As the nation considers health reform,

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1 MarketWatch Job-Based Health Insurance: Costs Climb At A Moderate Pace Premiums grew about 5 percent from 2008 to 2009, as average family coverage reached $13,375. by Gary Claxton, Bianca DiJulio, Heidi Whitmore, Jeremy Pickreign, Megan McHugh, Benjamin Finder, and Awo Osei-Anto ABSTRACT: Each year the Kaiser/HRET Survey of Employer Health Benefits takes a snapshot of the state of employee benefits in the United States, based on interviews with public and private employers. Our findings for 2009 show that families continue to face higher premiums, up about 5 percent from last year, and that cost sharing in the form of deductibles and copayments for office visits is greater as well. Average annual premiums in 2009 were $4,824 for single coverage and $13,375 for family coverage. Enrollment in highdeductible health plans held steady. We offer new insights about health risk assessments and how firms responded to the economic downturn. [Health Aff (Millwood). 2009;28(6): w (published online 15 September 2009; /hlthaff.28.6.w1002)] As the nation considers health reform, the cost and availability of employer-based health insurance are key topics in the discussion because employer coverage remains the leading source of health insurance in the United States, covering about 159 million nonelderly Americans. 1 This paper reports findings from the eleventh annual Kaiser Family Foundation/Health Research and Educational Trust (Kaiser/HRET) Survey of Employer Health Benefits. The major findings from the 2009 survey include a moderate increase in the average premium cost for family coverage, increases in the percentage of covered workers with deductibles of $1,000 or more, increases in copayments for physician office visits, and flat enrollment in high-deductible health plans with a savings option (HDHP/SOs). Workers premium contributions, the percentage of employers offering coverage, and the availability of health risk assessments are also discussed. Despite the economic recession, the survey found few major changes in the employersponsored health insurance market. This may indicate a strong commitment by employers to maintaining workers benefits, but also may be the result of other factors, such as the fact that the survey only collects information from firms that remained in business, and cannot Gary Claxton (gclaxton@kff.org) is a vice president of the Henry J. Kaiser Family Foundation in Washington, D.C. Bianca DiJulio is a senior policy analyst there. Heidi Whitmore is a research scientist at the National Opinion Research Center (NORC) in Plymouth, Minnesota, and Bethesda, Maryland. Jeremy Pickreign is a research scientist at NORC, based in Albany, New York. Megan McHugh is director of research at the Health Research and Educational Trust (HRET) in Chicago, Illinois. Benjamin Finder is a research assistant for the Health Care Marketplace Project, Kaiser Family Foundation. Awo Osei-Anto is a researcher at HRET. w September 2009 DOI /hlthaff.28.6.w Project HOPE The People-to-People Health Foundation, Inc.

2 estimate the number of workers who lost coverage as a result of companies downsizing or closing. Another factor may have been that some firms may have made decisions about health benefits in advance of the plan year and may not have foreseen the full impact of the worsening economy on the firm. Study Data And Methods Sample for survey. Each year the study sample includes private firms and nonfederal government employers with three or more workers.thesampleofprivatefirmsiscompiledbysurveysamplingincorporated;forthe first time, nonfederal governments were sampled from the Census of Governments. 2 The sample is stratified by firm size and industry. Computer-assisted telephone interviews were conducted with employee benefit managers during January May 2009 by National Research LLC. A total of 2,054 firms completed the full survey; 73 percent of them also participated in 2007 or 2008, or both. The response rate was 47 percent overall and 48 percent among firms offering health benefits. Prior surveys indicate that firms not offering benefits are less inclined than others to participate in the survey. We asked one question of firms that declined to participate in the full survey: Does your company offer a health insurance program as a benefit to any of your employees? A total of 1,134 firms answered only this question. We used these responses with the responses of those that completed the full survey to calculate the overall offer rate. The response rate for this one question was 73 percent. Methods. To produce nationally representative estimates, we developed weights specific to employers, workers, covered workers, and workers