2017 Employer Health Benefits Survey

This annual survey of employers provides a detailed look at trends in employer-sponsored health coverage.

E mplo y er H $6,690 ealth B 53% enefits THE KAISER FAMILY FOUNDATION AND - - HEALTH RESEARCH & 2017 EDUCATIONAL TRUST ANNU Employer AL SUR Health -and-VE Y Benefits The Henry J. Kaiser Family FoundationHealth Research & Educational Trust THE Headquarters 155 North Wacker K 2017 2400 Sand Hill RoadSuite 400 AISER Annual Survey Menlo Park, CA 94025Chicago, IL 60606 F A Phone 650-854-9400Phone 312-422-2600 Fax 312-422-4568MIL Y FOUND Washington Offices andwww.hret.org Barbara Jordan Conference Center A 1330 G Street, NWTION Washington, DC 20005 -AND- Phone 202-347-5270 www.kff.orgHEAL TH RESEAR CH & EDUC A This publication (#9060 is available on the Kaiser Family Foundation’s website at www.kff.org. TIONAL$18,764-and- 2017 TRUST September 2017

Primary Authors: KAISER FAMILY FOUNDATION Gary Claxton Matthew Rae Michelle Long Anthony Damico HEALTH RESEARCH & EDUCATIONAL TRUST Gregory Foster NORC AT THE UNIVERSITY OF CHICAGO Heidi Whitmore Filling the need for trusted information on national health issues, the Kaiser Family Foundation is a nonprofit organization based in Menlo Park, California. Founded in 1944, the Health Research & Educational Trust (HRET) is the not-for-profit research and education affiliate of the American Hospital Association (AHA). HRET’s mission is to transform health care through research and education. HRET’s applied research seeks to create new knowledge, tools and assistance in improving the delivery of health care by providers and practitioners within the communities they serve. NORC at the University of Chicago is an independent research organization headquartered in downtown Chicago with additional offices on the University of Chicago's campus and in the D.C. Metro area. NORC also supports a nationwide field staff as well as international research operations. With clients throughout the world, NORC collaborates with government agencies, foundations, educational institutions, nonprofit organizations, and businesses to provide data and analysis that support informed decision making in key areas including health, education, economics, crime, justice, energy, security, and the environment. NORC’s 75 years of leadership and experience in data collection, analysis, and dissemination—coupled with deep subject matter expertise—provides the foundation for effective solutions. Copyright © 2017 Henry J. Kaiser Family Foundation, Menlo Park, California, and Health Research & Educational Trust, Chicago, Illinois. All rights reserved. Printed in the United States of America.

ABSTRACT Abstract This annualsurveyofemployersprovidesadetailedlookattrendsinemployer-sponsoredhealthcoverageincluding premiums,employeecontributions,cost-sharingprovisions,andemployerpractices. The2017surveyincludedmorethan 2,100interviewswithnon-federalpublicandprivateﬁrms. Annualpremiumsforemployer-sponsoredfamilyhealthcoveragereached$18,764thisyear,up3%fromlastyear,withworkers onaveragepaying$5,714towardsthecostoftheircoverage,accordingtotheKaiserFamilyFoundation/HealthResearch& EducationTrust2017EmployerHealthBeneﬁtsSurvey. The2017surveyincludesinformationontheuseofincentivesfor employerwellnessprograms,plancostsharing,andﬁrmoﬀerrates. Surveyresultsarereleasedinavarietyofways,includinga full report with downloadabletablesonavarietyoftopics,summaryofﬁndings,andanarticlepublishedinthejournalHealth Aﬀairs. The Kaiser Family Foundation and Health Research & Educational Trust / Page 3

SUMMARYOFFINDINGS SummaryofFindings Employer-sponsoredinsurancecoversoverhalfofthenon-elderlypopulation;approximately151millionnonelderlypeoplein 1 total. To providecurrentinformationaboutemployer-sponsoredhealthbeneﬁts,theKaiserFamilyFoundation(Kaiser)and theHealthResearch&EducationalTrust(HRET)conductanannualsurveyofprivateandnonfederalpublicemployerswith threeormoreworkers. ThisisthenineteenthKaiser/HRETsurveyandreﬂectsemployer-sponsoredhealthbeneﬁtsin2017. HEALTHINSURANCEPREMIUMSANDWORKERCONTRIBUTIONS In 2017, the average annualpremiumsforemployer-sponsoredhealthinsuranceare$6,690forsinglecoverageand$18,764for familycoverage[FigureA].Theaveragesinglepremiumincreased4%andtheaveragefamilypremiumincreased3%in2017. 2 Workers’wagesincreased2.3%andinﬂationincreased2.2%overthelastyear. Theaveragepremiumforfamilycoverage is lower for covered workers in small ﬁrms (3-199 workers) than for workers in large ﬁrms (200 or more workers) ($17,615 vs. $19,235). Premiumsforfamilycoveragehaveincreased19%since2012and55%since2007[FigureB].Averagepremiumsfor high-deductiblehealthplanswithasavingsoption(HDHP/SOs)areconsiderablylowerthantheoverallaverageforallplan typesforbothsingleandfamilycoverage,at$6,024and$17,581,respectively[FigureA].Thesepremiumsdonotincludeany ﬁrmcontributionstoworkers’healthsavingsaccountsorhealthreimbursementarrangements. Premiumsvarysigniﬁcantlyaroundtheaveragesforbothsingleandfamilycoverage,reﬂectingdiﬀerencesinhealthcarecosts andcompensationdecisionsacrossregionsandindustries. Seventeenpercentofcoveredworkersareinplanswithanannual total premiumforfamilycoverageofatleast$22,517(120%ormoreoftheaveragefamilypremium),and21%ofcovered workersareinplanswherethefamilypremiumislessthan$15,011(lessthan80%oftheaveragefamilypremium). Mostcoveredworkersmakeacontributiontowardthecostofthepremiumfortheircoverage. Onaverage,coveredworkers contribute18%ofthepremiumforsinglecoverageand31%ofthepremiumforfamilycoverage. Workersinsmallﬁrms contributeahigheraveragepercentageofthepremiumforfamilycoveragethanworkersinlargeﬁrms(39%vs.28%). Coveredworkersinﬁrmswitharelativelyhighpercentageoflower-wageworkers(atleast35%ofworkersearn$24,000ayear orless) contribute higher percentagesofthepremiumforsingle(23%)andfamily(37%)coveragethanworkersinﬁrmswitha 3 smallershareoflower-wageworkers(18%and31%,respectively). Aswithtotalpremiums,theshareofthepremiumcontributedbyworkersvariesconsiderably. Forsinglecoverage,14%of coveredworkersareinplansthatdonotrequirethemtomakeacontribution,60%areinplansthatrequireacontributionof 25%orlessofthetotalpremium,and2%areinplansthatrequireacontributionofmorethanhalfofthepremium. Forfamily coverage,3%ofcoveredworkersareinplansthatdonotrequirethemtomakeacontribution,44%areinaplanthatrequires acontributionof25%orlessofthetotalpremium,and16%areinplansthatrequiremorethanhalfofthepremium. Covered workersinsmallﬁrmsaremorelikelythancoveredworkersinlargeﬁrmstobeinaplanthatrequirestheworkertocontribute morethan50%ofthetotalfamilypremium(36%vs.8%). 1 Kaiser CommissiononMedicaidandtheUninsured. Theuninsured: Aprimer—Keyfactsabouthealthinsuranceandtheuninsuredintheeraof healthreform: SupplementalTables[Internet]. Washington(DC):TheCommission;2016Nov[cited2017Aug1]. http://files.kff.org/attachment/ Supplemental-Tables-The-Uninsured-A%20Primer-Key-Facts-about-Health-Insurance-and-the-Unisured-in-America-in-the-Era-of-Health-Reform. See Table1: 271.3millionnonelderlypeople,55.8%ofwhomarecoveredbyemployer-sponsoredinsurance. 2 Kaiser/HRETsurveysusetheApril-to-Apriltimeperiod,asdothesourcesinthisandthefollowingnote. Theinﬂationnumbersarenotseasonally adjusted. BureauofLaborStatistics. ConsumerPriceIndex-AllUrbanConsumers: DepartmentofLabor;2017. [cited2017July21]https: //data.bls.gov/timeseries/CUUR0000SA0?output_view=pct_1mth. WagedataarefromtheBureauofLaborStatisticsandbasedonthechangeintotal averagehourlyearningsofproductionandnonsupervisoryemployees. Employment,hours,andearningsfromtheCurrentEmploymentStatisticssurvey: DepartmentofLabor;2017[cited2017July21]. http://data.bls.gov/timeseries/CES0500000008 3 This threshold is based on the twenty-ﬁfth percentile of workers’ earnings as reported by the Bureau of Labor Statistics, using data for 2016. Bureau of Labor Statistics. May 2016 national occupational employmentandwageestimates: UnitedStates[Internet]. Washington(DC):BLS;[lastmodiﬁed2017Mar310; cited 2017Aug15]. Availablefrom: http://www.bls.gov/oes/current/oes_nat.htm The Kaiser Family Foundation and Health Research & Educational Trust / Page 4

SUMMARYOFFINDINGS Withregardtodollaramounts,theaverageannualpremiumcontributionsbycoveredworkersfor2017are$1,213forsingle coverageand$5,714forfamilycoverage. Eightpercentofcoveredworkerscontribute$12,000ormoreayearforfamily coverage[FigureC].AveragecontributionamountsforcoveredworkersinHDHP/SOsarelowerforsingleandfamilycoverage thanforcoveredworkersinotherplantypes[FigureA].Coveredworkers’averagedollarcontributiontofamilycoveragehas increased74%since2007and32%since2012FigureB].Coveredworkersinsmallﬁrmshaveloweraveragecontributionsfor single coveragethanworkersinlargeﬁrms($1,030vs. $1,289),buthigheraveragecontributionsforfamilycoverage($6,814vs. $5,264). Onereasonforthisvariationindollaramountsisthediﬀerentapproachesthatemployersusetostructureemployee contributions, particularly for family coverage. Of ﬁrms that oﬀer family coverage, 45% of small ﬁrms and 15% of large ﬁrms providethesamedollarcontributionforsingleandfamilycoverage,whichmeansthatworkersmustpaythefulladditional premiumcosttoenrollfamilymembersintheirplan. Forty-ﬁvepercentofsmallﬁrmsand75%oflargeﬁrmsmakeahigherdollar contributionforfamilycoveragethanforsinglecoverage;1%ofsmallﬁrmsand4%oflargeﬁrmsvarytheirapproachwiththeclass of the employee;andtheremaining9%ofsmallﬁrmsand6%oflargeﬁrmstakesomeotherapproach. Sixteenpercentofcovered workersareinaplanthatrequiresworkerswhousetobaccotocontributemoretowardthepremium. The Kaiser Family Foundation and Health Research & Educational Trust / Page 5

SUMMARYOFFINDINGS The Kaiser Family Foundation and Health Research & Educational Trust / Page 6

SUMMARYOFFINDINGS PLANENROLLMENT PPOscontinuetobethemostcommonplantypein2017,enrolling48%ofcoveredworkers. Twenty-eightpercentofcovered workersareenrolledinahigh-deductibleplanwithasavingsoption(HDHP/SO),14%inanHMO,10%inaPOSplan,and <1%inaconventional(alsoknownasanindemnity)plan[FigureD].Overthelastﬁveyears,enrollmentinPPOshasfallen by8percentagepointswhileenrollmentinHDHP/SOshasincreasedby9percentagepoints. Sixpercentofﬁrmsoﬀeringan HDHP/SOoﬀeronlyanHDHP/SOtoatleastsomeoftheirworkers. Self-Funding. Fifteenpercentofcoveredworkersinsmallﬁrmsand79%inlargeﬁrmsareenrolledinplansthatareeither partially or completely self-funded, similar to last year. Although there has been discussion of more insurers oﬀering partially self-fundedplans(sometimescalledlevel-premiumplans)tosmalleremployers,wehavenotseenanincreaseinrespondents reportingthattheyhaveself-fundedplansinrecentyears. AssociationHealthPlans. Sixpercentofoﬀeringﬁrmswithfewerthan250workersoﬀerhealthbeneﬁtsarrangedthrougha tradeorprofessionalassociation. EMPLOYEECOSTSHARING Mostcoveredworkersmustpayashareofthecostwhentheyusehealthcareservices. Eighty-onepercentofcoveredworkers haveageneralannualdeductibleforsinglecoveragethatmustbemetbeforemostservicesarepaidforbytheplan[Figure E]. Even workers withoutageneralannualdeductibleoftenfaceothertypesofcostsharingwhentheyuseservices,suchas copaymentsorcoinsuranceforoﬃcevisitsandhospitalizations. Amongcoveredworkerswithageneralannualdeductible,theaveragedeductibleamountforsinglecoverageis$1,505, similar to the average deductible last year ($1,478). The average deductible for covered workers is higher in small ﬁrms than in large ﬁrms($2,120vs. $1,276). Amongallcoveredworkers,includingboththosewithandwithoutadeductible,theaverage The Kaiser Family Foundation and Health Research & Educational Trust / Page 7

SUMMARYOFFINDINGS deductibleis$1,221. Fifty-eightpercentofcoveredworkersinsmallﬁrmsand48%ofcoveredworkersinlargeﬁrmsarein aplanwithadeductibleofatleast$1,000forsinglecoverage,similartothepercentageslastyear. Overthelastﬁveyears, however,thepercentageofcoveredworkerswithageneralannualdeductibleof$1,000ormoreforsinglecoveragehasgrown substantially, increasing from 34% in 2012 to 51% in 2017 [Figure E]. Thirty-seven percent of covered workers in small ﬁrms are in a plan with a deductible of at least $2,000, compared to 15% for covered workers in large ﬁrms. Deductibleshaveincreasedinrecentyearsduetohigherdeductibleamountswithinplantypesandtohigherenrollmentin HDHP/SOs. WhilegrowingdeductiblesinPPOsandotherplantypesgenerallyincreaseenrolleeout-of-pocketliability,theshift in enrollmenttoHDHP/SOsdoesnotnecessarilydosobecausemostHDHP/SOenrolleesreceiveanaccountcontributionfrom their employers. Twenty-onepercentofcoveredworkersinanHDHPwithaHealthReimbursementArrangement(HRA)and2% of coveredworkersinaHealthSavingsAccount(HSA)-qualiﬁedHDHPreceiveanaccountcontributionforsinglecoverageat least equal to their deductible, while another 35% of covered workers in an HDHP with an HRAand30%ofcoveredworkersin anHSA-qualiﬁedHDHPreceiveaccountcontributionsthat,ifappliedtotheirdeductible,wouldreducetheircostsharingto less than $1,000. Whethertheyfaceageneralannualdeductibleornot,alargeshareofcoveredworkersalsopayaportionofthecostwhen theyvisit an in-networkphysician. Forprimarycare,71%ofcoveredworkershaveacopayment(aﬁxeddollaramount) whentheyvisitadoctorand22%havecoinsurance(apercentageofthecoveredamount). Forspecialtycare,67%facea copaymentand26%facecoinsurance. Theaveragecopaymentsare$25forprimarycareand$38forspecialtycare. The averagecoinsuranceis19%forprimaryand19%forspecialtycare. Theseamountsaresimilartothosein2016. Mostworkersalsofaceadditionalcostsharingforanemergencyroomvisit,hospitaladmission,oroutpatientsurgery. Afterany generalannualdeductibleismet,32%ofcoveredworkershaveacoinsuranceand58%haveacopaymentforanemergency roomvisit,and64%ofcoveredworkershaveacoinsuranceand12%haveacopaymentforhospitaladmissions. Theaverage coinsurancerateforhospitaladmissionsis19%andtheaveragecopaymentis$336perhospitaladmission. Thecostsharing provisionsforoutpatientsurgeryfollowasimilarpatterntothoseforhospitaladmissions. Whilealmostall(98%)coveredworkersareinplanswithalimitonin-networkcostsharing(calledanout-of-pocketmaximum) for single coverage, there is considerable variation in the actual dollar limits [Figure F]. Fifty-seven percent of these workers areinaplanwithanannualout-of-pocketmaximumforsinglecoverageofmorethan$3,000,while18%areinaplanwithan out-of-pocketmaximumof$6,000ormore. The Kaiser Family Foundation and Health Research & Educational Trust / Page 8

SUMMARYOFFINDINGS The Kaiser Family Foundation and Health Research & Educational Trust / Page 9

SUMMARYOFFINDINGS AVAILABILITYOFEMPLOYER-SPONSOREDCOVERAGE Fifty-three percent of ﬁrms oﬀer health beneﬁts to at least some of their workers, similar to the percentage last year [Figure G]. Eighty-ninepercentofworkersareinaﬁrmthatoﬀershealthbeneﬁtstoatleastsomeofitsworkers. Overthepastdecade,the percentageofworkersatsmallﬁrmsthatoﬀerhealthbeneﬁtstoatleastsomeworkershasdecreased(78%vs73%). Thelikelihoodofoﬀeringhealthbeneﬁtsdiﬀerssigniﬁcantlybyﬁrmsize,withonly40%ofﬁrmswith3to9workersoﬀering coveragewhilevirtuallyallﬁrmswith1,000ormoreworkersoﬀercoverage. Eveninﬁrmsthatoﬀerhealthbeneﬁts,someworkersarenoteligibletoenroll(e.g.,waitingperiodsorpart-timeortemporary workstatus)andotherswhoareeligiblechoosenottoenroll(e.g.,theyfeelthecoverageistooexpensiveortheyarecovered throughanothersource). Inﬁrmsthatoﬀercoverage,79%ofworkersareeligibleforthehealthbeneﬁtsoﬀered,andofthose eligible, 78% take up the ﬁrm’s oﬀer, resulting in 62% of workers in oﬀering ﬁrms enrolling in coverage through their employer. All of these percentages are similar to 2016. Lookingacrossworkersbothinﬁrmsthatoﬀerandthosethatdonotoﬀerhealthbeneﬁts,55%ofworkersarecoveredby healthplansoﬀeredbytheiremployer. CoverageforFamilymembers. Amongﬁrmsoﬀeringhealthbeneﬁts,virtuallyalllargeﬁrmsand94%ofsmallﬁrmsoﬀer coveragetospousesofeligibleworkers. Similarly,virtuallyalllargeﬁrmsand92%ofsmallﬁrmsoﬀeringhealthbeneﬁtsoﬀer coveragetootherdependentsoftheireligibleworkers,suchaschildren. RETIREECOVERAGE Ofthelargeﬁrmsoﬀeringhealthbeneﬁtstoworkersin2017,25%alsooﬀerhealthbeneﬁtstoretirees,similartothe percentagein2016(24%). Amonglargeﬁrmsthatoﬀerretireehealthbeneﬁts,95%oﬀerhealthbeneﬁtstoearlyretirees (workersretiringbeforeage65)and66%oﬀerhealthbeneﬁtstoMedicare-ageretirees. Twenty-sixpercentoflargeﬁrms The Kaiser Family Foundation and Health Research & Educational Trust / Page 10

SUMMARYOFFINDINGS oﬀeringretireebeneﬁtscontributetobeneﬁtsthroughacontractwithaMedicareAdvantageplan. Twelvepercentoflarge ﬁrmsoﬀeringretireebeneﬁtsoﬀerretireebeneﬁtsthroughacorporateorprivateexchange. SUPPLEMENTALANDVOLUNTARYBENEFITS Firmsoﬀeringhealthbeneﬁtsalsooﬀeravarietyofsupplementalandotherhealthbeneﬁtstotheirworkers. Amongﬁrms oﬀeringhealthbeneﬁts,67%ofsmallﬁrmsand97%oflargeﬁrmsoﬀerdentalbeneﬁtstotheirworkers;47%ofsmallﬁrmsand 82%oflargeﬁrmsoﬀervisionbeneﬁts;23%ofsmallﬁrmsand46%oflargeﬁrmsoﬀercriticalillnessinsurance;16%ofsmall ﬁrmsand28%oflargeﬁrmsoﬀerhospitalindemnityinsurance;and16%ofsmallﬁrmsand25%oflargeﬁrmsoﬀerlong-term careinsurance. Amongallﬁrmsoﬀeringthesesupplementalbeneﬁts,ﬁrmsaremorelikelytomakeacontributiontoward dentalcoverage(67%)orvisioncoverage(54%)thanforcriticalillnessinsurance(3%)orhospitalindemnityinsurance(5%). WELLNESS,HEALTHRISKASSESSMENTSANDBIOMETRICSCREENINGS Alargeshareofﬁrmshaveprogramsthatencourageworkerstoidentifyhealthissuesandtotakestepstoimprovetheirhealth. Manyﬁrmsoﬀerhealthscreeningprogramsincludinghealthriskassessments,whicharequestionnairesaskingworkersabout lifestyle, stress or physical health, and in-person examinations such as biometric screenings. Many ﬁrms also use incentives toencourageworkerstocompleteassessments,participateinwellnessprograms,ormeetbiometricoutcomes. Aswehave seeninpreviousyears,thereisconsiderableuncertaintyamongsmallﬁrmsonsomequestions,particularlythoserelatedto incentives, so ﬁndings are reported only for large ﬁrms in some instances. HealthRiskAssessments. Amongﬁrmsoﬀeringhealthbeneﬁts,38%ofsmallﬁrmsand62%oflargeﬁrmsprovideworkers anopportunitytocompleteahealthriskassessment. Ahealthriskassessmentincludesquestionsaboutaperson’smedical history, health status, and lifestyle. Fifty-two percent of large ﬁrms with a health risk assessment program oﬀer an incentive toencourageworkerstocompletetheassessment. Amonglargeﬁrmswithanincentive,theincentivesinclude: giftcards, merchandiseorsimilarincentives(50%ofﬁrms);requiringacompletedhealthriskassessmenttobeeligibleforotherwellness incentives (46%ofﬁrms);lowerpremiumcontributionsorcostsharing(46%ofﬁrms);andﬁnancialrewardssuchascash, contributionstohealth-relatedsavingsaccounts,oravoidingapayrollfee(40%ofﬁrms). BiometricScreenings. Twenty-onepercentofsmallﬁrmsand52%oflargeﬁrmsoﬀeringhealthbeneﬁtsoﬀerworkersthe opportunitytocompleteabiometricscreening. Abiometricscreeningisahealthexaminationthatmeasuresaperson’srisk factors such as body weight, cholesterol, blood pressure, stress, and nutrition. Fifty-three percent of large ﬁrms with biometric screeningprogramsoﬀerworkersanincentivetocompletethescreening. Amonglargeﬁrmswithanincentive,theincentives include: lowerpremiumcontributionsorcostsharing(49%ofﬁrms);giftcards,merchandiseorsimilarincentives(44%ofﬁrms); requiringacompletedbiometricscreeningtobeeligibleforotherwellnessincentives(41%ofﬁrms);andﬁnancialrewards suchascash,contributionstohealth-relatedsavingsaccounts,oravoidingapayrollfee(33%ofﬁrms). Inaddition,14%oflarge ﬁrmswithabiometricscreeningprogramhaveincentivestiedtowhetherworkersmetspeciﬁedbiometricoutcomes,suchasa targetedbodymassindex(BMI)orcholesterollevel. HealthandWellnessPromotionPrograms. Manyﬁrmsoﬀerprogramstohelpworkersidentifyhealthrisksandunhealthy behaviorsandimprovetheirlifestyles. Fifty-eightpercentofsmallﬁrmsand85%oflargeﬁrmsoﬀeraprograminatleastone of these areas: smokingcessation;weightmanagement;behavioralorlifestylecoaching. Thirty-twopercentoflargeﬁrmswith oneofthesehealthandwellnessprogramsoﬀerworkersanincentivetoparticipateinorcompletetheprogram. Amonglarge ﬁrmswithanincentiveforcompletingwellnessprograms,incentivesinclude: giftcards,merchandiseorsimilarincentives (68%ofﬁrms);requiringcompletionofactivitiestobeeligibleforotherwellnessincentives(44%ofﬁrms);ﬁnancialrewards suchascash,contributionstohealth-relatedsavingsaccounts,oravoidingapayrollfee(37%ofﬁrms);andlowerpremium contributionsorcostsharing(19%ofﬁrms). Eightpercentofsmallﬁrmsand14%oflargeﬁrmsreportcollectinghealthinformationfromworkersthroughwearabledevices suchasaFitbitorAppleWatch. Asriskassessmentsandwellnessprogramshavebecomemorecomplex,incentivesandrewardshavebecomemore sophisticatedandmayinvolveparticipatinginormeetinggoalsindiﬀerentprograms(e.g.,completinganassessmentand The Kaiser Family Foundation and Health Research & Educational Trust / Page 11

SUMMARYOFFINDINGS participating in a health promotion activity). To better understand the combined incentives or penalties facing program participants, we asked large ﬁrms that had any incentives for health risk assessments, biometric screenings, or the speciﬁed healthandwellnesspromotionprogramswhatthemaximumincentivewasforaworkerforalloftheirprogramscombined. Amonglargeﬁrmswithanytypeofincentive,25%haveamaximumincentiveof150orless;33%haveamaximumincentive between$151and$500;23%haveamaximumincentivebetween$501and$1,000;13%haveamaximumincentivebetween $1,001and$2,000;and6%haveamaximumincentiveofmorethan$2,000[FigureH]. SITESOFCARE Telemedicine. Sixty-threepercentoflargeﬁrmsthatoﬀerhealthbeneﬁtscovertheprovisionofhealthcareservicesthrough telecommunicationintheirlargesthealthplan[FigureI].Amongtheseﬁrms,33%reportedthatworkershaveaﬁnancial incentivetoreceiveservicesthroughtelemedicineinsteadofvisitingaphysician’soﬃce. RetailHealthClinics. Seventy-threepercentoflargeﬁrmscoverservicesoﬀeringhealthbeneﬁtsprovidedinretailhealth clinics, such as those found in pharmacies and supermarkets, in their largest health plan [Figure I]. Among these ﬁrms, 17% reportedthatworkershaveaﬁnancialincentivetoreceiveservicesinaretailclinicinsteadofvisitingatraditionalphysician’s oﬃce. NurseHotline. Seventy-ninepercentoflargeﬁrmsoﬀeringhealthbeneﬁtshaveanursehotlineaspartoftheirlargesthealth plan[FigureI]. PROVIDERNETWORKS HighPerformanceorTieredNetworks. Fifteenpercentoflargeﬁrmsoﬀeringhealthbeneﬁtshavehighperformanceor tiered networksintheirlargesthealthplan,similartothepercentagereportedlastyear[FigureI].Theseprogramsidentify The Kaiser Family Foundation and Health Research & Educational Trust / Page 12

