 2015 among 404 Southeast Michigan-based organizations with 100-10,000 employees.

Marsh & McLennan said the survey shows Southeast Michigan employers are proactively managing their healthcare costs over time.

“In addition to modifying deductibles and coinsurance, organizations are employing more creative strategies to contain their healthcare spend, including prescription drug management, telemedicine and wellness,” said Rebecca McLaughlan, vice president, Marsh & McLennan Agency, in the company’s announcement.

Survey Highlights

• 43 percent of employers offer consumer driven health plans (CDHP) as an option or the only plan choice, an increase of 13 percent over 2014.
• Average PPO plan deductibles rose from $822 in 2014 for single coverage to an average of $909 in 2015, and an average of $1,669 in 2014 to $1,863 for family coverage in 2015.
• 88 percent of HMO plans offered by employers now include coinsurance, up from 57 percent in 2014; 68 percent include a deductible, up from 59 percent in 2014.
• 51 percent of participating employers have a mandatory generic policy for prescription drug coverage, while only 33 percent of employers nationally do so.
• 35 percent of Southeast Michigan employers have a smoke-free campus versus 68 percent nationally; 8 percent require nicotine testing, compared to 17 percent nationally.
• 21 percent of employers nationally require a tobacco surcharge; only 12 percent of Michigan employers do.
• 20 percent of Southeast Michigan employers now include telemedicine as a care provider option compared to 4 percent in 2014.
• 27 percent of survey participants offer a health advocacy program, compared to 14 percent in 2014. Health advocacy programs assist employees with claims questions, coordination of care, and navigating the health care system.
• 99 percent of survey respondents intend to continue offering employer-sponsored coverage for the next two years or beyond.

The survey cites 80 top-performing organizations, both union and non-union, as TrendBenders that successfully kept their two-year average benefit cost increases at or below 1.5 percent. TrendBender organizations keep costs down by offering lower cost strategies, particularly CDHP and wellness plans, over a longer period of time. For example, 87 percent have offered a wellness plan for three years or more.

Sponsored by the Michigan office of Marsh & McLennan Agency LLC, formerly McGraw Wentworth, the Mid-Market Group Benefits Survey results are shared with participants in June.