by type of plan. First, we determined the basic employer weight by calculating the firm s probability of being selected into the sample. We then adjusted this basic employer weight for nonresponse bias and trimmed overly influential weight values. Next, the weights were poststratified based on the Census Bureau s 2006 Statistics of U.S. Businesses for private-sector firms or the 2007 Census of Governments for public-sector firms. The calculation of the worker weight followed the same process as the employer weight, with the basic worker weight determined by multiplying the basic employer weight by the number of workers in the firm. The covered-worker weight was the product of the worker weight and the percentage of workers covered by the firm s health benefits. 2 The plan-specific covered-worker weights were the product of the worker weight and the percentage of workers covered by a specific plan type. To correct for item nonresponse, missing data were imputed following a hotdeck approach, which replaces missing information with observed values from a firm of a similar size and industry. To account for design effects, the statistical package SUDAAN (Release 10.0) was used to calculate standard errors. Differences referred to in the text use the 0.05 confidence level as the threshold for significance. Survey questions. Each year benefit managers are asked how many employees are eligible and covered by the health benefits offered by the firm, and about the characteristics of the firm s largest health maintenance organization (HMO), preferred provider organization (PPO), point-of-service (POS) plan, and high-deductible health plan with savings option. The latter are health plans with high deductibles (at least $1,000 for single coverage and $2,000 for family coverage) that are offered with a health reimbursement arrangement (HRA) or are eligible for a health savings account (HSA). 3 In 2009, in addition to changing thesamplingsourceforgovernmentfirms,we made minor changes to the survey instrument. 2 Findings: Cost And Availability Of Coverage The cost of coverage. The average annual cost of health coverage in 2009 is $4,824 forsinglecoverageand$13,375forfamilycoverage(exhibit1).theaveragefamilypremium is about 5 percent higher in 2009 than in 2008 ($12,680). 4 During this same period, general HEALTH AFFAIRS ~ Web Exclusive w1003

3 EXHIBIT 1 Average Annual Health Insurance Premiums For Single And Family Coverage Among Covered U.S. Workers, Dollars 12,000 Single coverage Family coverage 9,000 6,000 3, SOURCE: Henry J. Kaiser Family Foundation/Health Research and Educational Trust Survey of Employer-Sponsored Health Benefits, NOTES: Except for single coverage, 2008 to 2009, all estimates are statistically different from the estimate for the previous year shown ( p < 0.05). Data are weighted by covered workers; see text. inflation fell by 0.7 percent, and wages rose by 3.1 percent. 5 7 Thechangeintheaveragecostof single coverage between 2008 ($4,704) and 2009 ($4,824) is not statistically significant; this is a notable change from past years. Small firms (3 199 workers) have lower average premiums for family coverage than large firms (200 or more workers; Exhibit 2). Single and family premiums remain higher in the Northeastthaninotherregions.Byplantype, premiums for covered workers in highdeductible plans with savings option are lower than the overall average premium levels for both single and family coverage. 8 Employee premium contributions. Covered workers on average contribute 17 percentofthepremiumforsinglecoverageand27 percent of the premium for family coverage; this amount has changed little in recent years. Workers in firms with a higher proportion of lower-wage workers (in which 35 percent or more of workers earn $23,000 or less per year) on average contribute a larger share of the premium than workers in firms with a lower proportion of lower-wage workers for single coverage (20 percent versus 16 percent) and family coverage (35 percent versus 26 percent; data not shown). Workers in firms with some union workers on average contribute a lower percentage toward family coverage than workers in firms without union members (21 percent versus 30 percent; data not shown). The average annual amounts contributed by covered workers are $779 for single coverage and $3,515 for family coverage (Exhibit 2). These levels are similar to levels in Employee contributions for single coverage are higher ($946) in the Northeast and lower ($667) in the West. Employee contributions for family coverage are lower in the Midwest ($3,174) than in other regions. Workers contributions continue to vary by firm size. Employees in small firms contribute significantly less than employees from large firms for single coverage (Exhibit 2). The opposite is true for family coverage, for which employees in small firms contribute more than $1,000 more, on average, than employees from large firms (Exhibit 2). Employees contributions for single coverage may be lower for small firms in an effort to encourage enrollment to meet minimum enrollment levels. Plan enrollment and cost sharing. The amount and type of cost sharing workers have is largely dependent on the type of plan in which they are enrolled. PPOs retain the largest market share, followed by HMOs, POS plans, HDHP/SOs, and conventional plans (Exhibit 3). Market shares did not change significantly from their levels in w September 2009