SUMMARYOFFINDINGS providersthataremoreeﬃcientandgenerallyprovideﬁnancialorotherincentivesforenrolleestousetheselectedproviders. NarrowNetworks. Ninepercentoflargeﬁrmsoﬀeringhealthbeneﬁtsoﬀerahealthplanthattheyconsidertohaveanarrow network(i.e., a network they wouldconsidermorerestrictivethanastandardHMOnetwork),similartothepercentage reportedlastyear[FigureI]. EliminatedHospitalsorHealthSystems. Only3%oflargeﬁrmsreportthattheyortheirhealthplaneliminatedahospitalor healthsysteminthepastyearinordertoreducethecostsoftheirplan,similartothepercentagereportedlastyear[FigureI]. PrivateExchanges. Fourpercentofﬁrmsoﬀeringhealthbeneﬁtswithatleast50workersoﬀerhealthbeneﬁtsthrougha private exchange. Amongﬁrmsoﬀeringhealthbeneﬁtsthatdonotcurrentlyoﬀerthroughaprivateexchange,10%withat least 50 workers, including 22% with at least 5,000 workers, say they have considered oﬀering coverage through a private exchange. CONCLUSION Themarketforemployer-sponsoredhealthbeneﬁtscontinuesalongwithnobigchangesin2017. Premiumincreasesare modestandthereisnoappreciablechangeincostsharingorenrollmentbytypeofplan. Employerscontinuetoinvestin healthpromotionandwellnessapproaches,includingbuildingincentivesaroundprogramsthatcollectinformationabout employeehealthandlifestyles. Despitecontinuingeconomicimprovement,withlowerratesofunemployment,andtheACAemployermandate,thereareno signsthatthelong-termdeclinesintheoﬀerandcoverageratesarereversing. Evenwithmodestpremiumgrowth,oﬀerrates for small ﬁrms remainmuchlowerthanthoseforlargeﬁrms,andthepercentageofworkerscoveredatworkremainsat62%. Wecontinuetoseesigniﬁcantvariationaroundtheaveragepremiumsandcontributionamounts,particularlyforsmall businesses. Ameaningfulshareofcoveredworkersinsmallﬁrmsmustpayasubstantialshareofthecostoffamilycoverage, raising the question of whether this is a viable source of coverage for the dependents of these workers. The Kaiser Family Foundation and Health Research & Educational Trust / Page 13

SUMMARYOFFINDINGS ThedebateaboutthefutureoftheACAhasfocusedontheprovisionsthatextendedcoverageinthenon-groupmarket andMedicaid,withtheprovisionsaﬀectingemployer-sponsoredcoveragereceivingrelativelylittleattention. Employers generallyappeartohaveadaptedtoACAprovisionswithoutsigniﬁcantdisruption,includingtheemployerrequirement tooﬀercoverageorpayapenalty,theprovisionsrequiringpreventivecarebecoveredwithoutcostsharing,andthat non-grandfatheredplanshaveanout-of-pocketlimitoncostsharing. Evenifrepealandreplaceeﬀortsultimatelysucceed, theimpactsonthegroupmarketwilllikelyberelativelysmall: forexample,someemployersmayreduceoﬀersofcoverageto someoftheirlower-paidemployeesormayreducethenumberofpreventiveservicesavailablewithoutcostsharing;butthe larger metrics measuringcostsandcoverageareunlikelytochangeinanysigniﬁcantway. Onepolicythatcouldaﬀectthemarketoverthenextcoupleofyearsisthehigh-costplantax,alsoknownastheCadillactax. In previous surveys, employersreportedincreasingcostsharingandmakingotherchangesinanticipationofthehigh-cost plantaxtakingeﬀectin2018. Withtheeﬀectivedateofthetaxdelayeduntil2020(andwiththeapparentwidespread Congressionalsupportforfurtherdelay),thepressureforemployerswithmoreexpensiveplanstotakeactionstoreducetheir costseemstohaveabated. Thiscouldchangeabruptly,however,ifthetaxisnotfurtherdelayedinthenearfuture. METHODOLOGY TheKaiserFamilyFoundation/HealthResearch&EducationalTrust2017AnnualEmployerHealthBeneﬁtsSurvey(Kaiser/HRET) reportsﬁndingsfromatelephonesurveyof2,137randomlyselectednon-federalpublicandprivateemployerswiththreeor moreworkers. ResearchersattheHealthResearch&EducationalTrust,NORCattheUniversityofChicago,andtheKaiserFamily Foundationdesignedandanalyzedthesurvey. NationalResearch,LLCconductedtheﬁeldworkbetweenJanuaryandJune 2017. In 2017, the overall response rate is 33%, which includes ﬁrms that oﬀer and do not oﬀer health beneﬁts. Among ﬁrms thatoﬀerhealthbeneﬁts,thesurvey’sresponserateisalso33%. Toimproveestimatesforsmallﬁrms,the2017surveyhada signiﬁcantly larger sample than previous years; the increased sample size lead to both more ﬁrms completingthesurveyand alowerresponseratethaninyearspast. Unlessotherwisenoted,diﬀerencesreferredtointhetextandﬁguresusethe0.05 conﬁdencelevelasthethresholdforsigniﬁcance. Formoreinformationonthesurveymethodology,pleasevisittheMethodologysectionathttp://ehbs.kff.org/. TheKaiserFamilyFoundation,aleaderinhealthpolicyanalysis,healthjournalismandcommunication,isdedicatedtoﬁlling theneedfortrusted,independentinformationonthemajorhealthissuesfacingournationanditspeople. TheFoundationisa non-proﬁtprivateoperatingfoundationbasedinMenloPark,California. TheHealthResearch&EducationalTrust(HRET)Foundedin1944,theHealthResearch&EducationalTrust(HRET)isthe not-for-proﬁt research and educationaﬃliateoftheAmericanHospitalAssociation(AHA).HRET’smissionistotransform healthcarethroughresearchandeducation. HRET’sappliedresearchseekstocreatenewknowledge,toolsandassistancein improvingthedeliveryofhealthcarebyprovidersandpractitionerswithinthecommunitiestheyserve. The Kaiser Family Foundation and Health Research & Educational Trust / Page 14

53% $6,690 Employer Health Benefits 2017 ANNUAL SURVEY Survey Design and Methods $18,7642017

SURVEYDESIGNANDMETHODS SurveyDesignandMethods TheKaiserFamilyFoundationandtheHealthResearch&EducationalTrust(Kaiser/HRET)conductthisannualsurveyof employer-sponsoredhealthbeneﬁts. HRET,anonproﬁtresearchorganization,isanaﬃliateoftheAmericanHospital Association. TheKaiserFamilyFoundationdesigns,analyzes,andconductsthissurveyinpartnershipwithHRET,andalso fundsthestudy. KaisercontractswithresearchersatNORCattheUniversityofChicago(NORC)toworkwiththeKaiserand HRETresearchersinconductingthestudy. Kaiser/HRETretainedNationalResearch,LLC(NR),aWashington,D.C.-basedsurvey researchﬁrm,toconducttelephoneinterviewswithhumanresourceandbeneﬁtsmanagersusingtheKaiser/HRETsurvey instrument. FromJanuarytoJune2017,NRcompletedfullinterviewswith2,137ﬁrms. SURVEYTOPICS Thesurveyincludesquestionsonthecostofhealthinsurance,healthbeneﬁtoﬀerrates,coverage,eligibility,enrollment 4 patterns, premiumcontributions, employeecostsharing,prescriptiondrugbeneﬁts,retireehealthbeneﬁts,andwellness beneﬁts. Kaiser/HRETaskseachparticipatingﬁrmasmanyas400questionsaboutitslargesthealthmaintenanceorganization(HMO), preferredproviderorganization(PPO),point-of-service(POS)plan,andhigh-deductiblehealthplanwithasavingsoption 5 (HDHP/SO). Wetreatexclusiveproviderorganizations(EPOs)andHMOsasoneplantypeandreporttheinformationunderthe bannerof“HMO”;ifanemployersponsorsbothanHMOandanEPO,theyareaskedabouttheattributesoftheplanwiththe larger enrollment. Similarly, starting in 2013, plan information for conventional (or indemnity) plans was collected within the PPObattery. LessthanonepercentofﬁrmsthatcompletedthePPOsectionhadmoreenrollmentinaconventionalplanthan in a PPOplan. Firmswith50ormoreworkerswereasked: “Doesyourﬁrmoﬀerhealthbeneﬁtsforcurrentemployeesthrougha private or corporate exchange?” EmployerswerestillaskedforplaninformationabouttheirHMO,PPO,POSandHDHP/SOplan regardlessofwhethertheypurchasedhealthbeneﬁtsthroughaprivateexchangeornot. Firmsareaskedabouttheattributesoftheircurrentplansduringtheinterview. Whilethesurvey’sﬁeldingperiodbeginsin January,manyrespondentsmayhaveaplanwhose2017planyearhasnotyetbegun[FigureM.1]. Insomecases,plansmay reporttheattributesoftheir2016plansandsomeplanattributes(suchasHSAdeductiblelimits)maynotmeetthecalendar yearregulatoryrequirements. 4 HDHP/SOpremiumestimatesdonotincludecontributionsmadebytheemployertoHealthSavingsAccountsorHealthReimbursementArrangements. 5 HDHP/SOincludeshigh-deductiblehealthplanswithadeductibleofatleast$1,000forsinglecoverageand$2,000forfamilycoverageandthatoﬀereithera HealthReimbursementArrangement(HRA)oraHealthSavingsAccount(HSA).AlthoughHRAscanbeoﬀeredalongwithahealthplanthatisnotanHDHP, thesurveycollectedinformationonlyonHRAsthatareoﬀeredalongwithHDHPs. ForspeciﬁcdeﬁnitionsofHDHPs,HRAs,andHSAs,seetheintroductionto Section8. The Kaiser Family Foundation and Health Research & Educational Trust / Page 16

SURVEYDESIGNANDMETHODS RESPONSERATE After determiningtherequiredsamplefromU.S.CensusBureaudata,Kaiser/HRETdrewitssamplefromaSurveySampling Incorporatedlist(basedonanoriginalDunandBradstreetlist)ofthenation’sprivateemployersandfromtheCensusBureau’s CensusofGovernmentslistofpublicemployerswiththreeormoreworkers. Toincreaseprecision,Kaiser/HRETstratiﬁedthe samplebytenindustrycategoriesandsixsizecategories. Kaiser/HRETattemptedtorepeatinterviewswithprioryears’survey respondents(withatleasttenemployees)whoparticipatedineitherthe2015orthe2016survey,orboth. Firmswith3-9 employeesarenotincludedinthepaneltominimizetheimpactofpaneleﬀectsontheoﬀerratestatistic. Asaresult,1,427 6 of the 2,137 ﬁrmsthatcompletedthefullsurveyalsoparticipatedineitherthe2015or2016surveys,orboth. Theoverall 7 responserateis33%. ResponseratesarecalculatedusingaCASROmethod,whichaccountsforﬁrmsthataredetermined tobeineligibleinitscalculation. Beginningin2012,thecalculationoftheresponserateswasadjustedtobeslightlymore conservativethanpreviousyears. WhiletheKaiser/HRETsurveysimilartootheremployerandhouseholdsurveyshasseenageneraldecreaseinresponserates overtime,thedecreasebetweenthe2016and2017responseratesisnotsolelyexplainedbythistrend. Inordertoimprove statistical power amongsub-groups,includingsmallﬁrmsandthosewithahighshareoflowincomeworkers,thesizeofthe samplewasexpandedfrom5,732in2016to7,895in2017. Asaresult,the2017surveyincludes204morecompletesthanthe 2016survey. Whilethisgenerallyincreasestheprecisionofestimates(forexample,areductioninthestandarderrorforthe oﬀerratefrom2.2%to1.8%),ithastheeﬀectofreducingtheresponserate. In2017,non-panelﬁrmshadaresponserateof 17%,comparedto62%forﬁrmsthathadparticipatedinoneofthelasttwoyears. Toincreaseresponserates,ﬁrmswith3-9employeeswereoﬀeredanincentiveforparticipatinginthesurvey. Athirdofthese ﬁrmsweresenta$5Starbucksgiftcardintheadvanceletter,athirdwereoﬀeredanincentiveof$50incashorasadonationto acharityoftheirchoiceaftercompletingthefullsurvey,andathirdofﬁrmswereoﬀerednoincentiveatall. Ouranalysisdoes notshowsigniﬁcantdiﬀerencesinresponsestokeyvariablesamongtheseincentivegroups. 6 In total, 139 ﬁrms participated in 2015, 274 ﬁrms participated in 2016, and 1,014 ﬁrms participated in both 2015 and 2016. 7 Responserateestimatesarecalculatedbydividingthenumberofcompletesoverthenumberofrefusalsandthefractionoftheﬁrmswithunknowneligibility toparticipateestimatedtobeeligible. Firmsdeterminedtobeineligibletocompletethesurveyarenotincludedintheresponseratecalculation. The Kaiser Family Foundation and Health Research & Educational Trust / Page 17

SURVEYDESIGNANDMETHODS Thevastmajorityofquestionsareaskedonlyofﬁrmsthatoﬀerhealthbeneﬁts. Atotalof1,832ofthe2,137respondingﬁrms indicatedtheyoﬀeredhealthbeneﬁts. Theresponserateforﬁrmsthatoﬀerhealthbeneﬁtsisalso33%. Weaskedonequestionofallﬁrmsinthestudywithwhichwemadephonecontactbutwheretheﬁrmdeclinedtoparticipate. Thequestionwas“Doesyourcompanyoﬀerahealthinsuranceprogramasabeneﬁttoanyofyouremployees?”. Atotalof 3,938ﬁrmsrespondedtothisquestion(including2,137whorespondedtothefullsurveyand1,801whorespondedtothisone 8 question). Theseresponsesareincludedinourestimatesofthepercentageofﬁrmsoﬀeringhealthbeneﬁts. Theresponserate for this question is 61%. Beginningin2014,wecollectedwhetherﬁrmswithanon-ﬁnaldispositioncode(suchasaﬁrmthatrequestedacallbackata later time or date) oﬀered health beneﬁts. By doing so we attempttomitigateanypotentialnon-responsebiasofﬁrmseither oﬀeringornotoﬀeringhealthbeneﬁtsontheoveralloﬀerratestatistic. In2017,640ofthe1,801ﬁrmresponsesthatsolely answeredtheoﬀerquestionwereobtainedthroughthispathway. FIRMSIZECATEGORIESANDKEYDEFINITIONS Throughoutthereport,ﬁgurescategorizedatabysizeofﬁrm,region,andindustry. Unlessotherwisespeciﬁed,ﬁrmsize deﬁnitionsareasfollows: smallﬁrms: 3to199workers;andlargeﬁrms: 200ormoreworkers. FigureM.2showsselected characteristics of the survey sample. A ﬁrm’s primary industry classiﬁcation is determined from Survey Sampling International’s (SSI) designation on the sampling frameandisbasedontheU.S.CensusBureau’sNorthAmericanIndustryClassiﬁcation System(NAICS).Aﬁrm’sownershipcategoryandotherﬁrmcharacteristicsusedinﬁguressuchas3.3and6.22arebasedon respondents’answers. Whilethereisconsiderableoverlapinﬁrmsinthe“State/LocalGovernment”industrycategoryand thoseinthe“public”ownershipcategory,theyarenotidentical. Forexample,publicschooldistrictsareincludedintheservice industryeventhoughtheyarepubliclyowned. FigureM.3presentsthebreakdownofstatesintoregionsandisbasedontheU.SCensusBureau’scategorizations. State-level dataarenotreportedbothbecausethesamplesizeisinsuﬃcientinmanystatesandweonlycollectinformationona 8 EstimatespresentedinFigures2.1,2.2,2.3,2.4,2.5,and2.26arebasedonthesampleofbothﬁrmsthatcompletedtheentiresurveyandthosethatanswered just one questionaboutwhethertheyoﬀerhealthbeneﬁts. The Kaiser Family Foundation and Health Research & Educational Trust / Page 18

SURVEYDESIGNANDMETHODS ﬁrm’sprimarylocationratherthanwhereallworkersmayactuallybeemployed. Somemid-andlarge-sizeemployershave employeesinmorethanonestate,sothelocationoftheheadquartersmaynotmatchthelocationoftheplanforwhichwe collectedpremiuminformation. FigureM.4displaysthedistributionofthenation’sﬁrms,workers,andcoveredworkers(employeesreceivingcoveragefrom their employer). Amongthethreemillionﬁrmsnationally,approximately60.5%employ3to9workers;suchﬁrmsemploy 7.8%ofworkers,and3.1%ofworkerscoveredbyhealthinsurance. Incontrast,lessthanonepercentofﬁrmsemploy5,000or moreworkers;theseﬁrmsemploy35.5%ofworkersand39.9%ofcoveredworkers. Therefore,thesmallestﬁrmsdominateany statistics weighted by the numberofemployers. Forthisreason,moststatisticsaboutﬁrmsarebrokenoutbysizecategories. In contrast, ﬁrms with 1,000 or more workers are the most inﬂuential employer groupincalculatingstatisticsregardingcovered workers,sincetheyemploythelargestpercentageofthenation’sworkforce. The Kaiser Family Foundation and Health Research & Educational Trust / Page 19

SURVEYDESIGNANDMETHODS Throughoutthisreport,weusetheterm“in-network”torefertoservicesreceivedfromapreferredprovider. Familycoverageis deﬁnedashealthcoverageforafamilyoffour. Thesurveyasksﬁrmswhatpercentageoftheiremployeesearnlessthanaspeciﬁedamountinordertoidentifytheportionofa ﬁrm’sworkforcethathasrelativelylowwages. Thisyear,theincomethresholdis$24,000peryearforlower-wageworkersand $60,000forhigher-wageworkers. Thesethresholdsarebasedonthe25thand75thpercentileofworkers’earningsasreported 9 bytheBureauofLaborStatisticsusingdatafromtheOccupationalEmploymentStatistics(OES)(2016). Thecutoﬀswere inﬂation-adjustedandroundedtothenearestthousand. Priorto2013,wagecutoﬀswerecalculatedusingthenow-eliminated NationalCompensationSurvey. ROUNDINGANDIMPUTATION Someﬁguresinthereportdonotsumtototalsduetorounding. Inafewcases,numbersfromdistributionﬁguresmay notaddtothenumbersreferencedinthetextduetorounding. Althoughoveralltotalsandtotalsforsizeandindustryare statistically valid, some breakdowns may not be available due to limited sample sizes or a high relative standard error. Where theunweightedsamplesizeisfewerthan30observations,ﬁguresincludethenotation“NSD”(NotSuﬃcientData). Estimates withhighrelativestandarderrorsarereviewedandinsomecasesnotpublished. Manybreakoutsbysubsetsmayhavea large standarderror, meaningthatevenlargediﬀerencesarenotstatisticallydiﬀerent. Statisticsamongsmallﬁrmsandthose weightedbythenumberofﬁrmstendtohavemorevariability. Tocontrolforitemnonresponsebias,Kaiser/HRETimputesvaluesthataremissingformostvariablesinthesurvey. Onaverage, 5%ofobservationsareimputed. Allvariablesareimputedfollowingahotdeckapproach. Thehotdeckapproachreplaces missinginformationwithobservedvaluesfromaﬁrmsimilarinsizeandindustrytotheﬁrmforwhichdataaremissing. In 2017,therewereelevenvariableswheretheimputationrateexceeded20%;mostofthesecaseswereforindividualplanlevel 9 GeneralinformationontheOEScanbefoundathttp://www.bls.gov/oes/oes_emp.htm#scope. AcomparisonbetweentheOESandtheNCSisavailableat https://www.bls.gov/opub/mlr/2013/article/lettau-zamora.htm The Kaiser Family Foundation and Health Research & Educational Trust / Page 20

SURVEYDESIGNANDMETHODS statistics. When aggregatevariableswereconstructedforalloftheplans,theimputationratewasusuallymuchlower. There areafewvariablesthatKaiser/HREThasdecidednottoimpute;thesearetypicallyvariableswhere“don’tknow”isconsidereda valid responseoption(forexample,thepercentageofworkersrespondentsbelievearecoveredbyMedicaid). Somevariables areimputedbasedontheirrelationshiptoeachother. Forexample,ifaﬁrmprovidedaworkercontributionforfamilycoverage butnopremiuminformation,aratiobetweenthefamilypremiumandfamilycontributionwasimputedandthenthefamily premiumwascalculated. Inaddition,thereareseveralvariablesinwhichmissingdataarecalculatedbasedonrespondents’ answerstootherquestions(forexample,employercontributionstopremiumsarecalculatedfromtherespondent’spremium andtheworkercontributiontopremiums). Since2014,weestimateseparatesingleandfamilycoveragepremiumsforﬁrmsthatprovidepremiumamountsastheaverage costforallcoveredworkers,insteadofdiﬀerentiatingbetweensingleandfamilycoverage. Thismethodmoreaccurately accountsfortheportionthateachtypeofcoveragecontributestothetotalcostfortheonepercentofcoveredworkerswho areenrolledatﬁrmsaﬀectedbythisadjustment. SAMPLEDESIGN WedeterminedthesamplerequirementsbasedontheuniverseofﬁrmsobtainedfromtheU.S.CensusBureau. Priortothe 2010survey,thesamplerequirementswerebasedonthetotalcountsprovidedbySurveySamplingIncorporated(SSI)(which obtainsdatafromDunandBradstreet). Since2010,wedeﬁneEducationasaseparatesamplingcategoryforthepurposes of sampling,ratherthanasasubgroupoftheServicecategory. Inthepast,Educationﬁrmswereadisproportionatelylarge shareofServiceﬁrms. Educationiscontrolledforduringpost-stratiﬁcation,andadjustingthesamplingframetoalsocontrolfor EducationallowsforamoreaccuraterepresentationofboththeEducationandServiceindustries. In past years, both private and governmentﬁrmsweresampledfromtheDunandBradstreetdatabase. Beginningin2009, Governmentﬁrmsweresampledfromthe2007CensusofGovernments. Thischangewasmadetoeliminatetheoverlapof state agencies that were frequently sampledfromtheDunandBradstreetdatabase. Thesampleofprivateﬁrmsisscreened for ﬁrmsthatarerelatedtostate/localgovernments,andiftheseﬁrmsareidentiﬁedintheCensusofGovernments,theyare reclassiﬁed as governmentﬁrmsandaprivateﬁrmisrandomlydrawntoreplacethereclassiﬁedﬁrm. Thefederalgovernment is not included in the sample frame. Finally, the data used to determine the 2017 EmployerHealthBeneﬁtsSurveysampleframeincludetheU.S.Census’2013 Statistics of U.S. Businesses and the 2012 Census of Governments. At the time of the sample design (December2016),these datarepresentedthemostcurrentinformationonthenumberofpublicandprivateﬁrmsnationwidewiththreeormore workers. Asinthepast,thepost-stratiﬁcationisbasedonthemostup-to-dateCensusdataavailable(the2014updatetothe CensusofU.S.Businesseswaspurchasedduringthesurveyﬁeldingperiod). WEIGHTINGANDSTATISTICALSIGNIFICANCE BecauseKaiser/HRETselectsﬁrmsrandomly,itispossiblethroughtheuseofstatisticalweightstoextrapolatetheresults tonational(aswellasﬁrmsize,regional,andindustry)averages. Theseweightsallowustopresentﬁndingsbasedonthe numberofworkerscoveredbyhealthplans,thenumberoftotalworkers,andthenumberofﬁrms. Ingeneral,ﬁndingsindollar amounts(suchaspremiums,workercontributions,andcostsharing)areweightedbycoveredworkers. Otherestimates,such astheoﬀerrate,areweightedbyﬁrms. SpeciﬁcweightswerecreatedtoanalyzetheHDHP/SOplansthatareoﬀeredwitha HealthReimbursementArrangement(HRA)orthatareHealthSavingsAccount(HSA)-qualiﬁed. Theseweightsrepresentthe proportionofemployeesenrolledineachofthesearrangements. Calculationoftheweightsfollowsacommonapproach. Wetrimmedtheweightsinordertoreducetheinﬂuenceofweight outliers. First, we grouped ﬁrms into size and oﬀer categories of observations. Within each strata, we identiﬁed the median and theinterquartile rangeoftheweightsandcalculatedthetrimmingcutpointasthemedianplussixtimestheinterquartile range(M+[6*IQR]).Weightvalueslargerthanthiscutpointaretrimmedtothecutpoint. Inallinstances,veryfewweight valuesweretrimmed. Finally,wecalibratedtheweightstoU.S.CensusBureau’s2014StatisticsofU.S.Businessesforﬁrmsin theprivatesector,andthe2012CensusofGovernmentsasthebasisforcalibration/post-stratiﬁcationforpublicsectorﬁrms. Historic employer-weightedstatisticswereupdatedin2011. The Kaiser Family Foundation and Health Research & Educational Trust / Page 21

