20.3% $4,728 T H E K A I S E R F A M I LY F O U N D A T I O N - AND - H E A LT H R E S E A R C H A N D EDUCATIONAL TRUST Employer Health 1999 Benefits 1999 Annual Survey 1,023 - a n d - HEALTH RESEARCH AND E DUCATIONAL T RUST Formerly produced by KPMG Peat Marwick Primary Authors: kaiser family foundation Larry Levitt Janet Lundy Catherine Hoffman health research and educational trust Jon R. Gabel Heidi H. Whitmore Jeremy D. Pickreign Kimberly M. Hurst (now at Palmer and Cay) The authors thank Jain Wang and Samantha Hawkins for their research assistance. The Kaiser Family Foundation, based in Menlo Park, California, is an independent national health care philanthropy and is not associated with Kaiser Permanente or Kaiser Industries. The Health Research and Educational Trust is a private, not-for-profit organization involved in research, education, and demonstration programs addressing health management and policy issues. Founded in 1944, HRET, an affiliate of the American Hospital Association, collaborates with health care, government, acade- mic, business, and community organizations across the United States to conduct research and disseminate findings that help shape the future of health care. Copyright © 1999 Henry J. Kaiser Family Foundation, Menlo Park, California, and Health Research and Educational Trust, Chicago, Illinois. All rights reserved. Printed in the United States of America. ISBN 0-87258-755-X American Hospital Association/Health Research and Educational Trust Catalog Number 097501 T H E K A I S E R F A M I LY F O U N D A T I O N - AND - H E A LT H R E S E A R C H A N D EDUCATIONAL TRUST Employer Health Benefits 1999 Annual Survey - a n d - HEALTH RESEARCH AND E DUCATIONAL T RUST Formerly produced by KPMG Peat Marwick T A B L E O F C O N T E N T S L I S T O F E X H I B I TS iv I N T R O D U C T I O N TO H I G H L I G H TS 1 MA J O R F I N D I N G S 2 SECTION 1 Survey Methods 5 SECTION 2 Cost of Health Insurance 11 SECTION 3 Health Benefits Offer Rates 23 SECTION 4 Employee Coverage, Eligibility, and Participation 29 SECTION 5 Health Insurance Choice 41 SECTION 6 Market Shares of Health Plans 55 SECTION 7 Employee Contributions for Premiums and Cost Sharing 59 SECTION 8 Health Benefits 81 ii T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T SECTION 9 COBRA Coverage 85 SECTION 10 Prescription Drug and Mental Health Carve-out Plans 89 SECTION 11 Plan Funding, Direct Contracting, and the Use of Pre-existing Condition Clauses 99 SECTION 12 Retiree Health Benefits 117 SECTION 13 The Role of NCQA Accreditation and HEDIS Performance Measures 129 SECTION 14 Flexible Benefits and Cafeteria Plans 143 SECTION 15 Consumer Protections 149 SECTION 16 Employer Insecurity About the Future 157 iii T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T L I S T O F E X H I B I T S SURVEY METHODS Exhibit 2.10 21 exhibit 1.1 8 Monthly and Annual Premiums for Selected Characteristics of the Survey Workers in Conventional, HMO, PPO, Sample, 1999 and POS Plans, by Firm Size, 1999 Exhibit 1.2 9 exhibit 2.11 22 Distribution of Employers, Workers, and Monthly and Annual Premiums for Workers Covered by Health Insurance, Workers in Conventional, HMO, PPO, by Firm Size, 1999 and POS Plans, by Industry, 1999 CO ST O F H E A LT H I N S U R A N C E H E A LT H B E N E F I TS O F F E R R AT E S exhibit 2.1 14 exhibit 3.1 25 Percentage