4 EXHIBIT 2 Average Annual Premiums And Worker Contributions For Single And Family Coverage, 2009 Total premium ($) Worker contribution ($) Category Single Family Single Family All plans 4,824 13, ,515 Plan type PPO HMO POS HDHP/SO 4,922 4,878 4,835 3,986 a 13,719 13,470 13,075 11,083 a a 3,470 3,685 4,146 a 2,672 a Region Northeast Midwest South West 4,989 b 4,834 4,740 4,808 14,084 b 13,498 13,193 12, b b 3,381 3,174 b 3,699 3,682 Firm size All small (3 199 workers) All large (200+ workers) 4,717 4,876 12,696 b 625 b 4,204 b 13,704 b 854 b 3,182 b SOURCE: Henry J. Kaiser Family Foundation/Health Research and Educational Trust Survey of Employer-Sponsored Health Benefits, NOTES: Data are weighted by covered workers; see text. PPO is preferred provider organization. HMO is health maintenance organization. POS is point-of-service plan. HDHP/SO is high-deductible health plan with savings option. HDHP/SO premium and worker contribution estimates do not include any employer contributions to the savings option. a Estimate is statistically different from estimate for all plans (p < 0.05). b Estimate is statistically different from estimate for all other firms not in the indicated size or region category (p < 0.05). General annual deductibles.a general annual deductible is the amount an enrollee must pay before all or most services are covered by the health plan. Although the percentage of workers with such a deductible did not change for any plan type from 2008 to 2009, the percentage of workers with a deductible of $1,000 or moreforsinglecoverageincreasedfrom18percent in 2008 to 22 percent in Although only 16 percent of workers in HMOs have a deductible, the average deductible increased from $503 in 2008 to $699 in 2009 for single coverage and from $1,053 in 2008 to $1,524 in 2009 for aggregate deductibles for family coverage. 9 As we have seen in previous years, for most plan types, covered workers in small firms (3 199 workers) have higher average deductibles than workers in larger firms. For PPOs, the most common plan type, the average deductible for workers with single coverage in smallfirmsis$1,040,comparedto$478for workersinlargefirms(exhibit4). Physician office visit cost sharing. In addition to any general deductible a plan may have, 77 percent of covered workers are required to pay a copayment(afixed-dollaramount)foraphysician office visit, while 14 percent pay coinsurance (a percentage of the charges). From 2008 to 2009, there were statistically significant increases in the average copayments for a visit with a physician: from $19 to $20 for a visit with a primary care physician and from $26 to $28 for a visit with a specialist. The average coinsurance amount for physician office visits is 18 percent. 10 Thetypeof cost sharing varies by plan type: copayments are the most common form of office visit cost sharing for covered workers in HMOs, PPOs, and POS plans (Exhibit 4). However, workers in high-deductible plans with savings option aremorelikelytohavecoinsurance(44percent) or no cost sharing (39 percent) than to HEALTH AFFAIRS ~ Web Exclusive w1005

5 EXHIBIT 3 Health Plan Enrollment By Covered Workers, By Plan Type, Selected Years Conventional HMO PPO POS HDHP/SO % 16% 11% % 21% 26% 7% % 31% 28% 14% % 28% 39% 24% 2000** 8% 29% 42% 21% 2001** 2002** % 4% 5% 5% 24% 27% 24% 25% 46% 52% 54% 55% 23% 18% 17% 15% 2005** 3% 21% 61% 15% ** % 3% 20% 21% 20% 20% 60% 57% 58% 60% 13% 13% 12% 10% 4% 5% 8% 8% Percent SOURCES: Henry J. Kaiser Family Foundation/Health Research and Educational Trust Survey of Employer-Sponsored Health Benefits, ; KPMG Survey of Employer-Sponsored Health Benefits, 1993 and 1996; and Health Insurance Association of America, NOTES: Because of the addition of a new category in 2006 (HDHP/SO), the difference in distribution of enrollment between 2005 and 2006 could not be tested for significance. No statistical tests were conducted for years prior to Information was not obtained for point-of-service (POS) plans in Data are weighted by covered workers; see text. Statistical significance denotes that the distribution is statistically different