SURVEYDESIGNANDMETHODS In 2017, weightswerenotadjustedusingthenonresponseadjustmentprocessdescribedinpreviousyears’methods. Asin pastyears,Kaiser/HRETconductedasmallfollow-upsurveyofthoseﬁrmswith3-49workersthatrefusedtoparticipateinthe full survey. Based on the results of a McNemar test, we were not able to verify that the results of the follow-up survey were comparabletotheresultsfromtheoriginalsurvey. In2010and2015,theresultsoftheMcNemartestwerealsosigniﬁcantand wedidnotconductanonresponseadjustment. Between2006and2012,onlylimitedinformationwascollectedonconventionalplans. Startingin2013,informationon conventionalplansiscollectedunderthePPOsectionandtherefore,thecoveredworkerweightisrepresentativeofallplan typesforwhichthesurveycollectsinformation. Thesurveycollectsinformationonphysicianoﬃcevisitsforeachplantype. Diﬀerentplantypesatthesameﬁrmmayhave diﬀerentcost-sharingstructures(e.g.,copaymentsorcoinsurance). Becausethecompositevariables(usingdatafromacrossall plantypes)arereﬂectiveofonlythoseplanswiththatprovision,separateweightsfortherelevantvariableswerecreatedin ordertoaccountforthefactthatnotallcoveredworkershavesuchprovisions. Asdiscussedbelow,changesinthe2017survey havereducedthenumberofvariable-speciﬁcweightsused. Toaccountfordesigneﬀects,thestatisticalcomputingpackageRandthelibrarypackage“survey”wereusedtocalculate 10 11 standarderrors. , All statistical tests are performed at the .05 conﬁdence level, unless otherwise noted. For ﬁgures with multipleyears,statistical tests are conducted for each year against the previous year shown, unless otherwise noted. No statistical tests are conducted for years prior to 1999. Statistical tests for a given subgroup (ﬁrms with 25-49 workers, for instance) are tested against all other ﬁrm sizes not included in that subgroup(all ﬁrmsizesNOTincludingﬁrmswith25-49workers,inthisexample). Testsaredonesimilarlyforregionand industry; for example, Northeast is comparedtoallﬁrmsNOTintheNortheast(anaggregateofﬁrmsintheMidwest,South, andWest). However,statisticaltestsforestimatescomparedacrossplantypes(forexample,averagepremiumsinPPOs)are testedagainstthe“AllPlans”estimate. Insomecases,wealsotestplan-speciﬁcestimatesagainstsimilarestimatesforother plantypes(forexample,singleandfamilypremiumsforHDHP/SOsagainstsingleandfamilypremiumsforHMO,PPO,andPOS plans); these are noted speciﬁcally in the text. The two types of statistical tests performed are the t-test and the Wald test. The smallnumberofobservationsforsomevariablesresultedinlargevariabilityaroundthepointestimates. Theseobservations sometimescarrylargeweights,primarilyforsmallﬁrms. Thereadershouldbecautionedthattheseinﬂuentialweightsmay result in large movementsinpointestimatesfromyeartoyear;however,thesemovementsareoftennotstatisticallysigniﬁcant. StandardErrorsformostkeystatisticsareavailableinatechnicalsupplementavailableatwww.kﬀ.org/ehbs. 2017SURVEY In 2017, wecontinuedtomakerevisionstohowthesurveyasksemployersabouttheirprescriptiondrugcoverage. Inmost cases, information reportedinPrescriptionDrugBeneﬁts(Section9)isnotcomparablewithpreviousyears’ﬁndings. Overtime, planshavedevelopedmorecomplexbeneﬁtdesigns. Inordertobettercaptureinformationonspecialtydrugs,weelectedto askaboutthesedrugsseparatelyfromthecostsharingonothertiers. Wemodiﬁedthequestionaboutthenumberoftiersa ﬁrm’scost-sharingstructurehastoaskspeciﬁcallyabouttiersthatdonotexclusivelycoverspecialtydrugs. Averagecopayment andcoinsurancevaluesarestillreportedamongworkerswiththreeormoretiers,twotiers,orthesamecostsharingregardless of drugclass, but noneofthesetiersincludescostsharingfortiersthatexclusivelycoverspecialtydrugs. Forty-ﬁvepercentof ﬁrmswithdrugcoveragecoverspecialtydrugsbutdonothaveatierthatonlycoversthisclassofdrugs. Inthesecases,cost sharingamongspecialtydrugsisstillcapturedwiththeplan’sotherdrugclasses. Figures9.1and9.2reportthedistributionofcost-sharingstructuresincludinganytiersforspecialtydrugs. Thisanalysisadds thenumberoftierstheﬁrmreportedbyanytierstheymayhaveforspecialtydrugs. Therefore,aﬁrmwithtwotiersandatier exclusively for specialty drugs is considered a three tier plan in this analysis, but a two tier plan when reporting average cost sharingvalues. Evenifaﬁrmhasmultiplespecialty-onlytiers,wecollectinformationononlyone. Similar to 2016, we no longer require that a ﬁrm’s cost-sharing tiers be sequential, meaning that the second tier copayment washigherthantheﬁrsttier,thethirdtierwashigherthanthesecond,andthefourthwashigherthanthethird. Asdrug 10 Analysisofthe2011surveydatausingbothRandSUDAAN(thestatisticalpackageusedpriorto2012)producedthesameestimatesandstandarderrors. 11 AsupplementwithstandarderrorsforselectestimatescanbefoundonlineatTechnicalSupplement: StandardErrorTablesforSelectedEstimates, http://ehbs.kff.org The Kaiser Family Foundation and Health Research & Educational Trust / Page 22

SURVEYDESIGNANDMETHODS formularieshavebecomemoreintricate,manyﬁrmshaveminimumandmaximumamountsattachedtotheircopaymentsand coinsurance,leadingustobelieveitwasnolongerappropriatetoassumethataﬁrm’scostsharingfollowedthissequential logic. Toreducethelengthofsurvey,inseveralareas,includingstoplosscoverageforself-fundedﬁrmsandcostsharingforhospital admissions,outpatientsurgery,andemergencyroomvisits,werevisedthequestionnairetoaskrespondentsaboutthe attributes of their largest health plan rather than each plan type they may oﬀer. This expands on the method we used for prescription drugcoveragein2016. Therefore,forthesetopics,aggregatevariablesrepresenttheattributesoftheﬁrm’slargest plantype,andarenotaweightedaverageofalloftheﬁrmsplantypes. Inprevioussurveys,ifaﬁrmhadtwoplantypes,one withacopaymentandonewithacoinsuranceforhospitaladmissions,thecoveredworkerweightwasallottedproportionally towardtheaveragecopaymentandcoinsurancebasedonthenumberofcoveredworkerswitheitherfeature. Withofthis change,comparisonamongplanstypesisnowacomparisonofﬁrmswhereanygivenplantypeisthelargest. Thechangeonly aﬀectsﬁrmsthathavemultipleplantypes(58%ofcoveredworkers). Afterreviewingtheresponsesandcomparingthemto prior years whereweaskedabouteachplantype,weﬁndthattheinformationwearereceivingissimilartoresponsesfrom previousyears. Forthisreason,wewillcontinuetoreportourresultsforthesequestionsweightedbythenumberofcovered workersinrespondingﬁrms. Starting in 2017, respondentswereallowedtovolunteerthattheirplansdidnotcoveroutpatientsurgeryorhospital admissions. Lessthan1%ofrespondentsindicatedthattheirplandidnotincludecoveragefortheseservices. Costsharingfor hospital admissions, outpatient surgery and emergencyroomvisitswasimputedbydrawingaﬁrmsimilarinsizeandindustry withinthesameplantype. In 2017, HSA-qualiﬁedhealthplansarenotallowedtohaveseparateper-persondeductiblesbelowtheminimumfamily deductible($2,600in2017). Someﬁrmsreportedper-persondeductiblesbelowthislimit;inthesecases,ﬁrmswere re-contacted,andinsomeinstances,respondentsconﬁrmedtheseresponses. Weelectednottoeditthesedeductiblestothe legal minimum. Beginningin2017,valuesbelow3%arenotshownongraphicalﬁgurestoimprovethereadabilityofthosegraphs. The underlyingdataforallestimatespresentedingraphsisavailableatwww.kﬀ.org/ehbs. AnnualinﬂationestimatesareusuallycalculatedfromApriltoApril. The12monthpercentagechangeforMaytoMaywas 12 2%. HISTORICALDATA DatainthisreportfocusprimarilyonﬁndingsfromsurveysjointlyauthoredbytheKaiserFamilyFoundationandtheHealth Research&EducationalTrust,whichhavebeenconductedsince1999. Priorto1999,thesurveywasconductedbytheHealth InsuranceAssociationofAmerica(HIAA)andKPMGusingasimilarsurveyinstrument,butdataarenotavailableforallthe interveningyears. Followingthesurvey’sintroductionin1987,theHIAAconductedthesurveythrough1990,butsomedata arenotavailableforanalysis. KPMGconductedthesurveyfrom1991-1998. However,in1991,1992,1994,and1997,onlylarger ﬁrmsweresampled. In1993,1995,1996,and1998,KPMGinterviewedbothlargeandsmallﬁrms. In1998,KPMGdivesteditself of its CompensationandBeneﬁtsPractice,andpartofthatdivestitureincludeddonatingtheannualsurveyofhealthbeneﬁts toHRET. This report uses historical data from the 1993, 1996, and 1998 KPMG Surveys of Employer-SponsoredHealthBeneﬁtsandthe 1999-2016Kaiser/HRETSurveyofEmployer-SponsoredHealthBeneﬁts. Foralonger-termperspective,wealsousethe1988 surveyofthenation’semployersconductedbytheHIAA,onwhichtheKPMGandKaiser/HRETsurveysarebased. Thesurvey designsforthethreesurveysaresimilar. Published: September19th,2017. LastUpdated: 2017-09-14 12 BureauofLaborStatistics,ConsumerPriceIndex,U.S.CityAverageofAnnualInﬂation(ApriltoApril),2000-2017;[cited2017July21]http: //data.bls.gov/timeseries/CUUR0000SA0?output_view=pct_1mth The Kaiser Family Foundation and Health Research & Educational Trust / Page 23

53% $6,690 Employer Health Benefits 2017 ANNUAL SURVEY Cost of Health Insurance section 1 $18,7642017

SECTION1. COSTOFHEALTHINSURANCE Section1 CostofHealthInsurance Theaverageannualpremiumsin2017are$6,690forsinglecoverageand$18,764forfamilycoverage. Theaveragepremium for single coverage increased by 4%since2016andtheaveragepremiumforfamilycoverageincreasedby3%. Theaverage familypremiumhasincreased55%since2007and19%since2012. Theaveragefamilypremiumforcoveredworkersinsmall ﬁrms(3-199workers)($17,615)issigniﬁcantlylowerthanaveragefamilypremiumsforworkersinlargeﬁrms(200ormore workers)($19,235). PREMIUMCOSTSFORSINGLEANDFAMILYCOVERAGE • Theaveragepremiumforsinglecoveragein2017is$6,690peryear. Theaveragepremiumforfamilycoverageis$18,764 peryear[Figure1.1]. • Theaverageannualpremiumforfamilycoverageforcoveredworkersinsmallﬁrms($17,615)islowerthantheaverage premiumforcoveredworkersinlargeﬁrms($19,235)[Figure1.2]. • TheaverageannualpremiumsforcoveredworkersinHDHP/SOsarelowerforsinglecoverage($6,024)andfamily coverage($17,581)thanoverallaveragepremiums. TheaveragepremiumsforcoveredworkersenrolledinPPOplans arehigherforsingle($6,965)andfamilycoverage($19,481)thantheoverallplanaverage[Figure1.1]. • TheaveragepremiumsforcoveredworkersarelowerintheSouth($6,372forsinglecoverageand$18,038forfamily coverage)thantheaveragepremiumsforcoveredworkersinallotherregions. Theaveragepremiumforfamily coverageforcoveredworkersintheNortheast($20,092)ishigherthantheaveragefamilypremiumforcoveredworkers in all other regions [Figure 1.3]. • Theaveragepremiumsforcoveredworkersvaryacrossindustries,withthoseintheretailindustrybeingparticularlylow ($5,716forsinglecoverageand$16,920forfamilycoverage)[Figure1.4]. • Theaveragepremiumsforcoveredworkersinﬁrmswitharelativelylargeshareofyoungerworkers(whereatleast35% of the workersareage26oryounger)arelowerthantheaveragepremiumsforcoveredworkersinﬁrmswithasmaller shareofyoungerworkers($5,922vs. $6,762forsinglecoverageand$16,893vs. $18,939forfamilycoverage)[Figures1.5 and1.6]. • Premiumsalsovarybyﬁrmwagelevel. Theaveragepremiumsforcoveredworkersinﬁrmswitharelativelylargeshare of lower-wageworkers(whereatleast35%ofworkersearn$24,000ayearorless)arelessthantheaveragepremiums at ﬁrmswithasmallershareoflower-wageworkers($6,035vs. $6,739forsinglecoverageand$16,376vs. $18,942for familycoverage)[Figures1.5and1.6]. • Theaveragepremiumsforcoveredworkersinﬁrmswithatleastsomeunionworkersarehigherthantheaverage premiumsforcoveredworkersinﬁrmswithoutunionworkers($7,183vs. $6,434forsinglecoverageand$19,885vs. $18,177forfamilycoverage)[Figures1.5and1.6]. • Thereisalsovariationinpremiumsbytypeofﬁrmownership. Forbothsingleandfamilycoverage,coveredworkers at private for-proﬁt ﬁrms have lower average annual premiumsthancoveredworkersatpublicﬁrmsorprivate not-for-proﬁt ﬁrms[Figures1.5and1.6]. The Kaiser Family Foundation and Health Research & Educational Trust / Page 25

SECTION1. COSTOFHEALTHINSURANCE The Kaiser Family Foundation and Health Research & Educational Trust / Page 26

SECTION1. COSTOFHEALTHINSURANCE The Kaiser Family Foundation and Health Research & Educational Trust / Page 27

SECTION1. COSTOFHEALTHINSURANCE The Kaiser Family Foundation and Health Research & Educational Trust / Page 28

SECTION1. COSTOFHEALTHINSURANCE The Kaiser Family Foundation and Health Research & Educational Trust / Page 29

SECTION1. COSTOFHEALTHINSURANCE The Kaiser Family Foundation and Health Research & Educational Trust / Page 30

SECTION1. COSTOFHEALTHINSURANCE PREMIUMDISTRIBUTION • Thereisconsiderablevariationinpremiumsforbothsingleandfamilycoverage. – Twentypercentofcoveredworkersareemployedinaﬁrmwithasinglepremiumatleast20%higherthanthe averagesinglepremium,while21%ofcoveredworkersareinﬁrmswithasinglepremiumlessthan80%ofthe averagesinglepremium[Figures1.7]. – Forfamilycoverage,17%ofcoveredworkersareemployedinaﬁrmwithafamilypremiumatleast20%higher thantheaveragefamilypremium,while21%ofcoveredworkersareinﬁrmswithafamilypremiumlessthan80% of the averagefamilypremium[Figure1.7]. • Six percent of covered workers are in a ﬁrm with a premiumofatleast$10,000ayearforsinglecoverage[Figure1.8]. Sevenpercentofcoveredworkersareinaﬁrmwithapremiumofatleast$26,000ayearforfamilycoverage[Figure1.9]. The Kaiser Family Foundation and Health Research & Educational Trust / Page 31

SECTION1. COSTOFHEALTHINSURANCE The Kaiser Family Foundation and Health Research & Educational Trust / Page 32

SECTION1. COSTOFHEALTHINSURANCE PREMIUMCHANGESOVERTIME • Theaveragepremiumforsinglecoverageis4%higherthanthesinglepremiumlastyearandtheaveragepremiumfor familycoverageis3%higherthantheaveragefamilypremiumlastyear[Figure1.10]. – Theaveragepremiumsforsingleandfamilycoveragehavegrownatthesamerate(19%)since2012. – Theaveragefamilypremiumsforbothsmallandlargeﬁrmshaveincreasedatsimilarratessince2012(15%for smallﬁrmsand20%forlargeﬁrms). Forsmallﬁrms,theaveragefamilypremiumrosefrom$15,253in2012to $17,615in2017. Forlargeﬁrms,theaveragefamilypremiumrosefrom$15,980in2012to$19,235in2017[Figures 1.11and1.12]. – The$18,764averagefamilypremiumin2017is19%higherthantheaveragefamilypremiumin2012and55% higherthantheaveragefamilypremiumin2007[Figure1.10]. The19%familypremiumgrowthinthelastﬁve yearsissmallerthanthe30%growthbetween2007and2012,orthe51%premiumgrowthbetween2002and 2007[Figure1.13]. – Theaveragefamilypremiumsforbothsmallandlargeﬁrmshaveincreasedatsimilarratessince2007(49%for smallﬁrmsand57%forlargeﬁrms). Forsmallﬁrms,theaveragefamilypremiumrosefrom$11,835in2007to $17,615in2017. Forlargeﬁrms,theaveragefamilypremiumrosefrom$12,233in2007to$19,235in2017[Figures 1.11and1.12]. • Forcoveredworkersinlargeﬁrms,overthelastﬁveyears,theaveragefamilypremiuminﬁrmsthatarefullyinsuredhas grownatasimilarratetotheaveragefamilypremiumforcoveredworkersinfullyorpartiallyself-fundedﬁrms(16%for fully insured plans and 21% for self-funded ﬁrms) [Figure 1.14]. The Kaiser Family Foundation and Health Research & Educational Trust / Page 33

SECTION1. COSTOFHEALTHINSURANCE The Kaiser Family Foundation and Health Research & Educational Trust / Page 34

SECTION1. COSTOFHEALTHINSURANCE The Kaiser Family Foundation and Health Research & Educational Trust / Page 35

SECTION1. COSTOFHEALTHINSURANCE The Kaiser Family Foundation and Health Research & Educational Trust / Page 36

53% $6,690 Employer Health Benefits 2017 ANNUAL SURVEY Health Benefits Offer Rates section 2 $18,7642017

SECTION2. HEALTHBENEFITSOFFERRATES Section2 HealthBeneﬁtsOﬀerRates Whilenearlyalllargeﬁrms(200ormoreworkers)oﬀerhealthbeneﬁtstoatleastsomeemployees,smallﬁrms(3-199 workers)aresigniﬁcantlylesslikelytodoso. Thepercentageofallﬁrmsoﬀeringhealthbeneﬁtsin2017(53%)issimilartothe percentageofﬁrmsoﬀeringhealthbeneﬁtslastyear(56%),butlowerthanthepercentagesofﬁrmsoﬀeringhealthbeneﬁtsin 2007(59%)and2012(61%). Aswereportedlastyear,therehasbeenalong-termdeclineintheoﬀerandcoverageratesfor 1 employer-providedcoverage,particularlyamongsmallerﬁrms. Firmsnotoﬀeringhealthbeneﬁtscontinuetocitecostasthemostimportantreasontheydonotdoso. Almostallﬁrmsthat oﬀercoverageoﬀertodependentssuchaschildrenandthespousesofeligibleemployees. FIRMOFFERRATES • In 2017, 53%ofﬁrmsoﬀerhealthbeneﬁts,similartothe56%whoreporteddoingsoin2016[Figure2.1]. – Ninety-ninepercentoflargeﬁrmsoﬀerhealthbeneﬁtstoatleastsomeoftheirworkers. Incontrast,only53% of small ﬁrmsoﬀerhealthbeneﬁtsin2017[Figures2.2and2.3]. Thepercentagesofbothsmallandlargeﬁrms oﬀeringhealthbeneﬁtstoatleastsomeoftheirworkersaresimilartothoseoflastyear[Figure2.2]. – Theoverallpercentageofﬁrmsoﬀeringcoveragein2017islessthanthepercentageoﬀeringcoveragein2012 (61%)and2007(59%)[Figure2.1]. Aswereportedlastyear,therehasbeenalong-termdeclineintheoﬀerand coverageratesforemployer-providedcoverage,particularlyamongsmallerﬁrms. – Sincemostﬁrmsinthecountryaresmall,variationintheoveralloﬀerrateisdrivenlargelybychangesinthe percentagesofthesmallestﬁrms(3-9workers)oﬀeringhealthbeneﬁts. Formoreinformationonthedistribution 2 of ﬁrmsinthecountry,seetheSurveyDesignandMethodsSectionandFigureM.4. – Ninety-sixpercentofﬁrmswith100ormoreworkersoﬀerhealthbeneﬁtstoatleastsomeoftheirworkersin2017. Ninetypercentofﬁrmswith50-99workersoﬀerbeneﬁtstoatleastsomeworkers[Figure2.4]. – Eighty-ninepercentofallworkersareemployedbyaﬁrmthatoﬀershealthbeneﬁtstoatleastsomeofitsworkers [Figure 2.26]. • Oﬀerratesvaryacrossdiﬀerenttypesofﬁrms. – Smallerﬁrmsarelesslikelytooﬀerhealthinsurance: 40%ofﬁrmswith3-9workersoﬀercoverage,comparedto 78%ofﬁrmswith25-49workers,and92%ofﬁrmswith50-199workers[Figure2.3]. – Oﬀerratesthroughoutdiﬀerentﬁrmsizecategoriesin2017remainsimilartothosereportedin2016[Figure2.2]. 1 Kaiser Family Foundation. Diminishingoﬀerandcoverageratesamongprivatesectoremployees[Internet]. MenloPark,(CA):KFF;2016Sep[cited2017Jul13]. Availablefrom: http://www.kff.org/private-insurance/issue-brief/diminishing-offer-and-coverage-rates-among-private-sector-employees/ 2 Becausesurveysonlycollectinformationfromaportionofthetotalnumberofﬁrmsinthecountry,thereisuncertaintyinanyestimate. Sincethereareso manysmallﬁrms,sometimesevenseeminglylargediﬀerencesarenotstatisticallydiﬀerent. FormoreinformationontheEmployerHealthBeneﬁtsSurvey’s weightinganddesignpleaseseetheSurveyDesignandMethodssection. The Kaiser Family Foundation and Health Research & Educational Trust / Page 38

SECTION2. HEALTHBENEFITSOFFERRATES The Kaiser Family Foundation and Health Research & Educational Trust / Page 39

SECTION2. HEALTHBENEFITSOFFERRATES The Kaiser Family Foundation and Health Research & Educational Trust / Page 40

SECTION2. HEALTHBENEFITSOFFERRATES The Kaiser Family Foundation and Health Research & Educational Trust / Page 41

SECTION2. HEALTHBENEFITSOFFERRATES PART-TIMEANDTEMPORARYWORKERS • Amongﬁrmsoﬀeringhealthbeneﬁts,relativelyfewoﬀerbeneﬁtstotheirpart-timeandtemporaryworkers. – TheACAdeﬁnesfull-timeworkersasthosewhoonaverageworkatleast30hoursperweek,andpart-time workersasthosewhoonaverageworkfewerthan30hoursperweek. Theemployersharedresponsibility provisionoftheACArequiresthatﬁrmswithatleast50full-timeequivalentemployeesoﬀerfull-timeemployees 3 coveragethatmeetsminimumstandardsorbeassessedapenalty. Beginningin2015,wemodiﬁedthesurveyto explicitly ask employers whethertheyoﬀeredbeneﬁtstoemployeesworkingfewerthan30hours. Ourprevious questiondidnotincludeadeﬁnitionof“part-time”. Forthisreason,historicaldataonpart-timeoﬀerratesare shown,butwedidnottestwhetherthediﬀerencesbetween2014and2015weresigniﬁcant. Manyemployers mayworkwithmultipledeﬁnitionsofpart-time;onefortheircompliancewithlegalrequirementsandanotherfor internal policies and programs. – In2017,13%ofallﬁrmsthatoﬀerhealthbeneﬁtsoﬀerthemtopart-timeworkers[Figure2.7]. Largeﬁrmsare morelikelytooﬀerhealthbeneﬁtstopart-timeworkersthansmallﬁrms(31%vs.12%)[Figure2.9]. • Asmallpercentage(5%)ofﬁrmsoﬀeringhealthbeneﬁtsoﬀerthemtotemporaryworkers[Figure2.8]. Amongﬁrms oﬀeringhealthbeneﬁts,largeﬁrmsaremorelikelythansmallﬁrmstooﬀerbeneﬁtstotemporaryworkers(13%vs.5%) [Figure 2.10]. The percentage of large ﬁrms oﬀering health beneﬁts to temporaryworkersisnotstatisticallydiﬀerent fromthe17%reportedin2016[Figure2.8]. 3 Internal RevenueCode. 26U.S.Code§4980H-Sharedresponsibilityforemployersregardinghealthcoverage. 2011. https://www.gpo.gov/fdsys/pkg/ USCODE-2011-title26/pdf/USCODE-2011-title26-subtitleD-chap43-sec4980H.pdf The Kaiser Family Foundation and Health Research & Educational Trust / Page 42

SECTION2. HEALTHBENEFITSOFFERRATES The Kaiser Family Foundation and Health Research & Educational Trust / Page 43

SECTION2. HEALTHBENEFITSOFFERRATES The Kaiser Family Foundation and Health Research & Educational Trust / Page 44

SECTION2. HEALTHBENEFITSOFFERRATES SPOUSES,DEPENDENTSANDDOMESTICPARTNERBENEFITS • Themajorityofﬁrmsoﬀeringhealthbeneﬁtsoﬀertospousesanddependents,suchaschildren. In2017,94%ofsmall ﬁrmsand100%oflargeﬁrmsoﬀeringhealthbeneﬁtsoﬀercoveragetospouses,similartolastyear. Ninety-twopercent of small ﬁrmsand100%oflargeﬁrmsoﬀeringhealthbeneﬁtscoverotherdependents,suchaschildren,similartolast year. Five percent of small ﬁrms oﬀering health beneﬁts oﬀer only single coverage to employees[Figure2.11]. • Employerswerealsoaskedwhethersame-sexoropposite-sexdomesticpartnerswereallowedtoenrollintheﬁrm’s coverage. Whiledeﬁnitionsmayvary,employersoftendeﬁnedomesticpartnersasanunmarriedcouplewhohaslived togetherforaspeciﬁedperiodoftime. Firmsmaydeﬁnedomesticpartnersseparatelyfromanylegalrequirementsa state mayhave,andalso,employersmayhaveadiﬀerentpolicyindiﬀerentpartsofthecountryorfordiﬀerentworkers. – In2017,36%ofﬁrmsoﬀeringhealthbeneﬁtsoﬀercoveragetoopposite-sexdomesticpartners,similartothe27% whodidsoin2016. Fortypercentofﬁrmsoﬀeringhealthbeneﬁtsoﬀercoveragetosame-sexdomesticpartners, similar to the 32% whodidsolastyear[Figure2.13]. – Whenﬁrmsareaskediftheyoﬀerhealthbeneﬁtstooppositeorsame-sexdomesticpartners,manyreport thattheyhavenotencounteredthisissue. Atsomesmallﬁrms,theﬁrmmaynothaveformalhumanresource policies on domesticpartnerssimplybecausenoneoftheﬁrm’sworkershaveaskedtocoveradomesticpartner. Regardinghealthbeneﬁtsforopposite-sexdomesticpartners,30%ofﬁrmsreportin2017thattheyhavenot encounteredthisrequestorthatthequestionwasnotapplicable[Figure2.12]. Thevastmajorityofﬁrmsinthe UnitedStatesaresmallbusinesses[FigureM.1]. Therefore,statisticsaboutthepercentageofﬁrmsthatoﬀer domesticpartnerbeneﬁtsarelargelydeterminedbysmallbusinesses. Moresmallﬁrms(31%)thanlargeﬁrms (2%)indicatethattheyhavenotencounteredthisrequestorthatthequestionwasnotapplicable[Figure2.12]. Regardinghealthbeneﬁtsforsame-sexdomesticpartners,34%ofﬁrmsreportthattheyhavenotencounteredthe requestorthatthequestionwasnotapplicable. Moresmallﬁrms(35%)thanlargeﬁrms(4%)reportthattheyhave notencounteredtheissueofoﬀeringbeneﬁtstosame-sexdomesticpartners[Figure2.12]. – Amonglargeﬁrmsnotoﬀeringhealthbeneﬁtstosame-sexdomesticpartners,3%stoppedoﬀeringthemwithin thelast12months. • Overhalf(57%)ofﬁrmsthatoﬀerhealthbeneﬁtstospousesalsooﬀercoveragetosame-sexspouses,withlargeﬁrms morelikelythansmallﬁrmstooﬀercoveragetosame-sexspouses(88%vs.56%). Smallﬁrmsaremorelikelythanlarge ﬁrmstoreportthatthisrequesthasnotbeenencountered(32%vs.4%)[Figure2.15]. • Amongallﬁrmsthatoﬀerhealthbeneﬁts,15%reportprovidingadditionalcompensationorbeneﬁtstoemployees if they enroll in a spouse’s plan, and 18% provide additional compensation or beneﬁts to employees if they do not participate in the ﬁrm’s health beneﬁts [Figure 2.16]. The Kaiser Family Foundation and Health Research & Educational Trust / Page 45