Change in Health Insurance Percentage of Firms Offering Health Premiums from Previous Year, by Plan Benefits, by Firm Size, 1996, 1998, and Type, 1988-1999 1999 exhibit 2.2 14 exhibit 3.2 26 Increases in Health Insurance Premiums Percentage of Small Firms (3-199 workers) Compared to Other Indicators, 1988-1999 in Which Workers Are Offered Health Insurance, by Percentage of Workforce exhibit 2.3 15 that is Low Income, 1999 Percentage Change in Premiums, by Plan Type and Firm Size, 1999 exhibit 3.3 27 Percentage of Small Firms (3-199 workers) exhibit 2.4 16 in Which Workers Are Offered Health Premium Increases by Plan Type and Insurance, 1999 Funding Arrangement, 1999 exhibit 3.4 28 exhibit 2.5 17 Small Firms’ Reasons For Not Offering Premium Increases for Covered Workers, Health Insurance, 1999 by Plan Type, 1988-1999 exhibit 2.6 18 Premium Increases from Previous Year, E M P L OY E E CO V E R A G E , by Firm Size, 1996, 1998, and 1999 E L I G I B I L I T Y , A N D PA R T I C I PAT I O N exhibit 2.7 18 exhibit 4.1 32 Premium Increases from Previous Year, Percentage of Workers Covered by Their by Region, 1996, 1998, and 1999 Employer’s Health Benefits, in Firms exhibit 2.8 19 Both Offering and Not Offering Health Premium Increases from Previous Year, Benefits, 1996, 1998, 1999 by Industry, 1996, 1998, and 1999 exhibit 4.2 33 exhibit 2.9 20 Percentage of Workers in Firms Offering Monthly and Annual Premiums for Health Benefits Who Are Covered by Workers in Conventional, HMO, PPO, Their Employer’s Health Plan, by Firm and POS Plans, by Region, 1999 Size, 1998-1999 iv T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T exhibit 4.3 34 exhibit 5.5 47 Eligibility, Take-Up Rates, and Of Firms Offering a Conventional, Coverage, 1999 HMO, PPO, or POS Plan, Percentage of Covered Workers With a Choice of exhibit 4.4 35 Health Plans, by Firm Size, 1999 Percentages of Workers Employed In Firms That Offer Part-time exhibit 5.6 48 and Temporary Workers Health Of Firms Offering a Conventional Plan, Coverage, 1999 Percentage of Covered Workers With a Choice of Health Plans, by Number of exhibit 4.5 36 Plans Offered, 1996, 1998, and 1999 Average Waiting Period for Health Coverage, 1999 exhibit 5.7 48 Of Firms Offering an HMO Plan, exhibit 4.6 37 Percentage of Covered Workers With a Percentage of Workers Covered by Health Choice of Health Plans, by Number of Benefits, Take-up Rates, and Eligibility Plans Offered, 1996, 1998, and 1999 for Health Benefits, by Percentage of Workforce that is Low Income, 1999 exhibit 5.8 49 Of Firms Offering a PPO Plan, exhibit 4.7 38 Percentage of Covered Workers With a Percentages of Workers Employed in Choice of Health Plans, by Number of Firms That Offer Dependents and Plans Offered, 1996, 1998, and 1999 Nontraditional Partners Health Coverage, 1999 exhibit 5.9 49 Of Firms Offering a POS Plan, Percent- exhibit 4.8 39 age of Covered Workers With a Choice of Percentage of Workers Employed in Health Plans, by Number of Plans Firms That Offer Same Sex and Offered, 1996, 1998, and 1999 Unmarried Heterosexual Couples Health Coverage, 1999 exhibit 5.10 50 Percentage of Covered Workers with Choice of Health Plan, by Region, 1999 H E A LT H I N S U R A N C E C H O I C E exhibit 5.11 51 Reasons Firm Offers Only One Plan, exhibit 5.1 44 by Firm Size, 1999 Percentage of Covered Workers With a Choice of