from the previous year shown. The value for conventional coverage in 2008 is 2 percent; in 2009, 1 percent. HMO is health maintenance organization. PPO is preferred provider organization. HDHP/SO is high-deductible health plan with savings option. ** p < 0.05 have copayments (14 percent) once the deductible has been met. Inpatient and outpatient cost sharing. More than three in four covered workers face cost sharing for the following services: 78 percent have cost sharing when admitted to a hospital and 76 percent, for outpatient surgery (data not shown). The form of cost sharing varies by plan type. For both types of services, covered workers in HMOs are more likely to face a copayment, whereas workers in PPOs or highdeductible plans with a savings option are more likely to have coinsurance. For example, for hospital admissions, 65 percent of workers in PPOs have coinsurance and 12 percent have copayments, compared to 44 percent of coveredworkersinhmoswithcopaymentsand 14 percent with coinsurance. 11 For workers in PPOs, the average hospital coinsurance rate is 18 percent, and for workers in HMOs, the average hospital copayment is $ Prescription drug cost sharing. More than threefourthsofcoveredworkersareinplanswith three or more tiers of cost sharing for prescription drugs. The first tier is typically generic drugs; tier 2 is typically preferred brand-name drugs; tier 3 is typically nonpreferred brandname drugs; and tier 4 is typically specialty medications. As noted in previous years, copayments are most prevalent for the first three tiers, and the prevalence of copayments or coinsurance is similar for workers with a fourth tier of cost sharing. The average copayments forthosewiththree-orfour-tiercostsharing are $10 for first-tier drugs, $27 for second-tier drugs,and$46forthird-tierdrugs.forcovered workers with a fourth tier, the average tier 4 copayment is $85, and the average coin- w September 2009

6 EXHIBIT 4 Cost Sharing In Employer-Sponsored Health Plans, By Type Of Plan, 2009 Deductibles HMO PPO POS HDHP/SO All plans Percent of covered workers with a general annual deductible for single coverage 16% 74% 62% 100% a Average deductible for single coverage b Small firms (3 199 workers) Large firms (200+ workers) All firms $900 c 528 c 699 $1,040 c 478 c 634 $1, ,061 $2,037 c 1,642 c 1,838 a a a Physician office visit copays and coinsurance Percent of covered workers with copay only Average copay for primary care physician office visit Average copay for specialist office visit 94% $18 d $26 d 77% $21 $28 89% $21 $31 d 14% $22 $29 77% $20 $28 Percent of covered workers with coinsurance only Average coinsurance for primary care physician office visit 2% e 16% 18% 6% 44% e 18% 14% 18% SOURCE: Henry J. Kaiser Family Foundation/Health Research and Educational Trust Survey of Employer-Sponsored Health Benefits, NOTES: Data are weighted by covered workers; see text. PPO is preferred provider organization. HMO is health maintenance organization. POS is point-of-service plan. HDHP/SO is high-deductible health plan with savings option. a A composite deductible is not presented because of the large variation in the percentage of firms with a deductible and the deductible values. b Average deductibles are calculated among covered workers with a general annual deductible for single coverage. c Estimates are statistically different within plan type between all small firms and all large firms (p < 0.05). d Estimate is statistically different from all plans estimate (p < 0.05). e Not sufficient data. surance amount is 31 percent (data not shown). Utilization management. Some plans may require workers to obtain prior approval before obtaining specialized medical services, also known as preadmission certification. More than half (55 percent) of employers reported that their largest health plan has preadmission certification for inpatient hospital care; 72 percent of large firms (200 or more workers) reported this requirement, compared to 54 percent of small firms (3 199 workers). Fifty-nine percent of firms reported that their largest health plan requires preadmission certification for outpatient surgery, and 42 percent reported preadmission certification for imaging services, such as magnetic resonance imaging (MRI), positron-emission tomography (PET), or computed tomography (CT) scans. Health plans may also provide case management services for people with high claims in an effort to improve quality of care and lower costs. Larger firms were much more likely than small firms, and all firms overall, to report that their largest plan includes this feature (82 percent, compared to 35 percent for small firms and 37 percent overall). Availability of coverage. Sixty percent of firms offer health benefits in 2009, which is not