SECTION2. HEALTHBENEFITSOFFERRATES The Kaiser Family Foundation and Health Research & Educational Trust / Page 46

SECTION2. HEALTHBENEFITSOFFERRATES The Kaiser Family Foundation and Health Research & Educational Trust / Page 47

SECTION2. HEALTHBENEFITSOFFERRATES SUPPLEMENTALANDVOLUNTARYBENEFITS • Firmsoﬀeringhealthbeneﬁtsalsooﬀeravarietyofsupplementalandotherhealthbeneﬁtstotheirworkers. Largeﬁrms aremorelikelythansmallﬁrmstooﬀerthesebeneﬁts[Figure2.17]. Amongﬁrmsoﬀeringhealthbeneﬁts: – Sixty-sevenpercentofsmallﬁrmsand97%oflargeﬁrmsoﬀerdentalbeneﬁtstotheiremployees. Ofﬁrmsoﬀering thesebeneﬁts,67%makeacontributiontowardthecostofthecoverage[Figure2.18]. – Forty-sevenpercentofsmallﬁrmsand82%oflargeﬁrmsoﬀervisionbeneﬁtstotheiremployees. Ofﬁrmsoﬀering thesebeneﬁts,54%makeacontributiontowardthecostofthecoverage[Figure2.18]. The Kaiser Family Foundation and Health Research & Educational Trust / Page 48

SECTION2. HEALTHBENEFITSOFFERRATES – Critical illness insurance provides a cash beneﬁt when an enrollee is diagnosed with a speciﬁed condition, such ascancer. Twenty-threepercentofsmallﬁrmsand46%oflargeﬁrmsoﬀercriticalillnessinsurancetotheir employees. Ofﬁrmsoﬀeringthesebeneﬁts,3%makeacontributiontowardthecostofthecoverage[Figure2.18]. – Hospitalindemnityplans,sometimesknownashospitalcashplans,provideacashbeneﬁtwhenanenrolleeis admittedtothehospitalorhasacertaintypeofoutpatientsurgery. Sixteenpercentofsmallﬁrmsand28%of large ﬁrmsoﬀerhospitalindemnityinsurancetotheiremployees. Ofﬁrmsoﬀeringthesebeneﬁts,5%makea contributiontowardthecostofthecoverage[Figure2.18]. – Long-termcareinsurancecoversassistancewithdailylivingnotgenerallycoveredbyhealthinsurancesuchas carefromahomehealthworkerornursinghome. Sixteenpercentofsmallﬁrmsand25%oflargeﬁrmsoﬀer long-termcareinsurancetotheiremployees,similartothepercentagesin2011. Ofﬁrmsoﬀeringthesebeneﬁts, 47%makeacontributiontowardthecostofthecoverage[Figure2.18]. The Kaiser Family Foundation and Health Research & Educational Trust / Page 49

SECTION2. HEALTHBENEFITSOFFERRATES The Kaiser Family Foundation and Health Research & Educational Trust / Page 50

SECTION2. HEALTHBENEFITSOFFERRATES FIRMSNOTOFFERINGHEALTHBENEFITS • Thesurveyasksﬁrmsthatdonotoﬀerhealthbeneﬁtsiftheyhaveoﬀeredinsuranceorshoppedforinsuranceinthe recentpast,andabouttheirmostimportantreasonsfornotoﬀeringcoverage. Becausesuchasmallpercentageoflarge ﬁrmsreportnotoﬀeringhealthbeneﬁts,wepresentresponsesforsmallnon-oﬀeringﬁrmsonly. – Thecostofhealthinsuranceremainstheprimaryreasoncitedbyﬁrmsfornotoﬀeringhealthbeneﬁts. Among smallﬁrmsnotoﬀeringhealthbeneﬁts,44%citehighcostas“themostimportantreason”fornotdoingso, followedby“theﬁrmistoosmall”(17%)[Figure2.22]. Relativelyfewsmallﬁrmsindicatethattheydonotoﬀer becausetheybelievethatemployeeswillgetabetterdealonthehealthinsuranceexchanges(2%). • Manysmallnon-oﬀeringﬁrmshaveeitheroﬀeredhealthinsuranceinthepastﬁveyears,orhaveshoppedforhealth insuranceinthepastyear. Twentypercentofsmallnon-oﬀeringﬁrmshaveoﬀeredhealthbeneﬁtsinthepastﬁveyears, and13%haveshoppedforcoverageinthepastyear[Figure2.23]. The20%ofsmallnon-oﬀeringﬁrmsthathaveoﬀered The Kaiser Family Foundation and Health Research & Educational Trust / Page 51

SECTION2. HEALTHBENEFITSOFFERRATES coverageinthepastﬁveyearsissimilartothe19%reportedlastyear. • Amongsmallnon-oﬀeringﬁrmsthatreporttheystoppedoﬀeringcoveragewithinthelastﬁveyears,18%stopped oﬀeringcoveragewithinthelastyear. • Amongsmallnon-oﬀeringﬁrms,16%reportthattheyprovidefundstotheiremployeestopurchasehealthinsuranceon their ownintheindividualmarketorthroughahealthinsuranceexchange[Figure2.24]. Fortypercentoftheseﬁrms provideworkersbetween$2,000and$5,999ayeartopurchasenon-groupinsurance[Figure2.25]. The Kaiser Family Foundation and Health Research & Educational Trust / Page 52

SECTION2. HEALTHBENEFITSOFFERRATES The Kaiser Family Foundation and Health Research & Educational Trust / Page 53

SECTION2. HEALTHBENEFITSOFFERRATES The Kaiser Family Foundation and Health Research & Educational Trust / Page 54

53% $6,690 Employer Health Benefits 2017 ANNUAL SURVEY Employee Coverage, Eligibility, and Participation section 3 $18,7642017

SECTION3. EMPLOYEECOVERAGE,ELIGIBILITY,ANDPARTICIPATION Section3 EmployeeCoverage,Eligibility,and Participation EmployersaretheprincipalsourceofhealthinsuranceintheUnitedStates,providinghealthbeneﬁtsforabout151million 1 non-elderlypeopleinAmerica. Mostworkersareoﬀeredhealthcoverageatwork,andthemajorityofworkerswhoare oﬀeredcoveragetakeit. Workersmaynotbecoveredbytheirownemployerforseveralreasons: theiremployermaynotoﬀer coverage,theymaynotbeeligibleforthebeneﬁtsoﬀeredbytheirﬁrm,theymayelecttoreceivecoveragethroughtheir spouse’semployer,ortheymayrefusecoveragefromtheirﬁrm. Beforeeligibleworkersmayenroll,aboutthree-quarters(76%) of coveredworkersfaceawaitingperiod. ELIGIBILITY • Notallworkersareeligibleforthehealthbeneﬁtsoﬀeredbytheirﬁrm,andnotalleligibleworkers“takeup”(i.e.,elect toparticipatein)theoﬀerofcoverage. Theshareofworkerscoveredinaﬁrmisaproductofboththepercentageof workerswhoareeligiblefortheﬁrm’shealthinsuranceandthepercentagethatchoosetotakeupthebeneﬁt. The percentageofworkerseligibleforhealthbeneﬁtsatoﬀeringﬁrmsin2017issimilartolastyearandtherecentpastfor bothsmallandlargeﬁrms[Figure3.1]. – Seventy-ninepercentofworkersinﬁrmsoﬀeringhealthbeneﬁtsareeligibleforthecoverageoﬀeredbytheir employer. Thepercentageofeligibleworkersishigherinsmallﬁrmswith3-24workers(84%)thanotherﬁrmsizes [Figure 3.2]. – Eligibility varies considerably by ﬁrm wage level. Workers in ﬁrms with a relatively large share of lower-wage workers(whereatleast35%ofworkersearn$24,000ayearorless)arelesslikelytobeeligibleforhealthbeneﬁts thanworkersinﬁrmswithasmallershareoflower-wageworkers(68%vs.81%)[Figure3.3]. – Workersinﬁrmswitharelativelylargeshareofhigher-wageworkers(whereatleast35%earn$60,000or moreannually)aremorelikelytobeeligibleforhealthbeneﬁtsthanworkersinﬁrmswithasmallershareof higher-wageworkers(88%vs.73%)[Figure3.3]. – Eligibility also varies by the age of the workforce. Those in ﬁrms with a relatively small share of younger workers (wherefewerthan35%oftheworkersareage26oryounger)aremorelikelytobeeligibleforhealthbeneﬁtsthan thoseinﬁrmswithalargershareyoungerworkers(81%vs.64%)[Figure3.3]. – Theaverageeligibilityrateisparticularlylowinretailﬁrms(54%)[Figure3.2]. 1 Kaiser CommissiononMedicaidandtheUninsured. Theuninsured: Aprimer—Keyfactsabouthealthinsuranceandtheuninsuredinthewake of national health reform [Internet]. Washington (DC): The Commission;2016Nov[cited2016Aug1]. http://www.kff.org/uninsured/report/ the-uninsured-a-primer-key-facts-about-health-insurance-and-the-uninsured-in-the-wake-of-national-health-reform/. Seesupplementaltables-Table1: 270.2millionnon-elderlypeople,55.5%ofwhomarecoveredbyESI. The Kaiser Family Foundation and Health Research & Educational Trust / Page 56

SECTION3. EMPLOYEECOVERAGE,ELIGIBILITY,ANDPARTICIPATION The Kaiser Family Foundation and Health Research & Educational Trust / Page 57

SECTION3. EMPLOYEECOVERAGE,ELIGIBILITY,ANDPARTICIPATION TAKE-UPRATE • Alargeshareofworkerswhoareoﬀeredhealthbeneﬁtsatworkelecttoenroll. In2017,78%ofeligibleworkerstakeup 2 coveragewhenitisoﬀeredtothem,similartolastyear[Figure3.1]. Eligibleworkersinlargeﬁrms(200ormoreworkers) aremorelikelytotakeupcoveragewhenoﬀeredthaneligibleworkersinsmallﬁrms(3-199workers)(79%vs.75%) [Figure 3.2]. – Thelikelihoodofaworkeracceptingaﬁrm’soﬀerofcoveragevariesbyﬁrmwagelevel. Eligibleworkersinﬁrms witharelativelysmallshareoflower-wageworkers(wherefewerthan35%ofworkersearn$24,000ayearorless) aremorelikelytotakeupcoveragethaneligibleworkersinﬁrmswithalargershareoflower-wageworkers(79% vs. 65%) [Figure 3.4]. – Eligible workers in ﬁrms with a relatively large share of higher-wage workers (where at least 35% earn $60,000 ormoreannually)aremorelikelytotakeupcoveragethanthoseinﬁrmswithasmallershareofhigher-wage workers(82%vs.74%)[Figure3.4]. – Eligible workers in ﬁrms with relatively large share of younger workers (where at least 35% of the workers are age 26oryounger)arelesslikelytotakeupcoveragethanthoseinﬁrmswithasmallershareofyoungerworkers(70% vs. 79%) [Figure 3.4]. – Thepercentageofeligibleworkerstakingupbeneﬁtsinoﬀeringﬁrmsalsovariesbyindustry,withaloweraverage take-uprateatretailﬁrms(63%)andahigheraveragetake-uprateatstateandlocalgovernments(89%)[Figure 3.2]. 2 In 2009, Kaiser/HRETbeganweightingthepercentageofworkersthattakeupcoveragebythenumberofworkerseligibleforcoverage. Thehistoricaltakeup estimateshavealsobeenupdated. SeetheSurveyDesignandMethodssectionformoreinformation. The Kaiser Family Foundation and Health Research & Educational Trust / Page 58

SECTION3. EMPLOYEECOVERAGE,ELIGIBILITY,ANDPARTICIPATION • Theshareofeligibleworkerstakingupbeneﬁtsinoﬀeringﬁrms(78%)hasdecreasedovertime,from81%in2012and 82%in2007. COVERAGE • Thepercentageofworkersatﬁrmsoﬀeringhealthbeneﬁtsthatarecoveredbytheirﬁrm’shealthplanin2017is62%, thesamepercentageaslastyear[Figure3.1]. – Thecoveragerateatﬁrmsoﬀeringhealthbeneﬁtsisthesameforsmallﬁrmsandlargeﬁrmsin2017. Theserates aresimilartotherateslastyearforbothsmallﬁrmsandlargeﬁrms[Figure3.1]. • Thereissigniﬁcantvariationbyindustryinthecoveragerateamongworkersinﬁrmsoﬀeringhealthbeneﬁts. The averagecoveragerateisparticularlylowinretail(34%)andservice(57%)industries[Figure3.2]. • Amongworkersinﬁrmsoﬀeringhealthbeneﬁts,thoseinﬁrmswitharelativelylargeshareoflower-wageworkers (whereatleast35%ofworkersearn$24,000ayearorless)arelesslikelytobecoveredbytheirownﬁrmthanworkersin ﬁrmswithasmallershareoflower-wageworkers(44%vs.64%). Acomparablepatternexistsinﬁrmswitharelatively large share of higher-wageworkers(whereatleast35%earn$60,000ormoreannually),withworkersinthese ﬁrmsbeingmorelikelytobecoveredbytheiremployer’shealthbeneﬁtsthanthoseinﬁrmswithasmallershareof higher-wageworkers(72%vs.54%)[Figure3.5]. • Amongworkersinﬁrmsoﬀeringhealthbeneﬁts,thoseinﬁrmswitharelativelysmallshareofyoungerworkers(where fewerthan35%oftheworkersareage26oryounger)aremorelikelytobecoveredbytheirownﬁrmthanthoseinﬁrms withalargershareofyoungerworkers(64%vs.45%)[Figure3.5]. • Amongworkersinallﬁrms,includingthosethatoﬀerandthosethatdonotoﬀerhealthbeneﬁts,55%ofworkersare coveredbyhealthbeneﬁtsoﬀeredbytheiremployer,thesamepercentageaslastyear. Thecoverageratein2017is lowerthanthecoverageratein2007(59%). The Kaiser Family Foundation and Health Research & Educational Trust / Page 59

SECTION3. EMPLOYEECOVERAGE,ELIGIBILITY,ANDPARTICIPATION The Kaiser Family Foundation and Health Research & Educational Trust / Page 60

SECTION3. EMPLOYEECOVERAGE,ELIGIBILITY,ANDPARTICIPATION WAITINGPERIODS • Waitingperiodsareaspeciﬁedlengthoftimeafterbeginningemploymentbeforeworkersareeligibletoenrollinhealth 3 beneﬁts. Withsomeexceptions,theAﬀordableCareActrequiresthatwaitingperiodscannotexceed90days. For example,employersarepermittedtohaveorientationperiodsbeforethewaitingperiodbeginswhich,ineﬀect,means aworkerisnoteligibleforcoverage3monthsafterhire. Ifaworkeriseligibletoenrollonthe1stofthemonthafter threemonthsofemployment,thissurveyroundsupandconsiderstheﬁrm’swaitingperiodfourmonths. Forthese reasons,someemployersstillhavewaitingperiodsexceedingthe90-daymaximum. • Seventy-sixpercentofcoveredworkersfaceawaitingperiodbeforecoverageisavailable,similartolastyear[Figure3.9]. Coveredworkersinsmallﬁrmsaremorelikelythanthoseinlargeﬁrmstohaveawaitingperiod(84%vs.73%)[Figure 3.7]. • Theaveragewaitingperiodamongcoveredworkerswhofaceawaitingperiodis1.9months[Figure3.7]. Asmall percentage(2%)ofcoveredworkerswithawaitingperiodhaveawaitingperiodofmorethan3months. – Respondentswithwaitingperiodsgreaterthan4monthsgenerallyindicatedthatemployeeshadtrainingor orientationperiods,ormeasurementperiodsinwhichtheywereemployeesbutwerenoteligibleforhealth beneﬁts. Someemployershavemeasurementperiodstodeterminewhethervariablehouremployeeswillmeet 4 therequirementsfortheﬁrm’shealthbeneﬁts. 3 Variable houremployeesmayhaveameasurementperiodofupto12monthsbeforeitisdeterminediftheyareeligibleforbeneﬁts. Employers mayrequireacumulativeservicerequirementofupto1,200hoursbeforeanemployeemayenroll. FederalRegister. Vol. 79,No. 36. Feb12,2014. https://www.gpo.gov/fdsys/pkg/FR-2014-02-24/pdf/2014-03809.pdf 4 UndertheACA,employersmaydeterminewhetherornotanemployeeisafull-timeemployeebylookingbackatthenumberofhoursanemployeehas workedduringadeﬁnedperiod. Seehttps://www.irs.gov/affordable-care-act/employers/identifying-full-time-employees The Kaiser Family Foundation and Health Research & Educational Trust / Page 61

SECTION3. EMPLOYEECOVERAGE,ELIGIBILITY,ANDPARTICIPATION The Kaiser Family Foundation and Health Research & Educational Trust / Page 62

SECTION3. EMPLOYEECOVERAGE,ELIGIBILITY,ANDPARTICIPATION AUTOENROLLMENT • Thirty-onepercentofﬁrmsoﬀeringhealthbeneﬁts,including35%ofﬁrmswith3to49workersand18%ofﬁrmswith 5,000ormoreworkers,automaticallyenrolleligibleworkersinhealthbeneﬁtsafteranyapplicablewaitingperiod [Figure 3.10]. The Kaiser Family Foundation and Health Research & Educational Trust / Page 63

53% $6,690 Employer Health Benefits 2017 ANNUAL SURVEY Types of Plans Offered section 4 $18,7642017

SECTION4. TYPESOFPLANSOFFERED Section4 TypesofPlansOﬀered Mostﬁrmsthatoﬀerhealthbeneﬁtsoﬀeronlyonetypeofhealthplan(81%). Largeﬁrms(200ormoreworkers)aremorelikely tooﬀermorethanonetypeofhealthplanthansmallﬁrms(3-199workers). FirmsaremostlikelytooﬀertheirworkersaPPO planandareleastlikelytooﬀeraconventionalplan(sometimesknownasindemnityinsurance). • Eighty-onepercentofﬁrmsoﬀeringhealthbeneﬁtsin2017oﬀeronlyonetypeofhealthplan. Largeﬁrmsaremore likely to oﬀer more than one plan type than small ﬁrms (55%vs.17%)[Figure4.1]. • Thepercentageofcoveredworkersatﬁrmsthatoﬀermultipleplantypescanalsobeanalyzed. Fifty-eightpercentof coveredworkersareemployedinaﬁrmthatoﬀersmorethanonehealthplantype. Seventypercentofcoveredworkers in large ﬁrms are employedbyaﬁrmthatoﬀersmorethanoneplantype,comparedto30%insmallﬁrms[Figure4.2]. • Aboutthree-quarters(73%)ofcoveredworkersinﬁrmsoﬀeringhealthbeneﬁtsworkinﬁrmsthatoﬀeroneormorePPO plans; 57%workinﬁrmsthatoﬀeroneormoreHDHP/SOplans;33%workinﬁrmsthatoﬀeroneormoreHMOplans; 15%workinﬁrmsthatoﬀeroneormorePOSplans;and1%workinﬁrmsthatoﬀeroneormoreconventionalplans 1 [Figure 4.4]. • Amongcoveredworkersinﬁrmsoﬀeringonlyonetypeofhealthplan,thoseinlargeﬁrmsaremorelikelytobeoﬀered anHDHP/SO(36%)thanthoseinsmallﬁrms(23%). Coveredworkersinsmallﬁrmsoﬀeringonlyonetypeofplanare morelikelytobeoﬀeredaPOSplanthancoveredworkersinlargeﬁrms(19%vs.2%)[Figure4.5]. • Amongcoveredworkersinﬁrmsoﬀeringonlyonetypeofhealthplan,30%areinﬁrmsthatonlyoﬀeranHDHP/SOand 52%areinﬁrmsthatonlyoﬀeraPPO[Figure4.5]. 1 Starting in 2010, we included ﬁrms that said they oﬀer a plan type even if there are no covered workers enrolled in that plan type. The Kaiser Family Foundation and Health Research & Educational Trust / Page 65

SECTION4. TYPESOFPLANSOFFERED The Kaiser Family Foundation and Health Research & Educational Trust / Page 66

SECTION4. TYPESOFPLANSOFFERED The Kaiser Family Foundation and Health Research & Educational Trust / Page 67

SECTION4. TYPESOFPLANSOFFERED The Kaiser Family Foundation and Health Research & Educational Trust / Page 68

SECTION4. TYPESOFPLANSOFFERED Thesurveycollectsinformationonaﬁrm’splanwiththelargestenrollmentineachoftheplantypes. Whileweknowthe numberofplantypesaﬁrmhas,wedonotknowthetotalnumberofplansaﬁrmoﬀersworkers. Inaddition,ﬁrmsmayoﬀer diﬀerenttypesofplanstodiﬀerentworkers. Forexample,someworkersmightbeoﬀeredonetypeofplanatonelocation, whileworkersatanotherlocationareoﬀeredadiﬀerenttypeofplan. HMO isahealthmaintenanceorganization. ThesurveydeﬁnesanHMOasaplanthatdoesnotcovernon-emergency out-of-networkservices. PPO isapreferredproviderorganization. ThesurveydeﬁnesPPOsasplansthathavelowercostsharingforin-network providerservices,anddonotrequireaprimarycaregatekeepertoscreenforspecialistandhospitalvisits. POS isapoint-of-serviceplan. ThesurveydeﬁnesPOSplansasthosethathavelowercostsharingforin-networkprovider services, but do require a primary care gatekeeper to screen for specialist and hospital visits. HDHP/SO isahigh-deductiblehealthplanwithasavingsoptionsuchasanHRAorHSA.ThesurveytreatsHDHP/SOsasa distinct plan type even if the plan would otherwise be considered a PPO, HMO,POSplan,orindemnityplan. The Kaiser Family Foundation and Health Research & Educational Trust / Page 69

53% $6,690 Employer Health Benefits 2017 ANNUAL SURVEY Market Shares of Health Plans section 5 $18,7642017

SECTION5. MARKETSHARESOFHEALTHPLANS Section5 MarketSharesofHealthPlans ThelargestshareofcoveredworkersisenrolledinPPOs,covering48%ofcoveredworkers,followedbyHDHP/SOs,HMOs, POSplans,andconventionalplans. Enrollmentdistributionvariesbyﬁrmsize: HDHP/SOshavearelativelyhighershare of enrollmentamonglargeﬁrms(200ormoreworkers)thansmallﬁrms(3-199workers)(30%vs.23%),andPOSplansare relatively more popular amongsmallﬁrmsthanlargeﬁrms(18%vs.6%). • Forty-eightpercentofcoveredworkersareenrolledinPPOs,followedbyHDHP/SOs(28%),HMOs(14%),POSplans (10%),andconventionalplans(<1%)[Figure5.1]. • ThepercentageofcoveredworkersenrolledinHDHP/SOsissimilartolastyear. • AlargershareofcoveredworkersareenrolledinHDHP/SOsthaninHMOsinbothsmallﬁrmsandlargeﬁrms. • Planenrollmentpatternsvarybyﬁrmsize. – CoveredworkersinlargeﬁrmsaremorelikelythancoveredworkersinsmallﬁrmstoenrollinHDHP/SOs(30% vs. 23%). CoveredworkersinsmallﬁrmsaremorelikelythancoveredworkersinlargeﬁrmstoenrollinPOSplans (18%vs.6%)[Figure5.2]. • Planenrollmentpatternsalsodiﬀeracrossregions. – HMOenrollmentissigniﬁcantlyhigherintheWest(29%)andsigniﬁcantlylowerintheSouth(10%)andMidwest (8%)[Figure5.3]. – CoveredworkersintheSouth(54%)aremorelikelytobeenrolledinPPOsthanworkersinotherregions,while coveredworkersintheWest(39%)arelesslikelytobeenrolledinaPPO[Figure5.3]. – CoveredworkersintheMidwest(36%)aremorelikelytobeenrolledinHDHP/SOsthanworkersinotherregions, whilecoveredworkersintheSouth(23%)arelesslikelytobeenrolledinHDHP/SOs[Figure5.3]. The Kaiser Family Foundation and Health Research & Educational Trust / Page 71

SECTION5. MARKETSHARESOFHEALTHPLANS The Kaiser Family Foundation and Health Research & Educational Trust / Page 72

SECTION5. MARKETSHARESOFHEALTHPLANS The Kaiser Family Foundation and Health Research & Educational Trust / Page 73

53% $6,690 Employer Health Benefits 2017 ANNUAL SURVEY Worker and Employer Contributions for Premiums section 6 $18,7642017

SECTION6. WORKERANDEMPLOYERCONTRIBUTIONSFORPREMIUMS Section6 WorkerandEmployerContributionsfor Premiums 1 In 2017, premiumcontributionsbycoveredworkersaverage18%forsinglecoverageand31%forfamilycoverage. The averagemonthlyworkercontributionsare$101forsinglecoverage($1,213annually)and$476forfamilycoverage($5,714 2 annually). Coveredworkersinsmallﬁrms(3-199workers)havealoweraveragecontributionamountforsinglecoverage ($1,030vs. $1,289), but a higher average contribution amountforfamilycoverage($6,814vs. $5,264)thancoveredworkersin large ﬁrms(200ormoreworkers). • In 2017, coveredworkersonaveragecontribute18%ofthepremiumforsinglecoverageand31%ofthepremiumfor familycoverage[Figure6.1]. Theaveragecontributionpercentageforsinglecoveragehasremainedstableinrecent years. The averagecontributionpercentageforfamilycoverageishigherin2017thanin2012(31%vs.28%). – Coveredworkersinsmallﬁrmsonaveragecontributealowerpercentageofthepremiumforsinglecoverage(16% vs. 19%) andahigherpercentageofthepremiumforfamilycoverage(39%vs.28%)thancoveredworkersinlarge ﬁrms[Figure6.24]. • Workerswithsinglecoveragehaveanaveragecontributionof$101permonth($1,213annually),andworkerswith familycoveragehaveanaveragecontributionof$476permonth($5,714annually)towardtheirhealthinsurance premiums[Figures6.2,6.3,and6.4]. – TheaverageworkercontributionsinHDHP/SOsarelowerthantheoverallaverageworkercontributionforsingle coverage($1,020vs. $1,213)andfamilycoverage($4,599vs. $5,714)[Figure6.5]. • Workercontributionsalsodiﬀerbyﬁrmsize. Asinpreviousyears,workersinsmallﬁrmsonaveragecontributealower amountannuallyforsinglecoveragethanworkersinlargeﬁrms($1,030vs. $1,289). Incontrast,workersinsmallﬁrms onaveragecontributesigniﬁcantlymoreannuallyforfamilycoveragethanworkersinlargeﬁrms($6,814vs. $5,264) [Figure 6.6]. • Theaverageworkercontributionsforsingleandfamilycoverageinsmallﬁrmsandforsinglecoverageinlargeﬁrmsare similar to last year. The average worker contribution for family coverage in large ﬁrms increased from $4,719 to $5,264 [Figures 6.8 and 6.9]. 1 Estimatesforpremiums,workercontributionstopremiums,andemployercontributionstopremiumspresentedinSection6donotincludecontributions madebytheemployertoHealthSavingsAccounts(HSAs)orHealthReimbursementArrangements(HRAs). SeeSection8forestimatesofemployer contributionstoHSAsandHRAs. 2 Theaveragepercentcontributioniscalculatedasaweightedaverageofallaﬁrm’splantypesandmaynotnecessarilyequaltheaverageworkercontribution dividedbytheaveragepremium. The Kaiser Family Foundation and Health Research & Educational Trust / Page 75