Conventional, HMO, PPO, exhibit 5.12 52 or POS Plans, 1988-1999 Contribution Policies for Covered Workers Who Are Offered a Choice of exhibit 5.2 45 Health Plans, by Firm Size, 1999 Percentage of Covered Workers With a Choice of Health Plans, 1988-1999 exhibit 5.13 53 Contribution Policies for Covered exhibit 5.3 45 Workers in Firms Offering a Choice of Percentage of Employers Providing Health Plans, 1999 a Choice of Health Plans, by Firm Size, 1999 exhibit 5.14 54 For Firms Contributing the Same Dollar exhibit 5.4 46 Amount, Is Contribution Policy Set at the Percentage of Covered Workers with a Cost of the Lowest Cost Plan Firm Offers, Choice of Health Plans, by Firm Size, By Firm Size, 1999 1988-1999 v T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T MA R K E T S H A R E S O F exhibit 7.10 68 H E A LT H P L A N S Percentage of Covered Workers in Plans Where Employer Pays Entire Cost of exhibit 6.1 57 Single Plan Coverage, All Small Firms Health Plan Enrollments for Covered (3-199 Workers), 1988, 1996, and 1999 Workers, 1988-1999 exhibit 7.11 68 exhibit 6.2 58 Percentage of Covered Workers in Plans Health Plan Enrollments, by Firm Size, Where Employer Pays Entire Cost of Region, and Industry, 1999 Single Plan Coverage, All Large Firms (200+ Workers), 1988, 1996, and 1999 exhibit 7.12 69 E M P L OY E E CO N T R I B U T I O N S F O R Percentage of Covered Workers in Plans P R E M I U M S A N D CO S T S H A R I N G Where Employer Pays Entire Cost of Family Plan Coverage, All Small Firms exhibit 7.1 62 (3-199 Workers), 1988, 1996, and 1999 Average Monthly Worker Contribution for Single and Family Coverage, exhibit 7.13 69 1988-1999 Percentage of Covered Workers in Plans Where Employer Pays Entire Cost of exhibit 7.2 62 Family Plan Coverage, All Large Firms Percentage of Premiums Paid by Covered (200+ Workers), 1988, 1996, and 1999 Workers for Single and Family Coverage, 1988-1999 exhibit 7.14 70 Percentage of Premium Paid by exhibit 7.3 63 Firm for Typical Covered Worker in Average Monthly Worker Premium Conventional, HMO, PPO, and POS Contributions, by Firm Size, 1999 Plans, by Region, 1999 exhibit 7.4 64 exhibit 7.15 71 Average Monthly Worker Premium Percentage of Premium Paid by Contributions, by Region, 1999 Firm for Typical Covered Worker in Conventional, HMO, PPO, and POS exhibit 7.5 65 Plans, by Industry, 1999 Monthly Worker Contributions for Single and Family Coverage in Conventional exhibit 7.16 72 and HMO Plans, 1988-1999 Average Annual Deductibles for Coverage in Conventional, PPO, exhibit 7.6 65 and POS Plans, 1988-1999 Monthly Worker Contributions for Single and Family Coverage in PPO and POS exhibit 7.17 72 Plans, 1988-1999 Percentage of Covered Workers Facing HMO Copayments for Physician Visits, exhibit 7.7 66 1996-1999 Percentage of Premium Paid by Firm for Typical Covered Worker in Conventional, exhibit 7.18 73 HMO, PPO, and POS Plans, by Firm Average Annual Deductible for Typical Size, 1999 Covered Worker, by Firm Size, 1999 exhibit 7.8 67 exhibit 7.19 74 Percentage of Premium Paid by Workers Average Annual Deductible for Typical in Conventional and HMO Plans, Covered Worker, by Region, 1999 1988-1999 exhibit 7.20 75 exhibit 7.9 67 Percentage of Covered Workers Facing Percentage of Premium Paid by Workers HMO Copayments for Physician Visits, in PPO and POS Plans, 1988-1999 by HMO Type, 1999 vi