statistically different from the 63 percent reported in The smallest firms (3 9 workers) are much less likely to offer coverage to their workers (46 percent) than firms with 200 or more workers (98 percent; data not shown). Firms with a higher proportion of lower-wage workers (as defined above) are much less likely to offer benefits (39 percent) than firms with a lower proportion of lowerwage workers (64 percent). Firms in the South are the least likely to offer coverage. Nearly two-thirds of workers employed in firms that offer health benefits are covered by benefits through their own firm. Among all workers, 59 percent are covered by health benefits through their own firm. These coverage rates are similar to the 2008 percentages. Not all of these workers who do not have coverage through HEALTH AFFAIRS ~ Web Exclusive w1007

7 their employer remain uninsured: some may be covered through a spouse s employer or another source of coverage. Findings: Various Aspects Of Employer Coverage High-deductible health plans with savings option. Therehasbeenlittlemovement since 2008 in the percentages of employers offering high-deductible plans with savings option or enrollment in this plan type. These high-deductible plans (at least $1,000 for single coverage and $2,000 for family coverage) (1) are offered with a health reimbursement arrangement (HRA), referred to as HDHP/HRAs, or (2) meet the federal requirements allowing an employee to contribute to a health savings account (HSA), referred to as HSA-qualified HDHPs. 12 Twelve percent of employers offering health benefits offer high-deductible plans with a savings option in 2009 statistically similar to the 13 percent reported in 2008 and the 10 percent reported in Larger firms remain the most likely to offer high-deductible plans with savings option: 28 percent of firms with 1,000 or more employees do so (up from 22 percent in 2008), compared to 12 percent of firms with workers. As discussed above, 8 percent of covered workers are enrolled in these plans the same percentage as in Despite large firms increased likelihood of offering such plans, a larger percentage of workers in firms with workers are enrolled in them (13 percent) than workers in firms with 200 or more workers (6 percent; data not shown). Exhibit 5 shows the average premiums, worker premium contributions, HRA or HSA contributions by employers, and deductible amounts for covered workers in HDHP/HRAs and HSA-qualified HDHPs. The average premiums for single and family coverage in both types of high-deductible plans are lower than overall average premiums for all plan types. There has been little movement since 2008 in the percentages of employers offering high-deductible plans with a savings option. The average worker contributions to premiums for single and family coverage in HSAqualified HDHPs are lower than the average worker contribution for all plans. However, the average worker contribution for single and family coverage in HDHP/HRAs is not statistically different from comparable estimates for all plans. In addition to contributing to the premiums, employers offering high-deductible plans with savings option may also contribute to the savings account. Annual employer contributions to HRAs average $1,052 for employees with single coverage and $2,073 for employees with family coverage (Exhibit 5). For HSAs, the average HSA employer contribution amounts are $688 for single coverage and $1,126 for family coverage. Neither HRA nor HSA contributions are statistically different from the 2008 averages for singlecoverage(hra:$1,249,hsa:$838)orfamily coverage (HRA: $2,073, HSA: $1,522). Covered workers in small firms (3 199 workers) receive higher HSA contributions from employers than workers in large firms (200 or more workers) for single coverage ($868 versus $450) and family coverage ($1,364 versus $815; data not shown). Twenty-nine percent of employers offering HSA-qualified HDHPs (covering 31 percent of workers enrolled in these plans) do not make contributions to HSAs established by their workers. When employees work for a firm that contributes to the HSA, the average annual contribution is $1,000 forsinglecoverageand$1,640forfamilycoverage. Single and family deductibles associated with HDHP/HRAs and HSA-qualified HDHPs for 2009 are similar to the 2008 amounts. For single coverage, workers in HDHP/HRAs have an average deductible of $1,690, and workers in HSA-qualified HDHPs have an average deductible of $1,922. The average aggregate family deductible is $3,422 for HDHP/HRAs and $3,734 for HSA-qualified HDHPs (Exhibit 5). w September 2009