SECTION6. WORKERANDEMPLOYERCONTRIBUTIONSFORPREMIUMS The Kaiser Family Foundation and Health Research & Educational Trust / Page 76

SECTION6. WORKERANDEMPLOYERCONTRIBUTIONSFORPREMIUMS The Kaiser Family Foundation and Health Research & Educational Trust / Page 77

SECTION6. WORKERANDEMPLOYERCONTRIBUTIONSFORPREMIUMS The Kaiser Family Foundation and Health Research & Educational Trust / Page 78

SECTION6. WORKERANDEMPLOYERCONTRIBUTIONSFORPREMIUMS The Kaiser Family Foundation and Health Research & Educational Trust / Page 79

SECTION6. WORKERANDEMPLOYERCONTRIBUTIONSFORPREMIUMS The Kaiser Family Foundation and Health Research & Educational Trust / Page 80

SECTION6. WORKERANDEMPLOYERCONTRIBUTIONSFORPREMIUMS The Kaiser Family Foundation and Health Research & Educational Trust / Page 81

SECTION6. WORKERANDEMPLOYERCONTRIBUTIONSFORPREMIUMS The Kaiser Family Foundation and Health Research & Educational Trust / Page 82

SECTION6. WORKERANDEMPLOYERCONTRIBUTIONSFORPREMIUMS The Kaiser Family Foundation and Health Research & Educational Trust / Page 83

SECTION6. WORKERANDEMPLOYERCONTRIBUTIONSFORPREMIUMS The Kaiser Family Foundation and Health Research & Educational Trust / Page 84

SECTION6. WORKERANDEMPLOYERCONTRIBUTIONSFORPREMIUMS VARIATIONINWORKERCONTRIBUTIONSTOTHEPREMIUM • Aboutfour-ﬁfthsofcoveredworkersareinaplanwheretheemployercontributesatleasthalfofthepremiumforboth single andfamilycoverage. – Fourteenpercentofcoveredworkersareinaplanwheretheemployerpaystheentirepremiumforsingle coverage;3%ofcoveredworkersareinaplanwheretheemployerpaystheentirepremiumforfamilycoverage [Figure 6.18]. • Coveredworkersinsmallﬁrmsaremuchmorelikelythancoveredworkersinlargeﬁrmstobeinaplanwherethe employerpays100%ofthepremium. Thirty-threepercentofcoveredworkersinsmallﬁrmshaveanemployerthat paysthefullpremiumforsinglecoverage,comparedto6%ofcoveredworkersinlargeﬁrms[Figure6.17]. Forfamily coverage,10%ofcoveredworkersinsmallﬁrmshaveanemployerthatpaysthefullpremium,comparedto1%of coveredworkersinlargeﬁrms[Figure6.16]. • Sixteenpercentofcoveredworkersareinaplanwhereenrolleeshaveacontributionofmorethan50%ofthepremium for family coverage [Figure 6.18]. The Kaiser Family Foundation and Health Research & Educational Trust / Page 85

SECTION6. WORKERANDEMPLOYERCONTRIBUTIONSFORPREMIUMS – Thirty-six percent of covered workers in small ﬁrms work in a ﬁrm wheretheenrolleecontributionforfamily coverageismorethan50%ofthepremium,comparedto8%ofcoveredworkersinlargeﬁrms[Figure6.18]. – Forsinglecoverage,3%ofcoveredworkersinsmallﬁrmsand2%ofcoveredworkersinlargeﬁrmsareinaplan wheretheenrolleecontributionforfamilycoverageismorethan50%ofthepremium. Thediﬀerencebetweenthe estimatesforsmallandlargeﬁrmsisnotstatisticallysigniﬁcant[Figure6.18]. • Thereissubstantialvariationamongworkersinsmallﬁrmsandworkersinlargeﬁrmsinthedollaramountsthey contributeforsingleandfamilycoverage. Forexample,amongcoveredworkersinsmallﬁrms,10%haveno contributionforfamilycoverage,while19%haveacontributionofmorethan$12,000. Amongcoveredworkersinlarge ﬁrms,1%havenocontributionforfamilycoverage,while4%haveacontributionofmorethan$12,000[Figure6.16]. The Kaiser Family Foundation and Health Research & Educational Trust / Page 86

SECTION6. WORKERANDEMPLOYERCONTRIBUTIONSFORPREMIUMS The Kaiser Family Foundation and Health Research & Educational Trust / Page 87

SECTION6. WORKERANDEMPLOYERCONTRIBUTIONSFORPREMIUMS The Kaiser Family Foundation and Health Research & Educational Trust / Page 88

SECTION6. WORKERANDEMPLOYERCONTRIBUTIONSFORPREMIUMS DIFFERENCESBYFIRMCHARACTERISTICS • Thepercentageofthepremiumpaidbycoveredworkersalsovariesbyﬁrmcharacteristics. – Coveredworkersinﬁrmswitharelativelylargeshareoflower-wageworkers(whereatleast35%ofworkersearn $24,000ayearorless)onaveragehavehighercontributionratesforsinglecoverage(23%vs.18%)andfamily coverage(37%vs.31%)thanthoseinﬁrmswithasmallershareoflower-wageworkers[Figures6.22and6.23]. – Coveredworkersinﬁrmswitharelativelylargeshareofhigher-wageworkers(whereatleast35%earn$60,000or moreannually)onaveragehavelowercontributionratesforfamilycoveragethanthoseinﬁrmswithasmaller shareofhigher-wageworkers(29%vs.34%)[Figure6.23]. – Coveredworkersinlargeﬁrmsthathaveatleastsomeunionworkersonaveragehavelowercontributionratesfor familycoveragethanthoseinﬁrmswithoutanyunionworkers(25%vs.30%)[Figures6.23]. – Coveredworkersinlargeﬁrmsthatarepartiallyorcompletelyself-fundedonaveragehavelowercontribution 3 rates for family coverage than workers in large ﬁrms that are fully insured (26% vs. 35%) [Figure 6.23]. – Coveredworkersinprivatefor-proﬁtﬁrmsonaveragehavehighercontributionratesforbothsinglecoverage (21%)andfamilycoverage(33%)thanworkersinpublicorganizationsandprivatenot-for-proﬁtﬁrms[Figures6.22 and6.23]. 3 FordeﬁnitionsofSelf-FundedandFully-Insuredplans,seetheintroductiontoSection10. The Kaiser Family Foundation and Health Research & Educational Trust / Page 89

SECTION6. WORKERANDEMPLOYERCONTRIBUTIONSFORPREMIUMS The Kaiser Family Foundation and Health Research & Educational Trust / Page 90

SECTION6. WORKERANDEMPLOYERCONTRIBUTIONSFORPREMIUMS The Kaiser Family Foundation and Health Research & Educational Trust / Page 91

SECTION6. WORKERANDEMPLOYERCONTRIBUTIONSFORPREMIUMS The Kaiser Family Foundation and Health Research & Educational Trust / Page 92

SECTION6. WORKERANDEMPLOYERCONTRIBUTIONSFORPREMIUMS The Kaiser Family Foundation and Health Research & Educational Trust / Page 93

SECTION6. WORKERANDEMPLOYERCONTRIBUTIONSFORPREMIUMS CONTRIBUTIONAPPROACHES • Firmstakediﬀerentapproachesforcontributingtowardfamilycoverage. Amongﬁrmsoﬀeringhealthbeneﬁts,45%of smallﬁrmsand15%oflargeﬁrmscontributethesamedollaramountforsinglecoverageasforfamilycoverage,which meansthattheworkermustpaytheentirediﬀerencebetweenthecostofsingleandfamilycoverageiftheywishto enroll their family members. Forty-ﬁve percent of small ﬁrms and 75%oflargeﬁrmsmakealargerdollarcontributionfor familycoveragethanforsinglecoverage[Figure6.27]. The Kaiser Family Foundation and Health Research & Educational Trust / Page 94

SECTION6. WORKERANDEMPLOYERCONTRIBUTIONSFORPREMIUMS CHANGESOVERTIME • Theaverageworkercontributionsforsingleandfamilycoveragehaveincreased75%and74%,respectively,overthelast 10years,and28%and32%,respectively,overthelastﬁveyears. • Overthelastﬁveyears,theaverageworkercontributionforfamilycoveragehasincreasedfasterthantheaverage employercontributionforfamilycoverage(32%vs.14%)andthelasttenyears(74%vs.48%). The Kaiser Family Foundation and Health Research & Educational Trust / Page 95

SECTION6. WORKERANDEMPLOYERCONTRIBUTIONSFORPREMIUMS The Kaiser Family Foundation and Health Research & Educational Trust / Page 96

53% $6,690 Employer Health Benefits 2017 ANNUAL SURVEY Employee Cost Sharing section 7 $18,7642017

SECTION7. EMPLOYEECOSTSHARING Section7 EmployeeCostSharing In addition to any required premiumcontributions,mostcoveredworkersfacecostsharingforthemedicalservicestheyuse. Costsharingformedicalservicescantakeavarietyofforms,includingdeductibles(anamountthatmustbepaidbeforemost services are covered by the plan), copayments(ﬁxeddollaramounts),andcoinsurance(apercentageofthechargeforservices). Thetypeandlevelofcostsharingoftenvarybythetypeofplaninwhichtheworkerisenrolled. Costsharingmayalsovaryby thetypeofservice,suchasoﬃcevisits,hospitalizations,orprescriptiondrugs. Thecost-sharingamountsreportedhereareforcoveredworkersusingservicesprovidedin-networkbyparticipatingproviders. Planenrolleesreceivingservicesfromprovidersthatdonotparticipateinplannetworksoftenfacehighercostsharingand mayberesponsibleforchargesthatexceedplanallowableamounts. Theframeworkofthissurveydoesnotallowustocapture all of the complex cost-sharing requirementsinmodernplans,particularlyforancillaryservices(suchasdurablemedical equipmentorphysicaltherapy)orcost-sharingarrangementsthatvaryacrossdiﬀerentsettings(suchastierednetworks). Therefore, wedonotcollectinformationonallplanprovisionsandlimitsthataﬀectenrolleeout-of-pocketliability. GENERALANNUALDEDUCTIBLESFORWORKERSINPLANSWITHDEDUCTIBLES • Ageneralannualdeductibleisanamountthatmustbepaidbyenrolleesbeforemostservicesarecoveredbytheir healthplan. Non-grandfatheredhealthplansarerequiredtocoversomeservicessuchaspreventivecarewithoutcost sharing. Someplansrequireenrolleestomeetaservice-speciﬁcdeductible,suchasonprescriptiondrugsorhospital admissions,inlieuoforinadditiontoageneralannualdeductible. – Eighty-onepercentofcoveredworkersareenrolledinaplanwithageneralannualdeductibleforsinglecoverage, similar to 83% in 2016, but an increase from 72% in 2012 [Figure 7.2]. – Thepercentageofcoveredworkersenrolledinaplanwithageneralannualdeductibleforsinglecoverageis similar for small ﬁrms (3-199 workers) and large ﬁrms (200 or more workers) (77% and 83%) [Figure 7.2]. – Thelikelihoodofhavingadeductiblevariesbyplantype[Figure7.1]. CoveredworkersinHMOsarelesslikely tohaveageneralannualdeductibleforsinglecoveragethanworkersinotherplantypes. Sixty-twopercentof workersinHMOsdonothaveageneralannualdeductibleforsinglecoverage,comparedto35%ofworkersinPOS plansand14%ofworkersinPPOs. • Forcoveredworkersinaplanwithageneralannualdeductible,theaverageannualdeductibleforsinglecoverageis $1,505,similartotheaveragedeductible($1,478)lastyear[Figures7.3and7.10]. – Forcoveredworkersinplanswithageneralannualdeductible,theaveragedeductiblesforsinglecoverageare $1,175inHMOs,$1,046inPPOs,$1,301inPOSplans,and$2,304inHDHP/SOs[Figure7.6]. – Theaveragedeductiblesforsinglecoveragearehigheracrossplantypesforcoveredworkersinsmallﬁrmsthan for coveredworkersinlargeﬁrms. ForcoveredworkersinPPOswithageneralannualdeductible,forexample,the averagedeductibleamountforsinglecoverageinsmallﬁrmsismuchhigherthantheaveragedeductibleamount in large ﬁrms ($1,594 vs. $856) [Figure 7.6]. Overall, for covered workers in plans with a general annual deductible, theaveragedeductibleamountforsinglecoverageinsmallﬁrmsishigherthantheaveragedeductibleamountin large ﬁrms($2,120vs. $1,276)[Figure7.3]. – Amongcoveredworkersinplanswithageneralannualdeductible,theaveragedeductibleforworkersinﬁrms witharelativelylargeshareoflower-wageworkers(whereatleast35%ofworkersearn$24,000ayearorless) The Kaiser Family Foundation and Health Research & Educational Trust / Page 98

SECTION7. EMPLOYEECOSTSHARING is higher than the average deductible for covered workers in ﬁrms with a smaller share of lower-wage workers ($2,234vs. $1,449)[Figure7.4]. – Theaveragegeneralannualdeductibleforsinglecoverageforcoveredworkersinplanswithadeductiblehas increased37%overthelastﬁveyears,from$1,097in2012to$1,505in2017[Figure7.8]. • Thereisconsiderablevariationinthedollarvaluesofgeneralannualdeductiblesforcoveredworkersatdiﬀerentﬁrms. Forexample,20%ofcoveredworkersenrolledinaPPOplanwithageneralannualdeductibleforsinglecoveragehavea deductibleoflessthan$500,while13%haveadeductibleof$2,000ormore[Figure7.19]. The Kaiser Family Foundation and Health Research & Educational Trust / Page 99

SECTION7. EMPLOYEECOSTSHARING The Kaiser Family Foundation and Health Research & Educational Trust / Page 100

SECTION7. EMPLOYEECOSTSHARING The Kaiser Family Foundation and Health Research & Educational Trust / Page 101

SECTION7. EMPLOYEECOSTSHARING The Kaiser Family Foundation and Health Research & Educational Trust / Page 102

SECTION7. EMPLOYEECOSTSHARING The Kaiser Family Foundation and Health Research & Educational Trust / Page 103

SECTION7. EMPLOYEECOSTSHARING The Kaiser Family Foundation and Health Research & Educational Trust / Page 104

SECTION7. EMPLOYEECOSTSHARING GENERALANNUALDEDUCTIBLESAMONGALLCOVEREDWORKERS • Asdiscussedabove,theshareofcoveredworkersinplanswithageneralannualdeductiblehasincreasedsigniﬁcantly overtime: from59%in2007,to72%in2012,to81%in2017[Figure7.2],ashavetheaveragedeductibleamountsfor coveredworkersinplanswithdeductibles: from$616in2007,to$1,097in2012,to$1,505in2017[Figure7.10]. Neither trendbyitselfcapturesthefullimpactofchangesindeductiblesoncoveredworkers. Wecanlookattheaverageimpact of bothtrendstogetheroncoveredworkersbyassigningazerodeductiblevaluetocoveredworkersinplanswithno deductibleandlookingathowtheresultingaverageschangeovertime. Theseaveragedeductibleamountsarelowerin anygivenyearbutthechangesovertimereﬂectboththehigherdeductiblesinplanswithdeductiblesandthefactthat moreworkersfacethem. – Usingthisapproach,theaveragegeneralannualdeductibleforsinglecoverageforallcoveredworkersin2017is $1,221[Figures7.9and7.10]. – The2017valueis52%higherthantheaveragegeneralannualdeductibleof$802in2012and255%higherthan theaveragegeneralannualdeductibleof$343in2007[Figures7.9and7.10]. The Kaiser Family Foundation and Health Research & Educational Trust / Page 105

SECTION7. EMPLOYEECOSTSHARING • Anotherwaytolookatdeductiblesisthepercentageofallcoveredworkerswhoareinaplanwithadeductiblethat exceedscertainthresholds. Fifty-onepercentofcoveredworkersareinplanswithageneralannualdeductibleof$1,000 ormoreforsinglecoverage,thesamepercentageaslastyear[Figure7.12]. – Overthelastﬁveyears,thepercentageofcoveredworkerswithageneralannualdeductibleof$1,000ormorefor single coveragehasgrownsubstantially,increasingfrom34%to51%[Figure7.12]. – Workersinsmallﬁrmsaremorelikelytohaveageneralannualdeductibleof$1,000ormoreforsinglecoverage thanworkersinlargeﬁrms(58%vs.48%)[Figure7.11]. – Twenty-twopercentofcoveredworkersareenrolledinaplanwithadeductibleof$2,000ormore,similartothe percentagelastyear(23%)[Figure7.14]. Thirty-sevenpercentofcoveredworkersinsmallﬁrmshaveageneral annualdeductibleof$2,000ormore,ascomparedto15%inlargeﬁrms[Figure7.14]. • OneofthereasonsforthegrowthindeductibleamountshasbeenthegrowthinenrollmentinHDHP/SOs,which havehigherdeductiblesthanotherplans. Whilegrowingdeductiblesinotherplantypesgenerallyincreasesenrollee out-of-pocketliability, the shift in enrollment to HDHP/SOs does not necessarily do so because most HDHP/SOenrollees receiveanaccountcontributionfromtheiremployers,whichinessencereducesthehighcostsharingintheseplans. – Twenty-onepercentofcoveredworkersinanHDHPwithanHRAand2%ofcoveredworkersinanHSA-qualiﬁed HDHPreceiveanaccountcontributionforsinglecoverageatleastequaltotheirdeductible,whileanother35%of coveredworkersinanHDHPwithanHRAand30%ofcoveredworkersinanHSA-qualiﬁedHDHPreceiveaccount contributionsthat,if applied to their deductible, would reduce the deductible to $1,000 or less [Figure 7.16]. – If wereducethedeductiblesthatworkersfacebyemployeraccountcontributions,thepercentageofcovered workerswithadeductibleliabilityof$1,000ormorewouldbereducedfrom51%to40%[Figures7.12and7.13]. The Kaiser Family Foundation and Health Research & Educational Trust / Page 106

SECTION7. EMPLOYEECOSTSHARING The Kaiser Family Foundation and Health Research & Educational Trust / Page 107

SECTION7. EMPLOYEECOSTSHARING The Kaiser Family Foundation and Health Research & Educational Trust / Page 108

SECTION7. EMPLOYEECOSTSHARING The Kaiser Family Foundation and Health Research & Educational Trust / Page 109

SECTION7. EMPLOYEECOSTSHARING The Kaiser Family Foundation and Health Research & Educational Trust / Page 110

SECTION7. EMPLOYEECOSTSHARING The Kaiser Family Foundation and Health Research & Educational Trust / Page 111

SECTION7. EMPLOYEECOSTSHARING GENERALANNUALDEDUCTIBLESFORWORKERSENROLLEDINFAMILYCOVERGE • Forfamilycoverage,themajorityofcoveredworkerswithgeneralannualdeductibleshaveanaggregatedeductible, whichmeansthatallfamilymembers’out-of-pocketexpensescounttowardmeetingthedeductibleamount. Among coveredworkersinaplanwithfamilycoverage,thepercentagesofcoveredworkerswithanaverageaggregategeneral annualdeductibleare24%forworkersinHMOs,50%forworkersinPPOs,and43%forworkersinPOSplans[Figure 7.20]. – Theaveragedeductibleamountsforcoveredworkerswithanaggregatedeductibleforfamilycoverageare$2,732 for HMOs,$2,503forPPOs,$2,697forPOSplans,and$4,527forHDHP/SOs[Figure7.21]. Deductibleamountsfor aggregatefamilydeductiblesaresimilartolastyearforplantypesotherthanPPOs. • Theothertypeoffamilydeductible,aseparateper-persondeductible,requireseachfamilymembertomeetaseparate per-persondeductibleamountbeforetheplancoversexpensesforthatmember. Abouttwo-thirdsofcoveredworkers in plans with separate per-person family deductibles (68%) consider the deductible met for all family members if a 1 prescribednumberoffamilymemberseachreacheshisorherseparatedeductibleamounts[Figure7.24]. Plansmay also require each family membertomeetaseparateper-persondeductibleuntilthefamily’scombinedspending reachesaspeciﬁeddollaramount. – Forcoveredworkersinhealthplansthathaveseparateper-persongeneralannualdeductibleamountsforfamily coverage,theaveragedeductiblesare$1,045forHMOs,$914forPPOs,$1,128forPOSplans,and$2,645for HDHP/SOs[Figure7.21]. 1 Someworkerswithseparateper-persondeductiblesorout-of-pocketmaximumsforfamilycoveragedonothaveaspeciﬁcnumberoffamilymembersthat arerequiredtomeetthedeductibleamountandinsteadhaveanothertypeoflimit,suchasaper-personamountwithatotaldollaramountlimit. These responsesareincludedintheaveragesanddistributionsforseparatefamilydeductiblesandout-of-pocketmaximums. The Kaiser Family Foundation and Health Research & Educational Trust / Page 112

SECTION7. EMPLOYEECOSTSHARING – Mostcoveredworkersinplanswithaseparateper-persongeneralannualdeductibleforfamilycoveragehavea limit to the numberoffamilymembersrequiredtomeettheseparatedeductibleamounts[Figure7.24]. Among thosecoveredworkersinplanswithalimitonthenumberoffamilymembers,themostfrequentnumberoffamily membersrequiredtomeettheseparatedeductibleamountsistwo(39%)[Figure7.25]. • Forcoveredworkersinplanswithanaggregatedeductibleforfamilycoverage,theaverageannualfamilydeductiblesin smallﬁrmsarehigherthantheaverageannualfamilydeductiblesinlargeﬁrmsacrossplantypes[Figure7.21]. The Kaiser Family Foundation and Health Research & Educational Trust / Page 113

SECTION7. EMPLOYEECOSTSHARING The Kaiser Family Foundation and Health Research & Educational Trust / Page 114

SECTION7. EMPLOYEECOSTSHARING The Kaiser Family Foundation and Health Research & Educational Trust / Page 115

SECTION7. EMPLOYEECOSTSHARING The Kaiser Family Foundation and Health Research & Educational Trust / Page 116

SECTION7. EMPLOYEECOSTSHARING CHARACTERISTICSOFGENERALANNUALDEDUCTIBLES • Themajorityofcoveredworkerswithageneralannualdeductibleareinplanswherethedeductibledoesnothavetobe metbeforecertainservices,suchasphysicianoﬃcevisitsorprescriptiondrugs,arecovered. – Largemajoritiesofcoveredworkers(74%inHMOs,75%inPPOs,and74%inPOSplans)withgeneralannual deductiblesareenrolledinplanswherethedeductibledoesnothavetobemetbeforephysicianoﬃcevisitsfor primarycarearecovered[Figure7.27]. – Similarly, amongworkerswithageneralannualdeductible,largesharesofcoveredworkersinHMOs(96%),PPOs (92%),andPOSplans(94%)areenrolledinplanswherethegeneralannualdeductibledoesnothavetobemet beforeprescriptiondrugsarecovered[Figure7.27]. The Kaiser Family Foundation and Health Research & Educational Trust / Page 117

SECTION7. EMPLOYEECOSTSHARING HOSPITALADMISSIONS,OUTPATIENTSURGERYANDEMERGENCYROOMVISITS • Whetherornotaworkerhasageneralannualdeductible,mostworkersfaceadditionaltypesofcostsharing(such asacopayment,coinsurance,oraperdiemcharge)whenadmittedtoahospitalorhavingoutpatientsurgery. The distribution of workers with cost sharing for hospital admissions, outpatient surgery and emergency roomvisits doesnotequal100%asworkersmayfaceacombinationoftypesofcostsharing. Insomecases,thesecost-sharing arrangementsareverycomplicated;forexampleworkersvisitinganemergencyroommayhavesomeformsof cost-sharingwaivediftheyareadmittedtothehospitalbutstillfaceothercost-sharing. Inaddition,theaverage copaymentandcoinsuranceratesincludeworkerswhomayhaveacombinationofthesetypesofcostsharing. • Beginningthisyear,toreduceburdenonrespondents,werevisedthesurveytoaskrespondentsaboutcostsharingfor inpatient admissions, outpatient surgery and emergencyroomvisitsonlyintheirlargesthealthplantype;previously,we askedforthisinformationforthelargestplanforeachoftheplantypesthattheyoﬀered. Afterreviewingtheresponses andcomparingthemtoprioryearswhereweaskedabouteachplantype,weﬁndthattheinformationwearereceiving is quite similar to responses from previous years. For this reason, we will continue to report our results for these questionsweightedbythenumberofcoveredworkersintherespondingﬁrms. Thereisamoredetaileddiscussionin thesurveydesignandmethodssectiononthistopic. • Forhospitaladmissions,64%ofcoveredworkershavecoinsuranceand12%havecopayments. Lowerpercentages of workershaveperday(perdiem)payments(10%),aseparatehospitaldeductible(1%),orbothacopaymentand coinsurance(6%),while17%havenoadditionalcostsharingforhospitaladmissionsafteranygeneralannualdeductible hasbeenmet[Figure7.28]. – ForcoveredworkersinHMOplans,copaymentsaremorecommon(38%)andcoinsurance(28%)islesscommon thantheaverageforallcoveredworkers[Figure7.28]. – HDHP/SOs,onaverage,haveadiﬀerentcost-sharingstructurethanotherplantypesforhospitaladmissions. Only The Kaiser Family Foundation and Health Research & Educational Trust / Page 118

SECTION7. EMPLOYEECOSTSHARING 1%ofcoveredworkersinHDHP/SOshaveacopaymentforhospitaladmissions,lowerthantheaverageforall coveredworkers[Figure7.28]. – Theaveragecoinsurancerateforahospitaladmissionis19%,theaveragecopaymentis$336perhospital admission,andtheaverageperdiemchargeis$257[Figure7.32]. Ninety-threepercentofworkersenrolledina planwithaperdiemforhospitaladmissionshavealimitonthenumberofdaysaworkermustpaytheamount [Figure 7.33]. • Thecost-sharingprovisionsforoutpatientsurgeryaresimilartothoseforhospitaladmissions,asmostworkershave coinsuranceorcopayments. In2017,19%ofcoveredworkershaveacopaymentand64%havecoinsurancefor outpatientsurgery. Inaddition,6%havebothacopaymentandcoinsurance,while16%havenoadditionalcostsharing after any general annual deductible has beenmet[Figure7.29]. – Forcoveredworkerswithcostsharingforoutpatientsurgery,theaveragecoinsurancerateis19%andtheaverage copaymentis$231[Figure7.32]. • Thelargemajorityofcoveredworkershavecostsharingwhentheyvisitanemergencyroom. In2017,58%percentof coveredworkershaveacopaymentforemergencyroomvisitsand32%haveacoinsurance[Figure7.30]. – Forcoveredworkerswithcostsharingforanemergencyroomvisit,theaveragecoinsurancerateis20%andthe averagecopaymentis$180[Figure7.32]. – AmongcoveredworkersinHDHP/SOplans,21%havenocostsharingforanemergencyroomvisitafterany generalannualdeductiblehasbeenmet,comparedto8%ofcoveredworkersinallplans[Figure7.30]. The Kaiser Family Foundation and Health Research & Educational Trust / Page 119

SECTION7. EMPLOYEECOSTSHARING The Kaiser Family Foundation and Health Research & Educational Trust / Page 120

SECTION7. EMPLOYEECOSTSHARING The Kaiser Family Foundation and Health Research & Educational Trust / Page 121

SECTION7. EMPLOYEECOSTSHARING The Kaiser Family Foundation and Health Research & Educational Trust / Page 122

SECTION7. EMPLOYEECOSTSHARING COSTSHARINGFORPHYSICIANOFFICEVISITS • Themajorityofcoveredworkersareenrolledinhealthplansthatrequirecostsharingforanin-networkphysicianoﬃce 2 visit, in addition to any general annual deductible. – Themostcommonformofphysicianoﬃcevisitcostsharingforin-networkservicesiscopayments. Seventy-one percentofcoveredworkershaveacopaymentforaprimarycarephysicianoﬃcevisitand22%havecoinsurance. Foroﬃcevisitswithaspecialtyphysician,67%ofcoveredworkershavecopaymentsand26%havecoinsurance [Figure 7.36]. – Overthelastﬁveyears,thepercentageofcoveredworkerswithcoinsuranceforoﬃcevisitswithaspecialisthas risen from19%to26%. – CoveredworkersinHMOs,PPOs,andPOSplansaremuchmorelikelytohavecopaymentsforbothprimarycare andspecialtycarephysicianoﬃcevisitsthanworkersinHDHP/SOs. Forprimarycarephysicianoﬃcevisits,62% of coveredworkersinHDHP/SOshavecoinsurance,18%havenocostsharingafterthegeneralannualplan deductibleismet,and18%havecopayments[Figure7.36]. – Amongcoveredworkerswithacopaymentforin-networkphysicianoﬃcevisits,theaveragecopaymentis$25for primarycareand$38forspecialtyphysicianoﬃcevisits[Figure7.37],similartotheamountslastyear. – Amongcoveredworkerswithcoinsuranceforin-networkphysicianoﬃcevisits,theaveragecoinsuranceratesare 19%foravisitwithaprimarycarephysicianand19%foravisitwithaspecialist[Figure7.37],similartotherates 2 Starting in 2010, the survey asked about the prevalence and cost of physician oﬃce visits separately for primary care and specialty care. Prior to the 2010 survey, if the respondent indicated the plan had a copaymentforoﬃcevisits,weassumedtheplanhadacopaymentforbothprimaryandspecialtycarevisits. Thesurveydidnotallowforarespondenttoreportthataplanhadacopaymentforprimarycarevisitsandcoinsuranceforvisitswithaspecialistphysician. Thechangesmadein2010allowforvariationsinthetypeofcostsharingforprimarycareandspecialtycarevisits. Thesurveyincludescostsharingfor in-networkservicesonly. The Kaiser Family Foundation and Health Research & Educational Trust / Page 123

SECTION7. EMPLOYEECOSTSHARING last year. The Kaiser Family Foundation and Health Research & Educational Trust / Page 124

SECTION7. EMPLOYEECOSTSHARING The Kaiser Family Foundation and Health Research & Educational Trust / Page 125

SECTION7. EMPLOYEECOSTSHARING The Kaiser Family Foundation and Health Research & Educational Trust / Page 126

SECTION7. EMPLOYEECOSTSHARING OUT-OF-POCKETMAXIMUMAMOUNTS • Mostcoveredworkersareinaplanthatpartiallyortotallylimitsthecostsharingthataplanenrolleemustpayinayear. Theselimitsaregenerallyreferredtoasout-of-pocketmaximumamounts. TheAﬀordableCareAct(ACA)requiresthat non-grandfatheredhealthplanshaveanout-of-pocketmaximumof$7,150orlessforsinglecoverageand$14,300 3 for family coverage. Manyplanshavecomplexout-of-pocketstructures,whichmakesitdiﬃculttoaccuratelycollect informationonthiselementofplandesign. • In 2017, 98%percentofcoveredworkersareinaplanwithanout-of-pocketmaximumforsinglecoverage. Thisisa signiﬁcantincreasefrom87%in2012[Figure7.42]. • Forcoveredworkersinplanswithout-of-pocketmaximumsforsinglecoverage,thereiswidevariationinspending limits. – Fifteenpercentofcoveredworkersinplanswithanout-of-pocketmaximumforsinglecoveragehavean out-of-pocketmaximumoflessthan$2,000,while21%haveanout-of-pocketmaximumof$6,000ormore[Figure 7.44]. 3 ForthoseenrolledinanHDHP/HSA,theout-of-pocketmaximumis$6,550foranindividualplanand$13,100forafamilyplan. The Kaiser Family Foundation and Health Research & Educational Trust / Page 127

SECTION7. EMPLOYEECOSTSHARING The Kaiser Family Foundation and Health Research & Educational Trust / Page 128

SECTION7. EMPLOYEECOSTSHARING The Kaiser Family Foundation and Health Research & Educational Trust / Page 129

53% $6,690 Employer Health Benefits 2017 ANNUAL SURVEY High-Deductible Health Plans with Savings Option section 8 $18,7642017

SECTION8. HIGH-DEDUCTIBLEHEALTHPLANSWITHSAVINGSOPTION Section8 High-DeductibleHealthPlanswithSavings Option Tohelpcoverout-of-pocketexpensesnotcoveredbyahealthplan,someﬁrmsoﬀerhighdeductibleplansthatarepaired withanaccountthatallowsenrolleestousetax-preferredsavingstopayplancostsharingandotherout-of-pocketmedical expenses. Thetwomostcommonarehealthreimbursementarrangements(HRAs)andhealthsavingsaccounts(HSAs). HRAs andHSAsareﬁnancialaccountsthatworkersortheirfamilymemberscanusetopayforhealthcareservices. Thesesavings arrangementsareoften(or,inthecaseofHSAs,always)pairedwithhealthplanswithhighdeductibles. Thesurveytreats high-deductibleplanspairedwithasavingsoptionasadistinctplantype-High-DeductibleHealthPlanwithSavingsOption (HDHP/SO)-eveniftheplanwouldotherwisebeconsideredaPPO,HMO,POSplan,orconventionalhealthplan. Speciﬁcally for the survey, HDHP/SOsaredeﬁnedas(1)healthplanswithadeductibleofatleast$1,000forsinglecoverageand$2,000for 1 familycoverage oﬀeredwithanHRA(referredtoasHDHP/HRAs);or(2)high-deductiblehealthplansthatmeetthefederal 2 legal requirementstopermitanenrolleetoestablishandcontributetoanHSA(referredtoasHSA-qualiﬁedHDHPs). PERCENTAGEOFFIRMSOFFERINGHDHP/HRASANDHSA-QUALIFIEDHDHPS • Twenty-fourpercentofﬁrmsoﬀeringhealthbeneﬁtsoﬀeranHDHP/HRA,anHSA-qualiﬁedHDHP,orboth. Amongﬁrms oﬀeringhealthbeneﬁts,9%oﬀeranHDHP/HRAand17%oﬀeranHSA-qualiﬁedHDHP[Figure8.1]. Thepercentageof ﬁrmsoﬀeringanHDHP/SOissimilartolastyear. – Largeﬁrms(200ormoreworkers)aremorelikelythansmallﬁrms(3-199workers)tooﬀeranHDHP/SO(53% vs. 23%). [Figure 8.3]. 1 ThereisnolegalrequirementfortheminimumdeductibleinaplanoﬀeredwithanHRA.Thesurveydeﬁnesahigh-deductibleHRAplanasaplanwitha deductibleofatleast$1,000forsinglecoverageand$2,000forfamilycoverage. Federallawrequiresadeductibleofatleast$1,300forsinglecoverageand $2,600forfamilycoverageforHSA-qualiﬁedHDHPsin2017. SeetheTextBoxformoreinformationonHDHP/HRAsandHSA-qualiﬁedHDHPs. 2 ThedeﬁnitionsofHDHP/SOsdonotincludeotherconsumer-drivenplanoptions,suchasarrangementsthatcombineanHRAwithalower-deductiblehealth planorarrangementsinwhichaninsurer(ratherthantheemployerasinthecaseofHRAsortheenrolleeasinthecaseofHSAs)establishesanaccountfor eachenrollee. Otherarrangementsmaybeincludedinfuturesurveysasthemarketevolves. The Kaiser Family Foundation and Health Research & Educational Trust / Page 131

SECTION8. HIGH-DEDUCTIBLEHEALTHPLANSWITHSAVINGSOPTION The Kaiser Family Foundation and Health Research & Educational Trust / Page 132

SECTION8. HIGH-DEDUCTIBLEHEALTHPLANSWITHSAVINGSOPTION ENROLLMENTINFIRMSOFFERINGHDHP/HRASANDHSA-QUALIFIEDHDHPS • EnrollmentinHDHP/SOplanshasincreasedoverthelastﬁveyears,from19%ofcoveredworkersin2012to28%in2017. – NinepercentofcoveredworkersareenrolledinHDHP/HRAsand19%ofcoveredworkersareenrolledin HSA-qualiﬁedHDHPsin2017. Thesepercentagesarethesameasthepercentageslastyear[Figure8.5]. – AhigherpercentageofcoveredworkersinlargeﬁrmsisenrolledinHDHP/SOsthaninsmallﬁrms(30%vs.23%) [Figure 8.6]. The Kaiser Family Foundation and Health Research & Educational Trust / Page 133

SECTION8. HIGH-DEDUCTIBLEHEALTHPLANSWITHSAVINGSOPTION The Kaiser Family Foundation and Health Research & Educational Trust / Page 134

SECTION8. HIGH-DEDUCTIBLEHEALTHPLANSWITHSAVINGSOPTION PREMIUMSANDWORKERCONTRIBUTIONS • Theaverageannualpremiumsin2017forcoveredworkersinHDHP/HRAsare$6,438forsinglecoverageand$18,948for familycoverage[Figure8.7]. TheaverageannualpremiumforsinglecoverageinHDHP/HRAsissigniﬁcantlylessthan theaverageannualpremiumforsinglecoverageforcoveredworkersinplansthatarenotHDHP/SOs[Figure8.8]. • TheaverageannualpremiumforworkersinHSA-qualiﬁedHDHPsis$5,773forsinglecoverageand$16,821forfamily coverage. Theseamountsaresigniﬁcantlylessthantheaveragesingleandfamilypremiumforcoveredworkersinplans thatarenotHDHP/SOs[Figure8.8]. • TheaveragesingleandfamilycoveragepremiumsforcoveredworkersenrolledinHSA-qualiﬁedHDHPsarelowerthan thepremiumsforcoveredworkersenrolledinHDHP/HRAs. • TheaverageannualworkercontributionstopremiumsforworkersenrolledinHDHP/HRAsare$1,216forsingle coverageand$5,130forfamilycoverage[Figure8.7]. • TheaverageannualworkercontributionstopremiumsforworkersinHSA-qualiﬁedHDHPsare$918forsinglecoverage and$4,289forfamilycoverage. Theaveragecontributionsforsingleandfamilycoverageforcoveredworkersin HSA-qualiﬁedHDHPsaresigniﬁcantlylessthantheaveragepremiumcontributionmadebycoveredworkersinplans thatarenotHDHP/SOs[Figure8.8]. The Kaiser Family Foundation and Health Research & Educational Trust / Page 135

SECTION8. HIGH-DEDUCTIBLEHEALTHPLANSWITHSAVINGSOPTION The Kaiser Family Foundation and Health Research & Educational Trust / Page 136

SECTION8. HIGH-DEDUCTIBLEHEALTHPLANSWITHSAVINGSOPTION The Kaiser Family Foundation and Health Research & Educational Trust / Page 137

SECTION8. HIGH-DEDUCTIBLEHEALTHPLANSWITHSAVINGSOPTION The Kaiser Family Foundation and Health Research & Educational Trust / Page 138

SECTION8. HIGH-DEDUCTIBLEHEALTHPLANSWITHSAVINGSOPTION PLANDEDUCTIBLES • Asexpected,workersenrolledinHDHP/SOshavehigherdeductiblesthanworkersenrolledinHMOs,PPOs,orPOSplans. – Theaveragegeneralannualdeductibleforsinglecoverageis$2,129forHDHP/HRAsand$2,433forHSA-qualiﬁed HDHPs[Figure8.14]. Theseaveragesaresimilartotheamountsreportedinrecentyears. Thereiswidevariation aroundtheseaverages: 19%ofcoveredworkersenrolledinanHDHP/SOareinaplanwithadeductibleof$1,000 to$1,499while24%areinaplanwithadeductibleof$3,000ormore[Figure8.13]. • Thesurveyasksﬁrmswhetherthefamilydeductibleamountis(1)anaggregateamount(i.e.,theout-of-pocketexpenses of all family membersarecounteduntilthedeductibleissatisﬁed),or(2)aper-personamountthatappliestoeach familymember(typicallywithalimitonthenumberoffamilymembersthatwouldberequiredtomeetthedeductible amount)(seeSection7formoreinformation). – Theaverageaggregatedeductiblesforworkerswithfamilycoverageare$4,448forHDHP/HRAsand$4,647for HSA-qualiﬁedHDHPs[Figure8.7]. Aswithsinglecoverage,thereiswidevariationaroundtheseaveragesforfamily coverage: 18%ofcoveredworkersenrolledinHDHP/SOswithanaggregatefamilydeductiblehaveadeductible of $2,000to$2,999while22%haveadeductibleof$6,000dollarsormore[Figure8.15]. The Kaiser Family Foundation and Health Research & Educational Trust / Page 139

SECTION8. HIGH-DEDUCTIBLEHEALTHPLANSWITHSAVINGSOPTION OUT-OF-POCKETMAXIMUMAMOUNTS • HSA-qualiﬁedHDHPsarelegallyrequiredtohaveanannualout-of-pocketmaximumofnomorethan$6,550forsingle coverageand$13,100forfamilycoveragein2017. Non-grandfatheredHDHP/HRAplansstartingin2017arerequiredto haveout-of-pocketmaximumsofnomorethan$7,150forsinglecoverageand$14,300forfamilycoverage. Virtuallyall HDHP/HRAplanshaveanoutofpocketmaximumforsinglecoveragein2017. – Theaverageannualout-of-pocketmaximumforsinglecoverageis$4,083forHDHP/HRAsand$4,271for HSA-qualiﬁedHDHPs[Figure8.7]. The Kaiser Family Foundation and Health Research & Educational Trust / Page 140

SECTION8. HIGH-DEDUCTIBLEHEALTHPLANSWITHSAVINGSOPTION EMPLOYERCONTRIBUTIONSTOPREMIUMSANDSAVINGSOPTIONS • EmployerscontributetoHDHP/SOsintwoways: throughtheircontributionstowardthepremiumforthehealthplan andthroughtheircontributions(ifany,inthecaseofHSAs)tothesavingsaccountoption(i.e.,theHRAsorHSAs themselves). – Lookingatonlytheannualemployercontributionstopremiums,coveredworkersinHDHP/HRAsonaverage receiveemployercontributionsof$5,222forsinglecoverageand$13,817forfamilycoverage[Figure8.8]. These amountsaresimilartothecontributionamountslastyear. – TheaverageannualemployercontributionstopremiumsforworkersinHSA-qualiﬁedHDHPsare$4,855for single coverageand$12,532forfamilycoverage,similartothecontributionamountslastyear. Theaverage employercontributionforcoveredworkersinHSA-qualiﬁedHDHPsforsinglecoverageislowerthantheaverage contributionforcoveredworkersinplansthatarenotHDHP/SOs[Figure8.8]. • Lookingatemployercontributionstothesavingsoptions,coveredworkersenrolledinHDHP/HRAsonaveragereceive anannualemployercontributiontotheirHRAof$1,351forsinglecoverageand$2,444forfamilycoverage[Figure8.8]. – HRAsaregenerallystructuredinsuchawaythatemployersmaynotactuallyspendthewholeamountthatthey 3 makeavailabletotheiremployees’HRAs. Amountscommittedtoanemployee’sHRAthatarenotusedbythe employeegenerallyrolloverandcanbeusedinfutureyears,butanybalancemayrevertbacktotheemployer if the employeeleaveshisorherjob. Thus,theemployercontributionamountstoHRAsthatwecaptureinthe surveymayexceedtheamountthatemployerswillactuallyspend. • CoveredworkersenrolledinHSA-qualiﬁedHDHPsonaveragereceiveanannualemployercontributiontotheirHSAof $608forsinglecoverageand$1,086forfamilycoverage[Figure8.8]. Theseamountsdonotincludethe3%ofcovered workersinHSA-qualiﬁedHDHPswhoseemployerssaytheyvaryaccountcontributionsbasedoncertainfactors,suchas jobclassiﬁcationorparticipationinawellnessprogram[Figure8.18]. – Inmanycases,employersthatsponsorHSA-qualiﬁedHDHP/SOsdonotmakecontributionstoHSAsestablished bytheiremployees. Forty-sevenpercentofemployersoﬀeringsinglecoverageand46%oﬀeringfamily coveragethroughHSA-qualiﬁedHDHPsdonotmakecontributionstowardtheHSAsthattheirworkers establish. Twenty-threepercentofworkerswithsinglecoverageand23%ofworkerswithfamilycoverageinan HSA-qualiﬁedHDHPdonotreceiveanaccountcontributionfromtheiremployer[Figures8.16and8.17]. – TheaverageHSAcontributionsreportedaboveincludetheportionofcoveredworkerswhoseemployer contributiontotheHSAiszero. WhenthoseﬁrmsthatdonotcontributetotheHSAareexcludedfromthe calculation, the average employercontributionforcoveredworkersis$795forsinglecoverageand$1,417for familycoverage. – ThepercentageofcoveredworkersenrolledinaplanwheretheemployermakesnoHSAcontributionforsingle andfamilycoverage(23%)issimilartothepercentageinrecentyears. • Employercontributionstosavingsaccountoptions(i.e.,theHRAsandHSAsthemselves)fortheirworkerscanbeadded totheirhealthplanpremiumcontributionstocalculatetotalemployercontributionstowardHDHP/SOs. Wenotethat HRAsareapromisebyanemployertopayuptoaspeciﬁedamountandthatmanyemployeeswillnotreceivethe full amountoftheirHRAinayear,soaddingtheemployerpremiumcontributionamountandtheHRAcontribution representsanupperboundforemployerliabilitythatoverstatestheamountthatisactuallyexpended. Sinceemployer contributionstoemployeeHSAaccountsimmediatelytransferthefullamounttotheemployee,addingemployer premiumandHSAcontributionsisagoodwaytolookattheirtotalliabilityundertheseplans. – ForHDHP/HRAs,theaverageannualtotalemployercontributionforcoveredworkersis$6,573forsinglecoverage and$16,261forfamilycoverage. Theaveragetotalemployercontributionamountsforcoveredworkersforsingle 3 Thesurveyasks“Uptowhatdollaramountdoesyourﬁrmpromisetocontributeeachyeartoanemployee’sHRAorhealthreimbursementarrangementfor single coverage?” WerefertotheamountthattheemployercommitstomakeavailabletoanHRAasacontributionforeaseofdiscussion. Asdiscussed,HRAs arenotionalaccounts,andemployersarenotrequiredtoactuallytransferfundsuntilanemployeeincursexpenses. Thus,employersmaynotexpendthe entire amountthattheycommittomakeavailabletotheiremployeesthroughanHRA.SomeemployersmaymaketheirHRAcontributioncontingenton otherfactors,suchascompletingwellnessprograms. The Kaiser Family Foundation and Health Research & Educational Trust / Page 141

SECTION8. HIGH-DEDUCTIBLEHEALTHPLANSWITHSAVINGSOPTION coverageandfamilycoverageinHDHP/HRAsarehigherthantheaverageamountthatemployerscontribute towardfamilycoverageinhealthplansthatarenotHDHP/SOs[Figure8.8]. – ForHSA-qualiﬁedHDHPs,theaveragetotalannualﬁrmcontributionforcoveredworkersis$5,473forsingle coverageand$13,608forworkerswithfamilycoverage. Theaveragetotalﬁrmcontributionamountsforsingle andfamilycoverageinHSA-qualiﬁedHDHPsaresimilartotheaverageﬁrmcontributionstowardsingleandfamily coverageinhealthplansthatarenotHDHP/SOs[Figure8.8]. • Thereisconsiderablevariationintheamountthatemployerscontributetosavingsaccounts. – Forty-six percentofcoveredworkersinanHDHP/HRAhaveanannualHRAcontributionoflessthan$800,while 22%haveanannualHRAcontributionof$1,600ormore. – Thirty-sevenpercentofcoveredworkersinanHSA-qualiﬁedHDHPhaveanannualHSAcontributionoflessthan $400,including23%thathavenoHSAcontributionfromtheiremployer. Incontrast,12%ofcoveredworkersinan HSA-qualiﬁedHDHPhaveanannualHSAcontributionof$1,200ormore. Thesepercentagesdonotincludethe 3%ofcoveredworkerswithanemployerthatmatchestheirHSAcontribution. The Kaiser Family Foundation and Health Research & Educational Trust / Page 142

SECTION8. HIGH-DEDUCTIBLEHEALTHPLANSWITHSAVINGSOPTION The Kaiser Family Foundation and Health Research & Educational Trust / Page 143

SECTION8. HIGH-DEDUCTIBLEHEALTHPLANSWITHSAVINGSOPTION The Kaiser Family Foundation and Health Research & Educational Trust / Page 144

SECTION8. HIGH-DEDUCTIBLEHEALTHPLANSWITHSAVINGSOPTION The Kaiser Family Foundation and Health Research & Educational Trust / Page 145

SECTION8. HIGH-DEDUCTIBLEHEALTHPLANSWITHSAVINGSOPTION COST-SHARINGFOROFFICE-VISITS • Thecost-sharingpatternforprimarycareoﬃcevisitsdiﬀersforworkersenrolledinHDHP/SOs. Thirty-ninepercentof coveredworkersinHDHP/HRAshaveacopaymentforprimarycarephysicianoﬃcevisitscomparedto7%enrolled in an HSA-qualiﬁedHDHP[Figure8.22]. Workersinotherplantypesaremuchmorelikelytofacecopaymentsthan coinsuranceforphysicianoﬃcevisits(seeSection7formoreinformation). HealthReimbursementArrangements(HRAs) aremedicalcarereimbursementplansestablishedbyemployersthatcan beusedbyemployeestopayforhealthcare. HRAsarefundedsolelybyemployers. Employersmaycommittomakea speciﬁedamountofmoneyavailableintheHRAforpremiumsandmedicalexpensesincurredbyemployeesortheir dependents. HRAsareaccountingdevices,andemployersarenotrequiredtoexpendfundsuntilanemployeeincurs expensesthatwouldbecoveredbytheHRA.UnspentfundsintheHRAusuallycanbecarriedovertothenextyear (sometimeswithalimit). EmployeescannottaketheirHRAbalanceswiththemiftheyleavetheirjob,althoughan employercanchoosetomaketheremainingbalanceavailabletoformeremployeestopayforhealthcare. HRAsoften areoﬀeredalongwithahigh-deductiblehealthplan(HDHP).Insuchcases,theemployeepaysforhealthcareﬁrstfrom his or her HRA andthenout-of-pocketuntilthehealthplandeductibleismet. Sometimescertainpreventiveservicesor otherservicessuchasprescriptiondrugsarepaidforbytheplanbeforetheemployeemeetsthedeductible. HealthSavingsAccounts(HSAs) aresavingsaccountscreatedbyindividualstopayforhealthcare. Anindividualmay establish an HSAifheorsheiscoveredbya“qualiﬁedhealthplan”–aplanwithahighdeductible(i.e.,adeductibleofat least $1,300 for single coverage and $2,600 for family coverage in 2017) that also meets other requirements. Employers canencouragetheiremployeestocreateHSAsbyoﬀeringanHDHPthatmeetsthefederalrequirements. Employersin somecasesalsomayassisttheiremployeesbyidentifyingHSAoptions,facilitatingapplications,ornegotiatingfavorable fees fromHSAvendors. BothemployersandemployeescancontributetoanHSA,uptothestatutorycapof$3,400for single coverageand$6,750forfamilycoveragein2017. EmployeecontributionstotheHSAaremadeonapre-income taxbasis, andsomeemployersarrangefortheiremployeestofundtheirHSAsthroughpayrolldeductions. Employers arenotrequiredtocontributetoHSAsestablishedbytheiremployeesbutiftheyelecttodoso,theircontributionsare nottaxabletotheemployee. InterestandotherearningsonamountsinanHSAarenottaxable. Withdrawalsfromthe HSAbytheaccountownertopayforqualiﬁedhealthcareexpensesarenottaxed. Thesavingsaccountisownedbythe 4 individual whocreatestheaccount,soemployeesretaintheirHSAbalancesiftheyleavetheirjob. 4 SeeU.S.DepartmentoftheTreasury,HealthSavingsAccounts,availableathttp://www.irs.gov/pub/irs-drop/rp-14-30.pdf The Kaiser Family Foundation and Health Research & Educational Trust / Page 146

53% $6,690 Employer Health Benefits 2017 ANNUAL SURVEY Prescription Drug Benefits section 9 $18,7642017