8 EXHIBIT 5 Features Of Two Types Of High-Deductible Health Plans (HDHPs) Compared To All Plans, By Plan Type, 2009 HDHP/HRA HSA-qualified HDHP All plans Annual plan averages for Single Family Single Family Single Family Premium Worker contribution to premium Deductible b Firm contribution to HRA or HSA $4,274 a 734 1,690 1,052 $12,223 a 3,067 3,422 2,073 $3,829 a $10,396 a $4, a 2,453 a 779 1, ,734 1,126 $13,375 3,515 c c d d Total premium plus firm contribution to HRA or HSA, if applicable 5,325 14,296 4,517 11,523 d d SOURCE: Henry J. Kaiser Family Foundation/Health Research and Educational Trust Survey of Employer-Sponsored Health Benefits, NOTES: The average firm contributions to health savings accounts (HSAs) for single coverage ($688) and family coverage ($1,126) include covered workers whose firm makes no contribution to the account. When those firms that do not contribute to the HSA (29 percent for single and family coverage) are excluded from the calculation, the average firm contribution to the HSA for covered workers is $1,000 for single coverage and $1,640 for family coverage. Data are weighted by covered workers; see text. a Estimate is statistically different from all plans estimate (p < 0.05). b Average deductibles for family coverage in HDHPs with health reimbursement arrangement (HDHP/HRAs) and HSA-qualified HDHPs shown here are for plans that require an aggregate deductible amount in which all family members out-of-pocket expenses count toward the deductible. The survey also asked about plans where the family deductible is a separate amount for each family member, typically with a limit on the number of family members who would be required to reach that amount. About 19 percent of HDHP/HRA plans and 7 percent of HSA-qualified HDHPs had separate deductible amounts. There were insufficient cases to report average separate deductibles for HDHP/HRAs. The average separate family deductible for HSAqualified HDHPs is $2,624. c A composite deductible is not presented for all plans because of the large variation in the percentage of firms with a deductible and the deductible values. d There are no applicable all plan estimates for these categories because workers in other plan types do not receive account contributions. Retiree health benefits. Twenty-nine percentoflargefirms(200ormoreworkers) offer retiree health benefits similar to the 31 percent offering such benefits in 2008 (data not shown). Although there was no change in the past year, the percentage of large firms offering retiree health benefits has declined from 40percentin1999and66percentin1988. Ninety-two percent of large firms offering retiree health benefits offer coverage to early retirees, and 68 percent offer coverage to Medicare-age retirees. Findings: Employers Health Plan Practices Health risk assessments. The survey also asked firms whether they give their employees the opportunity to complete a health risk assessment, which typically includes questions about medical history, health status, and lifestyle choices and can help identify potential health problems and target wellness or disease management interventions. Among firms offering health benefits, 16 percent give their employees the option to complete such an assessment: 55 percent of large firms and 14 percent of small firms provide this option. Of firms offering health risk assessments, 11 percent offer financial incentives to employees who complete the assessment; large firms are much more likely than small firms to do so (Exhibit 6). For the first time, in 2009 we included questions on the specific financial incentives offeredtoemployeeswhocompleteahealth risk assessment. Some large firms offering financial incentives 13 provide the following incentives for employees: a smaller share of the HEALTH AFFAIRS ~ Web Exclusive w1009

9 EXHIBIT 6 Among Firms Offering Health Benefits, Percentage Of Firms That Offer Employees Health Risk Assessments Or Offer Financial Incentives To Complete Assessments, By Firm Size And Region, 2009 Firm size/region Firm size workers 1,000 4,999 workers 5,000 or more workers Offer employees option to complete health risk assessment (%) 49 b 65 b 75 b Offer financial incentives to employees who complete a health risk assessment (%) a 29 b 40 b 48 b All small firms (3 199 workers) All large firms (200+ workers) 14 b 7 b 55 b 34 b Region Northeast Midwest South West 6 b b All firms SOURCE: Henry J. Kaiser Family Foundation/Health Research and Educational Trust Survey of Employer-Sponsored Health Benefits, NOTES: A health risk assessment includes questions on medical history, health status, and lifestyle, and is designed to identify the health risks of the person being assessed. Data are weighted by employers; see text. a Among firms offering employees the option to complete a health risk assessment. b Estimate is statistically different from estimate for all other firms not in the indicated size or region (p < 