SECTION9. PRESCRIPTIONDRUGBENEFITS Section9 PrescriptionDrugBeneﬁts Almostallcoveredworkershavecoverageforprescriptiondrugs. Overtheyearsthatwehaveconductedthesurvey,coverage for prescriptions has becomemorecomplexasemployersandinsurersexpandedtheuseofformularieswithmultiple cost-sharingtiers as well as other managementapproaches. Collectinginformationaboutthesepracticesischallengingand wasburdensometorespondentswithmultipleplanstoreporton. Beginningin2016,toreduceburdenonrespondents,werevisedthesurveytoaskrespondentsabouttheattributesof prescription drugcoverageonlyintheirlargesthealthplan;previously,weaskedaboutprescriptioncoverageintheirlargest planforeachoftheplantypesthattheyoﬀered. Afterreviewingtheresponsesandcomparingthemtoprioryearswherewe askedabouteachplantype,weﬁndthattheinformationwearereceivingisquitesimilartoresponsesfrompreviousyears. Forthisreason,wewillcontinuetoreportourresultsforthesequestionsweightedbythenumberofcoveredworkersin respondingﬁrms. Thereisamoredetaileddiscussioninthesurveydesignandmethodssectiononthistopic. In addition, because of the signiﬁcant policy interest in access to and the cost of specialty drugs, in 2016 we also began asking employerstoreportseparatelyaboutthecostsharingfortiersthatcoveronlyspecialtydrugs. Incasesinwhichatiercovers onlyspecialtydrugs,wereportitsattributesunderthespecialtybanner,ratherthanasoneofthestandardtiers. Thisentails revising the waywegroupformularytiers: forexample,athree-tierformularywherethethirdtiercoversexclusivelyspecialty drugsisnowconsideratwo-tierplanwithanadditionaltier. Thisapproachallowsustoreportonthecostsharingforspecialty drugsregardlessofthenumberoftiersintheformulary. Forthisreason,wearenotpresentingstatisticalcomparisonsof 1 estimatesrelyingontierstoprioryears. Thischangeisalsodiscussedmorefullyinthesurveydesignandmethodssection. • Nearlyall(99%)coveredworkersworkataﬁrmthatprovidesprescriptiondrugcoverageintheirlargesthealthplan. DISTRIBUTIONOFCOST-SHARING • Alargeshareofcoveredworkers(91%)areinaplanwithatieredcost-sharingformulaforprescriptiondrugs[Figure9.1]. Cost-sharingtiersgenerallyrefertoahealthplanplacingadrugonaformularyorpreferreddruglistthatclassiﬁesdrugs into categories that are subject to diﬀerent cost sharing or management. It is common for there to be diﬀerent tiers for generic, preferred and non-preferred drugs. In recent years, plans have created additional tiers which, for example, maybeusedforlifestyledrugsorexpensivebiologics. Someplansmayhavemultipletiersfordiﬀerentcategories; for example,aplanmayhavepreferredandnon-preferredspecialtytiers. Thesurveyobtainsinformationaboutthe cost-sharingstructureforuptoﬁvetiers. • Eighty-threepercentofcoveredworkersareinaplanwiththree,four,ormoretiersofcostsharingforprescriptiondrugs [Figure 9.1]. These totals include tiers that cover only specialty drugs, even though the cost-sharing information for thosetiersisreportedseparately. – HDHP/SOshaveadiﬀerentcost-sharingpatternforprescriptiondrugsthanotherplantypes. Coveredworkersin HDHP/SOsaremorelikelytobeinaplanwiththesamecostsharingregardlessofdrugtype(15%vs.2%)orin aplanthathasnocostsharingforprescriptionsoncetheplandeductibleismet(13%vs. <1%)ascomparedto coveredworkersinothertypesofplans[Figure9.2]. 1 SeetheMethodsSectionformoreinformation. Incasesinwhichaﬁrmindicatedthatoneoftheirtierswasexclusivelyforspecialtydrugs,wereportedthe cost-sharingstructureandanycopayorcoinsuranceinformationunderthespecialtydrugbanner. Therefore,aﬁrmthathasthreetiersofcostsharingmay onlyhaveplanattributesforthegenericandpreferredtiers. The Kaiser Family Foundation and Health Research & Educational Trust / Page 148

SECTION9. PRESCRIPTIONDRUGBENEFITS The Kaiser Family Foundation and Health Research & Educational Trust / Page 149

SECTION9. PRESCRIPTIONDRUGBENEFITS AVERAGECOST-SHARINGNOTINCLUDINGTIERSEXCLUSIVELYCOVERING SPECIALTYDRUGS • Evenwhenformularytierscoveringonlyspecialtydrugsarenotincluded,alargeshare(77%)ofcoveredworkersareina planwiththreeormoretiersofcostsharingforprescriptiondrugs. Thecost-sharingstatisticspresentedinthissection donotincludeinformationabouttiersthatcoveronlyspecialtydrugs. Incasesinwhichaplancoversspecialtydrugs onatierwithotherdrugs,theywillstillbeincludedintheseaverages. Cost-sharingstatisticsfortierscoveringonly specialty drugs are presented in the next section. • Forcoveredworkersinaplanwiththreeormoretiersofcostsharingforprescriptiondrugs,copaymentsarethemost commonformofcostsharingintheﬁrstthreetiersandcoinsuranceisthenextmostcommon. Amongthosewitha fourthtier, the diﬀerence betweenthepercentagewithacopaymentandacoinsurancerequirementisnotstatistically signiﬁcant[Figure9.3]. – Amongcoveredworkersinplanswiththreeormoretiersofcostsharingforprescriptiondrugs,theaverage copaymentsare$11forﬁrst-tierdrugs,$33second-tierdrugs,$59forthird-tierdrugs,and$110forfourth-tier drugs[Figure9.6]. – Amongcoveredworkersinplanswiththreeormoretiersofcostsharingforprescriptiondrugs,theaverage coinsuranceratesare17%forﬁrst-tierdrugs,25%second-tierdrugs,38%third-tierdrugs,and28%forfourth-tier drugs[Figure9.6]. • Elevenpercentofcoveredworkersareinaplanwithtwotiersforprescriptiondrugcostsharing(excludingtiers coveringonlyspecialtydrugs). – Fortheseworkers,copaymentsaremorecommonthancoinsuranceforbothﬁrst-tierandsecond-tierdrugs. The averagecopaymentfortheﬁrsttieris$11andtheaveragecopaymentforthesecondtieris$30[Figure9.3]. • Sevenpercentofcoveredworkersareinaplanwiththesamecostsharingforprescriptionsregardlessofthetypeof drug(excludingtierscoveringonlyspecialtydrugs). – Amongtheseworkers,21%havecopaymentsand79%havecoinsurance[Figure9.3]. Theaveragecoinsurance rate is 19% and the averagecopaymentis$11[Figure9.7]. – Twenty-onepercentoftheseworkersareinaplanthatlimitscoverageforprescriptionstogenericdrugs[Figure 9.9]. • Coinsuranceratesforprescriptiondrugsoftenhavemaximumand/orminimumdollaramountsassociatedwiththe coinsurancerate. Dependingontheplandesign,coinsurancemaximumsmaysigniﬁcantlylimittheamountanenrollee mustspendout-of-pocketforhighercostdrugs. • Thesecoinsuranceminimumandmaximumamountsvaryacrossthetiers. – Forexample,amongcoveredworkersinaplanwithcoinsurancefortheﬁrstcost-sharingtier,25%haveonlya maximumdollaramountattachedtothecoinsurancerate,8%haveonlyaminimumdollaramount,18%have bothaminimumandmaximumdollaramount,and49%haveneither. Forthoseinaplanwithcoinsurancefor thefourthcost-sharingtier,52%haveonlyamaximumdollaramountattachedtothecoinsurancerate,4%have onlyaminimumdollaramount,12%havebothaminimumandmaximumdollaramount,and33%haveneither. [Figure 9.8]. The Kaiser Family Foundation and Health Research & Educational Trust / Page 150

SECTION9. PRESCRIPTIONDRUGBENEFITS The Kaiser Family Foundation and Health Research & Educational Trust / Page 151

SECTION9. PRESCRIPTIONDRUGBENEFITS The Kaiser Family Foundation and Health Research & Educational Trust / Page 152

SECTION9. PRESCRIPTIONDRUGBENEFITS The Kaiser Family Foundation and Health Research & Educational Trust / Page 153

SECTION9. PRESCRIPTIONDRUGBENEFITS The Kaiser Family Foundation and Health Research & Educational Trust / Page 154

SECTION9. PRESCRIPTIONDRUGBENEFITS The Kaiser Family Foundation and Health Research & Educational Trust / Page 155

SECTION9. PRESCRIPTIONDRUGBENEFITS SPECIALTYDRUGS • Specialty drugs, such as biologics that may be used to treat chronic conditions or some cancer drugs, can be quite expensiveandoftenrequirespecialhandlingandadministration. Werevisedourquestionsbeginningwiththe2016 surveytoobtainmoreinformationaboutformularytiersthatareexclusivelyforspecialtydrugs. Wearereportingresults onlyamonglargeﬁrmsbecauseasubstantialshareofsmallﬁrmswereunsurewhethertheirlargestplancoveredthese drugs. – Ninety-sevenpercentofcoveredworkersatlargeﬁrmshavecoverageforspecialtydrugs[Figure9.10]. Among theseworkers,47%areinaplanwithatleastonecost-sharingtierjustforspecialtydrugs[Figure9.11]. – Amongcoveredworkersinaplanwithaseparatetierforspecialtydrugs,45%haveacopaymentforspecialty drugsand46%haveacoinsurance[Figure9.12]. Theaveragecopaymentis$101andtheaveragecoinsurancerate is 27%[Figure9.13]. Eightypercentofthosewithacoinsurancehaveamaximumdollarlimitontheamountof coinsurancetheymustpay. • Somecoveredworkersarealsorequiredtomeetadeductiblebeforetheplancoversspecialtydrugs. Amongcovered workersenrolledinaplanwithadeductibleandspecialtydrugcoverage,29%mustmeetthegeneralannualdeductible and15%mustmeetaseparatedrugdeductiblebeforespecialtydrugsarecovered[Figure9.14]. The Kaiser Family Foundation and Health Research & Educational Trust / Page 156

SECTION9. PRESCRIPTIONDRUGBENEFITS The Kaiser Family Foundation and Health Research & Educational Trust / Page 157

SECTION9. PRESCRIPTIONDRUGBENEFITS The Kaiser Family Foundation and Health Research & Educational Trust / Page 158

SECTION9. PRESCRIPTIONDRUGBENEFITS SEPARATEANNUALDRUGDEDUCTIBLES • In addition to other cost sharing, some covered workers are also required to meet a separate prescription drug deductiblebeforetheplancoverssomeoralldrugs. Fifteenpercentofcoveredworkersareinaplanwithaseparate annualdeductibleforprescriptiondrugs[Figure9.15]. Theseprescriptiondrugdeductiblesareseparatefromany generalannualdeductibleandmayapplytoalloraselectnumberoftiers. – For57%ofcoveredworkersinﬁrmswithaseparatedeductibleforprescriptiondrugs,thedeductibleappliestoall drugsoneachoftheformularytiers[Figure9.16]. – Theaverageannualdeductibleamongcoveredworkersinﬁrmswhofaceaseparateannualdeductibleis$149 [Figure 9.16]. The Kaiser Family Foundation and Health Research & Educational Trust / Page 159

SECTION9. PRESCRIPTIONDRUGBENEFITS Genericdrugs Drugsthatarenolongercoveredbypatentprotectionandthusmaybeproducedand/ordistributedby multipledrugcompanies. Preferreddrugs Drugsincludedonaformularyorpreferreddruglist;forexample,abrand-namedrugwithoutageneric substitute. Non-preferreddrugs Drugsnotincludedonaformularyorpreferreddruglist;forexample,abrand-namedrugwitha genericsubstitute. Fourth-tierdrugs Newtypesofcost-sharingarrangementsthattypicallybuildadditionallayersofhighercopaymentsor coinsuranceforspeciﬁcallyidentiﬁedtypesofdrugs,suchaslifestyledrugsorbiologics. Specialtydrugs Specialtydrugssuchasbiologicaldrugsarehighcostdrugsthatmaybeusedtotreatchronicconditions The Kaiser Family Foundation and Health Research & Educational Trust / Page 160

SECTION9. PRESCRIPTIONDRUGBENEFITS suchasblooddisorder,arthritisorcancer. Oftentimestheyrequirespecialhandlingandmaybeadministeredthrough injection or infusion. The Kaiser Family Foundation and Health Research & Educational Trust / Page 161

53% $6,690 Employer Health Benefits 2017 ANNUAL SURVEY Plan Funding section 10 $18,7642017

SECTION10. PLANFUNDING Section10 PlanFunding Manyﬁrms,particularlylargerﬁrms,choosetopayforthehealthservicesoftheirworkersdirectlyfromtheirownfundsrather thanbypurchasinghealthinsuranceforthem. Thisiscalledself-funding. Federallaw(theEmployeeRetirementIncome Security Act of 1974, or ERISA) exempts self-funded plans established by private employers from most state insurance laws, includingreserverequirements,mandatedbeneﬁts,premiumtaxes,andconsumerprotectionregulations. Sixtypercentof coveredworkersareinaself-fundedhealthplan. Self-fundingiscommonamonglargerﬁrmsbecausetheycanspreadtherisk of costly claims over a large number of workers and dependents. Manyﬁrmswithself-fundedplansalsouseinsurance,oftencalledstoplosscoverage,tolimittheirliabilityforverylargeclaims oranunexpectedlevelofexpenses. Aboutthree-ﬁfthsofcoveredworkersinfullyorpartiallyself-fundedplansareinplans withstoplossinsurance. • Sixty percent of covered workers are in a plan that is completely or partially self-funded, similar to last year [Figures 10.1 and10.2]. – Thepercentageofcoveredworkersenrolledinself-fundedplanshasbeenstableinrecentyearsacrossﬁrmsizes [Figure 10.2]. – Asexpected,coveredworkersinlargeﬁrmsaresigniﬁcantlymorelikelytobeinaself-fundedplanthancovered workersinsmallﬁrms(79%vs.15%). Thepercentageofcoveredworkersinself-fundedplansincreasesasthe numberofworkersinaﬁrmincreases. Eighty-onepercentofcoveredworkersinﬁrmswith1,000to4,999workers and91%ofcoveredworkersinﬁrmswith5,000ormoreworkersareinself-fundedplansin2017[Figures10.1and 10.4]. The Kaiser Family Foundation and Health Research & Educational Trust / Page 163

SECTION10. PLANFUNDING The Kaiser Family Foundation and Health Research & Educational Trust / Page 164

SECTION10. PLANFUNDING The Kaiser Family Foundation and Health Research & Educational Trust / Page 165

SECTION10. PLANFUNDING The Kaiser Family Foundation and Health Research & Educational Trust / Page 166

SECTION10. PLANFUNDING STOPLOSSCOVERAGEANDATTACHMENTPOINTS • Fifty-eight percent of covered workers in self-funded health plans are in plans that have stoploss insurance [Figure 10.7]. Stoplosscoveragemaylimittheamountofclaimsthatmustbepaidforeachworkerormaylimitthetotalamountthe plansponsormustpayforallclaimsovertheplanyear. – Thepercentageofcoveredworkersinself-fundedplanswithstoplossinsurance(58%)issimilartothevaluewhen thesurveyﬁrstaskedaboutstoplossinsurancein2011(58)%. – Eighty-eightpercentofcoveredworkersinself-fundedplansthathavestoplossprotectionareinplanswhere thestoplossinsurancelimitstheamountthattheplanmustspendoneachworker. Thisincludesstoploss insuranceplansthatlimitaﬁrm’sper-employeespendingandplansthatlimitbothaﬁrm’soverallspendingand per-employeespending[Figure10.8]. – Firmswithper-enrolleestoplosscoveragewereaskedforthedollaramountwherethestoplosscoveragewould start to pay for most or all of the claim (called an attachment point). The average attachment point in small ﬁrms is $80,000. Forlargeﬁrmswithaper-personlimit,theaverageattachmentpointis$340,000[Figure10.8]. The Kaiser Family Foundation and Health Research & Educational Trust / Page 167

SECTION10. PLANFUNDING The Kaiser Family Foundation and Health Research & Educational Trust / Page 168

SECTION10. PLANFUNDING The Kaiser Family Foundation and Health Research & Educational Trust / Page 169

SECTION10. PLANFUNDING The Kaiser Family Foundation and Health Research & Educational Trust / Page 170

SECTION10. PLANFUNDING Self-FundedPlan Aninsurancearrangementinwhichtheemployerassumesdirectﬁnancialresponsibilityforthecostsof enrollees’ medical claims. Employers sponsoringself-fundedplanstypicallycontractwithathird-partyadministrator orinsurertoprovideadministrativeservicesfortheself-fundedplan. Insomecases,theemployermaybuystoploss coveragefromaninsurertoprotecttheemployeragainstverylargeclaims. FullyInsuredPlan Aninsurancearrangementinwhichtheemployercontractswithahealthplanthatassumesﬁnancial responsibility for the costs of enrollees’ medical claims. The Kaiser Family Foundation and Health Research & Educational Trust / Page 171

53% $6,690 Employer Health Benefits 2017 ANNUAL SURVEY Retiree Health Benefits section 11 $18,7642017

SECTION11. RETIREEHEALTHBENEFITS Section11 RetireeHealthBeneﬁts Retiree health beneﬁtsareanimportantconsiderationforolderworkersmakingdecisionsabouttheirretirement. Health beneﬁtsforretireesprovideanimportantsupplementtoMedicareforretireesage65orolder. Overtime,thepercentageof ﬁrmsoﬀeringretireecoveragehasdecreased. Thissurveyasksretireehealthbeneﬁtsquestionsonlyoflargeﬁrms(200ormore workers). EMPLOYERRETIREEBENEFITS • In 2017, 25%oflargeﬁrmsthatoﬀerhealthbeneﬁtstotheirworkersoﬀerretireecoverage,similartorecentyears[Figure 11.1]. However,therehasbeenadownwardtrendinthepercentageofﬁrmsoﬀeringretireescoverage,from32%in 2007and40%in1999. • Retiree health beneﬁtsoﬀerratesvaryconsiderablybyﬁrmcharacteristics. – Amonglargeﬁrmsoﬀeringhealthbeneﬁts,ﬁrmswith200-999workersarelesslikelytooﬀerretireehealth beneﬁtsthanﬁrmswith1,000ormoreworkers(23%vs.36%)[Figure11.2]. – Theshareoflargeﬁrmsoﬀeringretireehealthbeneﬁtsvariesconsiderablybyindustry. Stateandlocal governments(73%)andtransportation/communication/utilitiesindustries(47%)havehigherthanaverageoﬀer rates, while retail (5%) and health care (8%) have lower than average oﬀer rates [Figure 11.2]. – Amonglargeﬁrmsoﬀeringhealthbeneﬁts,theshareofpublicﬁrmsoﬀeringretireebeneﬁts(67%)ishigherthan thesharesofprivatefor-proﬁtﬁrms(11%)orprivatenot-for-proﬁtﬁrms(19%)oﬀeringretireebeneﬁts[Figure 11.3]. – Largeﬁrmswithatleastsomeunionworkersaremorelikelytooﬀerretireehealthbeneﬁtsthanlargeﬁrms withoutanyunionworkers(45%vs.18%)[Figure11.3]. • Twenty-sixpercentoflargeﬁrmsoﬀeringretireebeneﬁtscontributetothosebeneﬁtsthroughacontractwitha MedicareAdvantageplan. Firmswith1,000-4,999workersaremorelikelytocontributetoretireebeneﬁtsthrougha contractwithaMedicareAdvantageplanthanotherlargeﬁrms(44%vs.21%)[Figure11.4]. The Kaiser Family Foundation and Health Research & Educational Trust / Page 173

SECTION11. RETIREEHEALTHBENEFITS The Kaiser Family Foundation and Health Research & Educational Trust / Page 174

SECTION11. RETIREEHEALTHBENEFITS The Kaiser Family Foundation and Health Research & Educational Trust / Page 175

SECTION11. RETIREEHEALTHBENEFITS The Kaiser Family Foundation and Health Research & Educational Trust / Page 176

SECTION11. RETIREEHEALTHBENEFITS EARLYRETIREESANDMEDICARE-AGERETIREES • Amonglargeﬁrmsoﬀeringretireehealthbeneﬁts,mostﬁrmsoﬀertoearlyretireesundertheageof65(95%). Alower percentage(66%)oflargeﬁrmsoﬀeringretireehealthbeneﬁtsoﬀertoMedicare-ageretirees. Thesepercentagesare similar to those in recent years [Figure 11.5]. • Amongalllargeﬁrmsoﬀeringretireehealthbeneﬁts,61%oﬀerhealthbeneﬁtstobothearlyandMedicare-ageretirees [Figure 4.6]. The Kaiser Family Foundation and Health Research & Educational Trust / Page 177

SECTION11. RETIREEHEALTHBENEFITS The Kaiser Family Foundation and Health Research & Educational Trust / Page 178

SECTION11. RETIREEHEALTHBENEFITS PRIVATEEXCHANGES • Private exchangeshavereceivedconsiderableattentionoverthelastseveralyears. Theyaretypicallycreatedbya consultingcompany,broker,orinsurer,andarediﬀerentthanthepublicexchangescreatedundertheAﬀordableCare Act(ACA).Privateexchangesallowemployeesorretireesfrommultiplecompaniestochoosefromalargernumber of health beneﬁtoptionsthanoneﬁrmwouldgenerallyprovide. Twelvepercentoflargeﬁrmsoﬀeringretireehealth beneﬁtsreporttheyoﬀerbeneﬁtsthroughaprivateexchange,similartothepercentagelastyear(6%)[Figure11.7]. For moreinformationontheuseofprivateexchangesforactiveemployees,pleaseseeSection14. • Thirty percent of large ﬁrms oﬀering retiree beneﬁts make a deﬁnedcontributionforretireehealthbeneﬁts[Figure11.7]. Adeﬁnedcontributionisasetdollaramountthattheretireecanusetopurchasearetireehealthplantheychoose. The Kaiser Family Foundation and Health Research & Educational Trust / Page 179

SECTION11. RETIREEHEALTHBENEFITS The Kaiser Family Foundation and Health Research & Educational Trust / Page 180

53% $6,690 Employer Health Benefits 2017 ANNUAL SURVEY Health and Wellness Programs section 12 $18,7642017

SECTION12. HEALTHANDWELLNESSPROGRAMS Section12 HealthandWellnessPrograms Firmscontinuetoshowconsiderableinterestinprogramsthathelpworkersidentifyhealthissuesandmanagechronic conditions. Manyemployersbelievethatimprovingthehealthoftheirworkersandtheirfamilymemberscanimprovemorale, productivityandreducehealthcarecosts. Inadditiontowellnessprograms,manylargeﬁrmsusediseasemanagement programstohelpworkersmanagechronicconditions. In addition to oﬀering wellness programs,amajorityoflargeﬁrmsnowoﬀerhealthscreeningprograms,includinghealth risk assessments, whicharequestionnairesaskingworkersaboutlifestyle,stressorphysicalhealth,andbiometricscreening, whichwedeﬁneasin-personhealthexaminationsconductedbyamedicalprofessional. Firmsandinsurersmayusethehealth informationcollectedduringscreeningstotargetwellnessoﬀeringsorotherhealthservicestoworkerswithcertainconditions orbehaviorsthatposearisktotheirhealth. Someﬁrmshaveincentiveprogramsthatrewardorpenalizeworkersfordiﬀerent activities, including participating in wellness programs or completing health screenings. Onlyﬁrmsoﬀeringhealthbeneﬁtswereaskedabouttheirwellnessandhealthpromotionprograms. Informationabout incentives is reported only for large ﬁrms (200 or more workers) because many small ﬁrm (3-199 workers) respondentsdonot knowthisinformationabouttheirprograms. Thisyear’ssurveyincludesnewquestionsabouthowaﬁrmevaluatesitswellness programsandaboutpenaltiesforworkerswhousetobacco. Amonglargeﬁrmsoﬀeringhealthbeneﬁtsin2017,62%oﬀerworkerstheopportunitytocompleteahealthriskassessment, 52%oﬀerworkerstheopportunitytocompleteabiometricscreening,and85%oﬀerworkerswellnessprogramssuchas programstohelpthemstopsmokingorloseweight,orprogramsthatoﬀerlifestyleandbehavioralcoaching. Substantial sharesoftheselargeﬁrmsprovideincentivesforworkerstoparticipateinortocompletetheprograms. HEALTHRISKASSESSMENTS Someﬁrmsprovideworkerstheopportunitytocompleteahealthriskassessmenttoidentifypotentialhealthissues. Health risk assessmentsgenerallyincludequestionsaboutmedicalhistory,healthstatus,andlifestyle. Atsmallﬁrms,healthrisk assessmentsaretypicallyadministeredbyaninsurer. • Amongﬁrmsoﬀeringhealthbeneﬁts,38%ofsmallﬁrmsand62%oflargeﬁrmsprovideworkerstheopportunityto completeahealthriskassessment[Figure12.1]. Thesepercentagesaresimilartothecorrespondingpercentagesfor 2016(32%forsmallﬁrmsand59%forlargeﬁrms)[Figure12.2]. – Seventy-eightpercentofﬁrmsoﬀeringhealthbeneﬁtswith5,000ormoreworkersprovideworkersthe opportunitytocompleteahealthriskassessment,similartothepercentagefor2016(74%)[Figure12.1]. • In ﬁrmsprovidingworkerstheopportunitytocompleteahealthriskassessment,42%ofcoveredworkerscompletean assessment,similartothepercentagein2016[Figure12.3]. – Thereisconsiderablevariationacrossﬁrmsinthepercentageofworkerswhocompletetheassessment. Nineteen percentoflargeﬁrmsprovidingworkerstheopportunitytocompleteahealthriskassessmentreportthatmore than75%oftheirworkerscompletetheassessment,while45%reportnomorethan25%ofworkerscompletethe assessment. • Someﬁrmsoﬀerincentivestoencourageworkerstocompleteahealthriskassessment. – Amonglargeﬁrmsthatoﬀerahealthriskassessment,52%oﬀerworkersanincentivetocompletetheassessment [Figure 12.4]. The Kaiser Family Foundation and Health Research & Educational Trust / Page 182

SECTION12. HEALTHANDWELLNESSPROGRAMS – Amonglargeﬁrmsoﬀeringincentivesforworkerstocompleteahealthriskassessment,46%lowerpremium contributionsorreducecostsharingand40%oﬀercash,HSAorHRAcontributions,orallowtheworkertoavoid apayrolldeduction[Figure12.5]. Insomeﬁrms,workersmustcompletetheassessmenttobeeligibleforother rewardsundertheﬁrm’swellnessprograms. Someﬁrmsoﬀerworkersmorethanonetypeofincentive. The Kaiser Family Foundation and Health Research & Educational Trust / Page 183

SECTION12. HEALTHANDWELLNESSPROGRAMS The Kaiser Family Foundation and Health Research & Educational Trust / Page 184

SECTION12. HEALTHANDWELLNESSPROGRAMS The Kaiser Family Foundation and Health Research & Educational Trust / Page 185

SECTION12. HEALTHANDWELLNESSPROGRAMS BIOMETRICSCREENING Biometricscreeningisahealthexaminationthatmeasuresaperson’sriskfactors(suchascholesterol,bloodpressure,andbody massindex(BMI))forcertainmedicalissues. Abiometricoutcomeinvolvesassessingwhetheranenrolleemeetsspeciﬁed healthtargetsrelatedtocertainriskfactors,suchasmeetingatargetBMIorcholesterollevel. Asdeﬁnedbythissurvey,goals related to smokingarenotincludedinthebiometricscreeningquestions. • Amongﬁrmsoﬀeringhealthbeneﬁts,21%ofsmallﬁrmsand52%oflargeﬁrmsprovideworkerstheopportunityto completeabiometricscreening[Figure12.6]. Thesepercentagesaresimilarto2016(20%and53%)[Figure12.7]. • In ﬁrmsprovidingworkerstheopportunitytocompleteabiometricscreening,41%ofcoveredworkerscompletea screening[Figure12.8]. – Thereisconsiderablevariationacrossﬁrmsinthepercentageofworkerswhocompleteabiometricscreening. Twenty-twopercentoflargeﬁrmsprovidingworkerstheopportunitytocompleteabiometricscreeningreport thatmorethan75%oftheirworkerscompletethescreening,while26%reportnomorethan25%ofworkers completethescreening. • Firmsthatprovideworkerstheopportunitytocompleteabiometricscreeningmayincludeadditionalincentivesfor thoseworkerswhodoso. – Amonglargeﬁrmswithbiometricscreeningprograms,53%oﬀerworkersanincentivetocompletethescreening [Figure 12.10]. The likelihood of a ﬁrm with a biometric screening program oﬀering an incentive to complete a biometricscreeningincreaseswithﬁrmsize[Figure12.10]. Someﬁrmsreportoﬀeringmorethanonetypeof incentive. – Amonglargeﬁrmswithanincentiveforworkerstocompleteabiometricscreening,49%lowerpremium contributionsorreducecostsharingand33%oﬀercash,HRAorHSAcontributions,orallowtheworkertoavoid apayrolldeduction. Aswithincentivesforhealthriskassessments,workersinsomeﬁrmsmustcompletethe biometricscreeningtobeeligibleforotherrewardsundertheﬁrm’swellnessprograms. [Figure12.11]. • In addition to incentives for completing a biometric screening, some ﬁrms oﬀer workers incentives to meet biometric outcomes. Amonglargeﬁrmswithbiometricscreeningprograms,14%rewardorpenalizeworkersbasedonachieving speciﬁedbiometricoutcomes(suchasmeetingatargetBMI)[Figure12.10]. – Thesizeoftheincentivesﬁrmsoﬀerformeetingbiometricoutcomesvariesconsiderably. Amonglargeﬁrms oﬀeringarewardorpenaltyformeetingbiometricoutcomes,themaximumrewardisvaluedat$150orlessfor9% of ﬁrmsandmorethan$1,000for17%ofﬁrms[Figure12.12]. Twenty-threepercentoftheseﬁrmscombinethe rewardwithincentivesforotheractivities. The Kaiser Family Foundation and Health Research & Educational Trust / Page 186

SECTION12. HEALTHANDWELLNESSPROGRAMS The Kaiser Family Foundation and Health Research & Educational Trust / Page 187

SECTION12. HEALTHANDWELLNESSPROGRAMS The Kaiser Family Foundation and Health Research & Educational Trust / Page 188

SECTION12. HEALTHANDWELLNESSPROGRAMS The Kaiser Family Foundation and Health Research & Educational Trust / Page 189

SECTION12. HEALTHANDWELLNESSPROGRAMS The Kaiser Family Foundation and Health Research & Educational Trust / Page 190

SECTION12. HEALTHANDWELLNESSPROGRAMS ADMINISTRATIONOFHEALTHSCREENINGPROGRAMS Amongﬁrmsoﬀeringhealthbeneﬁts,44%ofsmallﬁrmsand69%oflargeﬁrmsoﬀerworkersahealthriskassessment, biometricscreeningorbothscreeningprograms. Thescopeandadministrationofscreeningprogramsvaryconsiderably acrossﬁrms,andsomeﬁrmsusediﬀerentadministratorsfordiﬀerentprograms. • Amongﬁrmsthatoﬀerahealthscreeningprogram,aninsurerorthird-partyadministratoradministerssomehealth screeningprogramsat87%ofﬁrms,thirdpartyvendors,suchaswellnessproviders,administersomescreening programsat(29%)ofﬁrms,andtheﬁrmitselfadministerssomehealthscreeningprogramsat(9%)ofﬁrms[Figure 12.13]. • Thirty-sevenpercentoflargeﬁrmsoﬀeringhealthbeneﬁtshaveanincentiveforworkerstocompletebiometric screeningorahealthriskassessment. Amonglargeﬁrmswithanincentiveforeitherhealthscreeningprogram,34% haveincentivesforworkersnotenrolledinthehealthplanand49%haveincentivesforspousesenrolledasdependents in the plan [Figure 12.14]. • Amongﬁrmsoﬀeringhealthbeneﬁts,8%ofsmallﬁrmsand14%oflargeﬁrmscollectinformationfromworkers’ wearabledevices,suchasaFitbitorAppleWatch,aspartoftheirwellnessorhealthpromotionprogram[Figure12.15]. The Kaiser Family Foundation and Health Research & Educational Trust / Page 191

SECTION12. HEALTHANDWELLNESSPROGRAMS The Kaiser Family Foundation and Health Research & Educational Trust / Page 192

SECTION12. HEALTHANDWELLNESSPROGRAMS WELLNESSANDHEALTHPROMOTIONPROGRAMS Manyﬁrmsandhealthplansoﬀerprogramstohelpworkersengageinhealthylifestylesandreducehealthrisks. Wellnessand healthpromotionprogramsmayincludeexerciseprograms,healtheducationclasses,andstress-managementcounseling. Theseprogramsmaybeoﬀereddirectlybytheﬁrm,aninsurer,orathird-partycontractor. • Amongﬁrmsoﬀeringhealthbeneﬁts,40%ofsmallﬁrmsand72%oflargeﬁrmsoﬀerprogramstohelpworkersstop smoking,34%ofsmallﬁrmsand67%oflargeﬁrmsoﬀerprogramstohelpworkersloseweight,and47%ofsmallﬁrms and72%oflargeﬁrmsoﬀersomeotherlifestyleorbehavioralcoachingprogram. Fifty-eightpercentofsmallﬁrmsand 85%oflargeﬁrmsoﬀeringhealthbeneﬁtsoﬀeratleastoneofthesethreeprograms[Figures12.16and12.17]. • Toencourageparticipationinwellnessprograms,ﬁrmsmayoﬀerincentivestoworkerswhoparticipateinorcomplete wellnessprograms. – Thirty-twopercentoflargeﬁrmsoﬀeringoneofthesewellnessorhealthpromotionprogramsoﬀeranincentive toencourageworkerstoparticipateinorcompletetheprograms[Figure12.18]. Forty-sixpercentofﬁrmswith morethan5,000workersoﬀeringoneofthesewellnessorhealthpromotionprogramsoﬀeranincentiveto participate in or complete the programs. – Amonglargeﬁrmsoﬀeringincentivestoworkerstoparticipateinorcompletewellnessorhealthpromotion programs,19%lowerpremiumcontributionsorreducecostsharingand37%oﬀercash,HSAorHRA The Kaiser Family Foundation and Health Research & Educational Trust / Page 193

SECTION12. HEALTHANDWELLNESSPROGRAMS contributions, or allow the worker to avoid a payroll deduction [Figure 12.19]. • Firmswithincentivesforhealthriskassessments,biometricscreening,orwellnessorhealthpromotionprogramswere askedtoreportthemaximumrewardorpenaltyaworkercouldearnforalloftheﬁrm’shealthpromotionactivities combined. Someﬁrmsdonotoﬀerincentivesforindividualactivities,butoﬀerrewardstoworkerswhocomplete avarietyofactivities. Amonglargeﬁrmsoﬀeringincentivesforanyoftheseprograms,themaximumvalueforall wellness-relatedincentivesis$150orlessin25%ofﬁrmsandmorethan$1,000in19%ofﬁrms[Figure12.20]. • Firmswithincentivesforhealthriskassessments,biometricscreening,orwellnessorhealthpromotionprogramswere also askedhoweﬀectivetheybelievedincentiveswereforencouragingparticipation. Thirty-fourpercentoflargeﬁrms oﬀeringincentivesforanyoneoftheseprogramssaidtheincentivesare“veryeﬀective”atencouragingworkersto participate and 58%saidtheincentivesare“somewhateﬀective”,while7%saidtheincentivesare“notatalleﬀective” [Figure 12.21]. • Firmsoﬀeringahealthscreeningprogramorawellnessprogramuseavarietyofmetricstoevaluatetheirhealth promotionprograms,includingparticipation,employeesatisfaction,andreturnoninvestment[Figure12.23]. The Kaiser Family Foundation and Health Research & Educational Trust / Page 194

SECTION12. HEALTHANDWELLNESSPROGRAMS The Kaiser Family Foundation and Health Research & Educational Trust / Page 195

SECTION12. HEALTHANDWELLNESSPROGRAMS The Kaiser Family Foundation and Health Research & Educational Trust / Page 196

SECTION12. HEALTHANDWELLNESSPROGRAMS The Kaiser Family Foundation and Health Research & Educational Trust / Page 197

SECTION12. HEALTHANDWELLNESSPROGRAMS DISEASEMANAGEMENT Diseasemanagementprogramsaimtoimprovehealthandreducecostsforenrolleeswithchronicillnessesbyeducatingthem abouttheirdiseaseandsuggestingtreatmentoptions. Theseprogramscanhelpenrolleeswithconditionssuchasdiabetes, asthma,hypertension,andhighcholesterol. • Forty-onepercentofﬁrmsthatoﬀerhealthbeneﬁtsoﬀerdiseasemanagementprograms. Largeﬁrmsaremorelikely thansmallﬁrmstooﬀerdiseasemanagementprograms(68%vs.40%)[Figure12.24]. • Ninepercentoflargeﬁrmsthatoﬀerdiseasemanagementprogramsoﬀerincentivesforworkerstoparticipateinor completetheprograms. Thispercentageishighestamongﬁrmswith5,000ormoreworkers(26%)[Figure12.26]. The Kaiser Family Foundation and Health Research & Educational Trust / Page 198

SECTION12. HEALTHANDWELLNESSPROGRAMS The Kaiser Family Foundation and Health Research & Educational Trust / Page 199

SECTION12. HEALTHANDWELLNESSPROGRAMS The Kaiser Family Foundation and Health Research & Educational Trust / Page 200

SECTION12. HEALTHANDWELLNESSPROGRAMS PENALTIESFORTOBACCOUSE • Amongﬁrmsoﬀeringhealthbeneﬁts,16%ofsmallﬁrmsand14%oflargeﬁrms,including49%ofﬁrmswith5,000or moreworkers,requirehigherpremiumcontributionsorcostsharingfromworkerswhousetobacco[Figure12.27]. Someﬁrmsnotedthatnotsmokingisaconditionofemployment. • Amongﬁrmswithhighercostsforworkerswhousetobacco,virtuallyallﬁrmsrelyonself-reporting,includingthrougha healthriskassessment,todeterminewhetheraworkerusestobacco[Figure12.28]. • Amonglargeﬁrmswithhighercostsforworkerswhousetobacco,56%indicatethatdependentsalsohavehigher premiumcontributionsorcostsharingiftheyusetobacco[Figure12.29]. The Kaiser Family Foundation and Health Research & Educational Trust / Page 201

SECTION12. HEALTHANDWELLNESSPROGRAMS The Kaiser Family Foundation and Health Research & Educational Trust / Page 202

53% $6,690 Employer Health Benefits 2017 ANNUAL SURVEY Grandfathered Health Plans section 13 $18,7642017

SECTION13. GRANDFATHEREDHEALTHPLANS Section13 GrandfatheredHealthPlans TheAﬀordableCareAct(ACA)exemptscertainhealthplansthatwereineﬀectwhenthelawwaspassed,referredtoas grandfatheredplans,fromsomestandardsinthelaw,includingtherequirementtocoverpreventivebeneﬁtswithoutcost sharing, haveanexternalappealsprocess,orcomplywiththenewbeneﬁtandratingprovisionsinthesmallgroupmarket. In 2017, 23%ofﬁrmsoﬀeringhealthbeneﬁtsoﬀeratleastonegrandfatheredhealthplan,and17%ofcoveredworkersare enrolledinagrandfatheredplan. Asinyearspast,someﬁrmshaddiﬃcultywiththedetailsoftheterm“grandfathering”,asdescribedintheprovisionsof theACA.Wewouldnotethatsmallerﬁrmsinparticularappearedtohavesomeconfusionaboutwhetherornottheyare grandfathered. Manysmallerﬁrms,eventhoseoﬀeringahealthplanineﬀectinMarch2010(whentheACAwasenacted),were unsureaboutwhethertheirplanwasgrandfathered. • Twenty-threepercentofoﬀeringﬁrmsreporthavingatleastonegrandfatheredplanin2017,unchangedfrom23%in 2016[Figure13.1]. • Seventeenpercentofcoveredworkersareenrolledinagrandfatheredhealthplanin2017[Figure13.2]. – Thepercentageofcoveredworkersenrolledinagrandfatheredplanislowerthan2016(23%),continuinga declinefrom26%in2014,36%in2013,and48%in2012[Figure13.3]. The Kaiser Family Foundation and Health Research & Educational Trust / Page 204

SECTION13. GRANDFATHEREDHEALTHPLANS The Kaiser Family Foundation and Health Research & Educational Trust / Page 205

SECTION13. GRANDFATHEREDHEALTHPLANS The Kaiser Family Foundation and Health Research & Educational Trust / Page 206

SECTION13. GRANDFATHEREDHEALTHPLANS GrandfatheredPlans Intheemployer-sponsoredmarket,healthplansthatwereinplacewhentheACAwasenacted(March 2010)canbegrandfatheredhealthplans. DepartmentofHealthandHumanServices(HSS)rulesstipulatethatﬁrms cannotsigniﬁcantlychangecostsharing,beneﬁts,employercontributions,oraccesstocoverageingrandfatheredplans. Newemployeescanenrollinagrandfatheredplanaslongastheﬁrmhasmaintainedconsecutiveenrollmentinthe The Kaiser Family Foundation and Health Research & Educational Trust / Page 207

SECTION13. GRANDFATHEREDHEALTHPLANS plan. Grandfatheredplansareexemptedfrommany,butnotall,oftheACA’sconsumerprotectionprovisions. The Kaiser Family Foundation and Health Research & Educational Trust / Page 208

53% $6,690 Employer Health Benefits 2017 ANNUAL SURVEY Employer Practices and Health Plan Networks section 14 $18,7642017

SECTION14. EMPLOYERPRACTICESANDHEALTHPLANNETWORKS Section14 EmployerPracticesandHealthPlanNetworks Employersplayasigniﬁcantroleinﬁnancingandarrangingforhealthcareandhealthinsurancecoverage,sotheirexperiences areimportantfactorsinhealthpolicydiscussions. Inrecentyears,employershaveincludednewprovidersandsitesofcare, suchasretailclinics, and somehavepursuedchangestotheirnetworkstoreducecostsorimprovequality. Therealsohasbeen considerableinterestinprivatehealthexchanges,whichcouldprovideﬁrmsandworkerswithawiderarrayofhealthplan choices, althoughthusfarenrollmenthasbeenlow. SHOPPINGFORHEALTHCOVERAGE Fifty-nine percent of ﬁrms oﬀering health beneﬁts reportedshoppingforanewhealthplanoranewinsurancecarrierinthe pastyear,similartothepercentagelastyear. Smallﬁrms(3-199workers)weremorelikelytoshopforcoverage(59%),and ﬁrmswith1,000-4,999workersandﬁrmswith5,000ormoreworkerswerelesslikelytoshopforcoverage(36%and24%, respectively) than ﬁrms in other size categories [Figure 14.1]. • Amongﬁrmsthatoﬀerhealthbeneﬁtsandwhoshoppedforanewplanorcarrierinthepastyear,28%changed insurancecarriers[Figure14.2]. • Eighty-eightpercentofﬁrmsoﬀeringhealthbeneﬁtsusedabrokerorconsultanttoassistinchoosingahealthplan [Figure 14.3]. The Kaiser Family Foundation and Health Research & Educational Trust / Page 210

SECTION14. EMPLOYERPRACTICESANDHEALTHPLANNETWORKS The Kaiser Family Foundation and Health Research & Educational Trust / Page 211

SECTION14. EMPLOYERPRACTICESANDHEALTHPLANNETWORKS PROVIDERNETWORKS Firmsandhealthplanscanstructuretheirnetworksofprovidersandtheircostsharingtoencourageenrolleestouseproviders whoarelowercostorwhoprovidebettercare. Atieredorhigh-performancenetworkgroupsprovidersinthenetworkbased onthecost,qualityand/oreﬃciencyofthecaretheydeliver. Thesenetworksencourageenrolleestovisitpreferreddoctorsby either restricting networks to eﬃcient providers, or by having diﬀerent cost sharing requirements based on the provider’s tier. • Twelvepercentofﬁrmswith50ormoreworkersthatoﬀerhealthbeneﬁtsincludeahigh-performanceortieredprovider networkintheirhealthplanwiththelargestenrollment,asimilarpercentagetolastyear[Figures14.6and14.7]. • Firmswith1,000-4,999workers(23%)andﬁrmswith5,000ormoreworkers(31%)aremorelikelytoincorporatea high-performanceortierednetworkintotheirlargestplan[Figure14.6]. • Eightpercentofﬁrmsoﬀeringhealthbeneﬁtsreportthattheyoﬀeraplanthattheyconsideredtobeanarrownetwork plan, similar to the percentage reported last year [Figures 14.4]. Narrow network plans limit the number of providers whocanparticipateinordertoreducecosts. NarrownetworkplansaregenerallymorerestrictivethanstandardHMO networks. – Firmswith5,000ormoreworkersoﬀeringhealthbeneﬁtsaremorelikelytooﬀeratleastoneplanwithanarrow networkthanﬁrmsofothersizes[Figure14.4]. • Six percent of ﬁrms oﬀeringhealthbeneﬁtssaidthateithertheyortheirinsurereliminatedahospitalorhealthsystem fromaprovidernetworkinordertoreducetheplan’scostduringthelastyear[Figure14.4]. The Kaiser Family Foundation and Health Research & Educational Trust / Page 212

SECTION14. EMPLOYERPRACTICESANDHEALTHPLANNETWORKS The Kaiser Family Foundation and Health Research & Educational Trust / Page 213

SECTION14. EMPLOYERPRACTICESANDHEALTHPLANNETWORKS The Kaiser Family Foundation and Health Research & Educational Trust / Page 214

SECTION14. EMPLOYERPRACTICESANDHEALTHPLANNETWORKS ALTERNATIVECARESETTINGS:TELEMEDICINEANDRETAILCLINICS Firmsandhealthplansareincorporatingnewsitesandmethodsofcareinordertoimproveconvenienceandpotentially reducecosts. • Fifty-three percent of ﬁrms with 50 or more workers whooﬀerhealthbeneﬁtscovertheprovisionofsomehealthcare services throughtelemedicineintheirlargesthealthplan[Figure14.8]. Telemedicineisthedeliveryofhealthcare services throughtelecommunicationstoapatientfromaproviderwhoisataremotelocation,includingvideochat andremotemonitoring. Thiswouldnotincludethemereexchangeofinformationviaemail,exclusivelyweb-based resources, or online information a plan may makeavailableunlessahealthprofessionalprovidesinformationspeciﬁcto theenrollee’scondition. Largerﬁrmsaremorelikelytocoverservicesprovidedthroughtelemedicinethansmallerﬁrms [Figure 14.8]. – Amongﬁrmswith50ormoreworkerswhoseplanscoverhealthservicesthroughtelemedicine,26%providea ﬁnancialincentiveforworkerstousetelemedicineinsteadofvisitingatraditionalphysician’soﬃcein-person [Figure 14.9]. – Thepercentageoflargeﬁrmsreportingthattheycoverservicesthroughtelemedicinerosesigniﬁcantlyinthe last year, from 39% last year to 63% this year [Figure 14.10]. We note that we made a small change to the survey question,whichcouldaccountforsomeofthatchange. Thisisasigniﬁcantincreaseinoneyear,andwewill examinethisnextyeartoseeifthehigherprevalencepersists. • Seventy-ﬁvepercentofﬁrmsthatoﬀerhealthbeneﬁtscovercarereceivedinretailclinics,suchasthoselocatedin pharmacies,supermarketsandretailstores,intheirlargesthealthplan[Figure14.11]. Theseclinicsareoftenstaﬀedby nursepractitionersorphysicianassistantsandtreatminorillnessesandprovidepreventiveservices. – Thepercentageofﬁrmscoveringcarereceivedinretailclinicsintheirlargesthealthplanincreasedinthelastyear [Figure 14.12]. – Fifteenpercentofﬁrmsthatcovercareatretailclinicsprovideaﬁnancialincentiveforworkerstovisitaretailclinic insteadofatraditionalphysician’soﬃce[Figure14.11]. • Seventy-threepercentofﬁrmsthatoﬀerhealthbeneﬁtsincludeanursehotlineintheirlargesthealthplan. Thisisa signiﬁcantincreasefrom55%in2013[Figure14.13]. The Kaiser Family Foundation and Health Research & Educational Trust / Page 215

SECTION14. EMPLOYERPRACTICESANDHEALTHPLANNETWORKS The Kaiser Family Foundation and Health Research & Educational Trust / Page 216

SECTION14. EMPLOYERPRACTICESANDHEALTHPLANNETWORKS The Kaiser Family Foundation and Health Research & Educational Trust / Page 217

SECTION14. EMPLOYERPRACTICESANDHEALTHPLANNETWORKS The Kaiser Family Foundation and Health Research & Educational Trust / Page 218

SECTION14. EMPLOYERPRACTICESANDHEALTHPLANNETWORKS PRIVATEEXCHANGESANDDEFINEDCONTRIBUTIONS Aprivateexchangeisavirtualmarketthatallowsemployerstoprovidetheirworkerswithachoiceofseveraldiﬀerenthealth beneﬁtoptions,oftenincludingsupplementalorancillarybeneﬁtsoptions. Privateexchangesgenerallyarecreatedby consultingﬁrms,insurers,orbrokers,andarediﬀerentthanthepublicexchangesrunbythestatesorthefederalgovernment. Thereisconsiderablevariationinthetypesofexchangescurrentlyoﬀered: someexchangesallowworkerstochoosebetween multipleplansoﬀeredbythesamecarrierwhileinothercasesmultiplecarriersparticipate. Theexchangeoperatormay establish standards for the plans oﬀered and maynegotiatewithinsurersoverthepriceandservicesprovided. Althoughthere hasbeenconsiderableattentiontothepotentialofprivateexchangestochangethemarketforemployer-basedcoverage, participation thus far has been quite modest. • Fourpercentofﬁrmsoﬀeringhealthbeneﬁtswith50ormoreworkersoﬀercoveragethroughaprivateexchange. These ﬁrmsprovidecoverageto2%ofcoveredworkersinﬁrmswith50ormoreworkers[Figure14.16]. Thesepercentagesare thesameasthosein2016. • Firmsoﬀeringhealthbeneﬁtswith50ormoreworkersthatdonotalreadyoﬀerhealthbeneﬁtsthroughaprivate exchangewereaskedwhethertheyhadconsideredoﬀeringcoveragethroughaprivateexchange. Tenpercentofthese ﬁrmsareconsideringsuchanapproach,lowerthanthepercentagelastyear(18%)[Figure14.15]. Someﬁrmsuseadeﬁnedcontributionapproachtocontributetowardthecostofhealthinsurance. Adeﬁnedcontributionisa set dollar amountoﬀeredtotheworkerbytheemployer. Workersmaythenselectoneofseveralplans,payingthediﬀerence betweenthedeﬁnedcontributionandthecostoftheirchosenhealthinsuranceplan. Thisallowsaﬁrmtooﬀeralargervariety of health plans to workers and to structure contributions or other rules to encourage workers to choose more eﬃcient plans. Someprivateexchangesencourageemployerstouseadeﬁnedcontributionapproachtoencouragecompetitionamongthe participating insurers. • Firmsoﬀeringhealthbeneﬁtswith50ormoreworkersandthatdonotalreadyoﬀerbeneﬁtsthroughaprivate The Kaiser Family Foundation and Health Research & Educational Trust / Page 219

SECTION14. EMPLOYERPRACTICESANDHEALTHPLANNETWORKS exchangewereaskedwhethertheyhadconsideredusingadeﬁnedcontributionapproach. Nineteenpercentofthese ﬁrmswereconsideringsuchanapproach[Figure14.15]. The Kaiser Family Foundation and Health Research & Educational Trust / Page 220

SECTION14. EMPLOYERPRACTICESANDHEALTHPLANNETWORKS ASSOCIATIONHEALTHPLANSANDMEDICAID • Anassociationhealthplanisanorganizationofemployersthatcoordinatescoverageinordertoreducecostsor improvebeneﬁts. Sixpercentofoﬀeringﬁrmswithfewerthan250workersoﬀerhealthbeneﬁtsthroughatradeor professional association health plan [Figure 14.17]. • AsubstantialshareofﬁrmsthatoﬀerhealthbeneﬁtsreporthavingworkerswhoreceivecoveragefromMedicaid. Medicaidisafederallyandstate-fundedprogramthatprovideshealthcoverageforpeoplewhoarepoor,agedor disabled. Twentypercentofsmallﬁrmsand48%oflargeﬁrmsreportthattheyhaveworkerscoveredbyMedicaid. We notethat,asexpected,thereisasigniﬁcantshareofﬁrms,particularlylargerﬁrms,thatdonotknowtheanswertothis question[Figure14.18]. The Kaiser Family Foundation and Health Research & Educational Trust / Page 221

E mplo y er H $6,690 ealth B 53% enefits THE KAISER FAMILY FOUNDATION - AND - HEALTH RESEARCH & 2017 EDUCATIONAL TRUST ANNU Employer AL SUR Health -and- VE Y Benefits The Henry J. Kaiser Family Foundation Health Research & Educational Trust THE Headquarters 155 North Wacker K 2017 2400 Sand Hill Road Suite 400 AISER Annual Survey Menlo Park, CA 94025 Chicago, IL 60606 F A Phone 650-854-9400 Phone 312-422-2600 Fax 312-422-4568 MIL Y FOUND Washington Offices and www.hret.org Barbara Jordan Conference Center A 1330 G Street, NW TION Washington, DC 20005 -AND- Phone 202-347-5270 www.kff.org HEAL TH RESEAR CH & EDUC A This publication (#9060) is available on the Kaiser Family Foundation’s website at www.kff.org. TIONAL $18,764 -and- 2017 TRUST September 2017