0.05). premium (27 percent), a smaller deductible (7 percent), and a lower coinsurance rate (2 percent). Health risk assessments may also be used to encourage employees to participate in wellness programs. About 38 percent of firms reported that they do so, with 33 percent of small firms and 61 percent of large firms using health risk assessments for this purpose. Looking at when employees take risk assessments, 19 percent of firms require employees to do so during open enrollment, and 13 percent require that the assessment be taken during another specified time frame; the remaining two-thirds of firms reported that there is no specified time frame. Wellness programs. The majority of employers offering health benefits (58 percent) 14 offer at least one of the following wellness programs in 2009: weight-loss programs, gym membership discounts or on-site exercise facilities, smoking cessation programs, personal health coaching, classes in nutrition or healthy living, Web-based resources for healthy living, or a wellness newsletter. The percentage of large firms offering wellness benefits rose from 88 percent in 2008 to 93 percent in 2009, while there was no statistically significant increase among small firms (53 percent to 57 percent; data not shown). Among firms offering health benefits, relatively few firms offering wellness benefits offer employees incentives to participate: 4 percent reduce the premium share the worker must pay; 1 percent lower the worker s deductible; and 10 percent offer gift cards, travel, merchandise, or cash. Among firms that offer a highdeductible plan with savings option, 1 percent offer workers who participate in wellness programs higher HSA or HRA contributions. On-site health clinics. For the first time, the survey also asked whether the largest firms have an on-site health clinic for workers at any of their major locations. Among firms w September 2009

10 with 1,000 or more employees, 20 percent have such a clinic, defined as one at a workplace staffed by health professionals such as nurses or doctors where employees can receive health care for either work-related or other illnesses. Seventy-nine percent of firms with workplace clinics report that employees may receive treatment for non-work-related illnesses at the on-site clinic (data not shown). Findings: Other Employer Practices Employers response to the economic downturn. A few new questions were included to enable us to learn whether employers have changed their benefits in response to the economic downturn. Roughly a fifth of employers (21 percent) said that in response to the downturn, they reduced the scope of health benefits or increased cost sharing, and 15 percent reported that they increased the share of the premium a worker has to pay for health insurance. Large firms were more likely than small firms to report increasing the worker s share of the premium (22 percent versus 15 percent; data not shown). We did not ask if employers downsized or changed the size of their workforces. Enrollment incentives. In 2009 the survey included questions about policies that may be used to discourage enrollment in coverage or encourage enrollment in single rather than family coverage. Sixteen percent of firms vary the contribution for family coverage based on whether an employee s family member has the option of getting insurance from another source, such as another employer, and 18 percent of firms reported that they provide additional compensation or benefits to employees if they elect not to participate in their firm s health benefits. Only 4 percent of firms provide additional compensation or benefits to employees if they elect single rather than family coverage. These percentages do not vary greatly from those reported in 2004, when the questions were last asked. Twenty-one percent of employers said that they are very likely to increase the amount employees pay for premiums. Market turnover. Sixty-two percent of firms offering health benefits have shopped for a new health plan or insurance carrier in the past year. Small firms are more likely (63 percent) than large firms (48 percent) to have shopped around. Among those firms that have shopped for a new carrier or health plan in the past year, 20 percent changed insurance carriers and 31 percent changed the type of plan; small firms were more likely (31 percent) than large firms (20 percent) to change the type of plan they offered. Employers opinions. Each year the survey asks employers how likely they are to make a variety of changes to their health plans in the next year. Twenty-one percent of employers said that they are very likely to increase the amount employees pay for premiums; a much higher percentage of large employers (43 percent) than small firms (20 percent)reportedbeingverylikelytomake this change. Small percentages of employers reported that they are very likely to restrict employee eligibility for coverage (4 percent) or drop coverage entirely (2 percent). Among firmsnotcurrentlyofferinganhdhp/hra,5 percent report being very likely to offer such a plan in the next year. Similarly, among firms not offering an HSA-qualified HDHP, 6 percent report being very likely to offer one in the next year. Concluding Comments Although 2009 is another year of moderate premium growth for family coverage, cost sharing continues to increase as more workers face deductibles of $1,000 or more and higher office-visit copayments. Despite the economic downturn, the percentage of firms offering health benefits and the percentage of workers covered by insurance offered by their employer remains steady, including the offer and enrollment rates for high-deductible plans with a savings option, which may indicate a strong commitment by employers to maintaining workers benefits. It may also reflect the possi- HEALTH AFFAIRS ~ Web Exclusive w1011

11 bility that some employers made decisions about health benefits before the implications of the worsening economy were fully apparent. In addition, the survey collects information only from firms that are still in business and does not estimate the number of workers whonolongerhavecoverageasaresultoffirm closures or downsizing. However, some firms surveyed reported reducing the scope of benefits offered, increasing cost sharing, or increasing the amount workers have to pay for coverage, in response to the economic downturn. The survey will continue to monitor the health benefits offered by employers to assess the continuing impact of the recession and the future impact of health reform efforts. NOTES 1. Kaiser Commission on Medicaid and the Uninsured. The uninsured: a primer. Menlo Park (CA): Kaiser Family Foundation; 2008 Oct [cited 2009 Jul 14]. Available from: uninsured/upload/ pdf 2. For more details, see the Appendix, online at hlthaff.28.6.w1002/dc2 3. Federal law requires a deductible of at least $1,150 for single coverage and $2,300 for family coverage for HSA-qualified HDHPs in Thedifferencebetweenthe2008and2009average premium value for family coverage is statistically significant (p < 0.05). 5. Bureau of Labor Statistics. Consumer Price Index, U.S. city average of annual inflation (April to April). Washington (DC): United States Department of Labor; 2009 [cited 2009 Aug 19]. Available from: survey=ce 6. Bureau of Labor Statistics. Seasonally adjusted data from the Current Employment Statistics Survey (April to April). Washington (DC): United States Department of Labor; 2009 [cited 2009 Aug 19]. Available from: PDQ/outside.jsp?survey=cu 7. TheuseoftheApril-to-Apriltimeperiodisconsistent with our previous practice. We note, however, that the May-to-May inflation estimate is lower ( 1.3 percent). 8. The HDHP/SO premium averages do not include any employer contributions to savings options. 9. There are two types of deductibles for family coverage: an aggregate deductible where all covered expenses from family members count toward meeting the deductible amount, and a separate per person deductible where each family member must meet his or her own deductible amount before coverage begins. 10. The average copayments and the average coinsurance for primary and specialty care and hospital admissions include workers who may have morethanonetypeofcostsharing. 11. The 2009 survey asks about hospital and outpatient cost sharing slightly differently than in the past. Previously, the question asked respondents to select from a list of types of cost sharing, such as separate deductibles, copayments, coinsurance, and per diem payments (for hospitalization only). To better capture the prevalence of combinations of types of cost sharing, the survey was changed to ask a series of yes or no questions. Therefore, the distribution of workers with types of cost sharing does not equal 100 percent, because workers may face a combination of types of cost sharing. The percentages presented do not include workers who have both copayments and coinsurance. 12. For more information on HDHP/HRAs and HSA-qualified HDHPs, see Kaiser Family Foundation and Health Research and Educational Trust. Employer health benefits: 2009 annual survey.menlopark(ca):kaiser/hret;2009 Sep [cited 2009 Sep 15]. Available from: Data are insufficient to report the percentage of small firms (3 199 workers) offering specific financial incentives for completing a health risk assessment. 14. In 2009 respondents were given the option to report other types of wellness programs. If firms that responded other are included, the percentage offering at least one wellness benefit is 60 percent. w September 2009