T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T exhibit 7.21 76 exhibit 10.3 93 Percentage of Covered Workers Percentage of Those Covered Workers in Facing Various Coinsurance Rates in Prescription Drug Carve-out Plans with Conventional Plans, by Firm Size, 1999 Mandatory Use of Generic Drugs, 1998 and 1999 exhibit 7.22 77 Percentage of Covered Workers exhibit 10.4 94 Facing Coinsurance Rates and Percentage of Covered Workers in Firms Copayments in PPO Plans, by Firm that Carve Out Their Prescription Drug Size, 1999 Benefits, by Region and Firm Size, 1999 Exhibit 7.23 78 exhibit 10.5 95 Percentage of Covered Workers Facing Percentage of Covered Workers in Firms Coinsurance Rates and Copayments in that Carve Out Mental Health Benefits, POS Plans, by Firm Size, 1999 by Plan Type, 1998 and 1999 exhibit 7.24 79 exhibit 10.6 96 Percentage of Overall Single and Family Percentage of Covered Workers in Firms Premiums Paid by Firm, by Percentage that Carve Out Their Mental Health of Workforce that is High and Low Benefits, by Region and Firm Size, 1999 Income, 1999 Exhibit 10.7 97 Percentage of Covered Workers with Various Outpatient Mental Health Visit H E A LT H B E N E F I TS Maximums, 1999 exhibit 8.1 83 How Do Levels of Benefits for Covered Workers Compare to Last Year, by Plan P L A N FU N D I N G , D I R E C T Type, 1999 CO N T R AC T I N G , A N D T H E U S E exhibit 8.2 84 O F P R E - E X I S T I N G CO N D I T I O N Covered Benefits for Covered Workers in CLAUSES Conventional, HMO, PPO, and POS exhibit 11.1 102 Plans, by Firm Size, 1999 Percentage of Covered Workers in Partly or Completely Self-Insured Plans, by Plan Type, 1988-1999 CO B R A CO V E R A G E exhibit 11.2 103 exhibit 9.1 87 Percentage of Covered Workers in Partly Workers Covered By COBRA, by Firm or Completely Self-Insured Conventional Size, Region, and Industry, 1999 Plans, by Firm Size, 1996, 1998 and 1999 exhibit 11.3 103 Percentage of Covered Workers in Partly or Completely Self-Insured HMO Plans, P R E S CR I P T I O N D R U G A N D M E N TA L by Firm Size, 1996, 1998, and 1999 H E A LT H C A R V E - O U T P L A N S exhibit 11.4 104 exhibit 10.1 92 Percentage of Covered Workers in Partly Percentage of Covered Workers With or Completely Self-Insured PPO Plans, Prescription Drug Carve-outs, by Plan by Firm Size, 1996, 1998, and 1999 Type, 1998 and 1999 exhibit 11.5 104 exhibit 10.2 93 Percentage of Covered Workers in Partly Percentage of Those Covered Workers or Completely Self-Insured POS Plans, in Prescription Drug Carve-out Plans by Firm Size, 1996, 1998, and 1999 with Mail Order Discount Plans, 1998 and 1999 vii T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T exhibit 11.6 105 exhibit 11.16 115 Percentage of Covered Workers Under Percentage of Covered Workers in Different Funding Arrangements in PPO Plans with Pre-existing Condition Conventional, HMO, PPO, and POS Limitations and Months to Wait Before Plans, by Firm Size, 1999 Coverage, 1999 exhibit 11.7 107 Percentage of Covered Workers Under Different Funding Arrangements in R E T I R E E H E A LT H B E N E F I TS Conventional, HMO, PPO, and POS Plans, by Industry, 1999 exhibit 12.1 120 Percentage of Employers Offering Retiree exhibit 11.8 109 Health Benefits, by Firm Size, 1988-1999 Percentage of Covered Workers in HMO Plans Where Firm Contracts Directly exhibit 12.2 121 with Doctors and Hospitals, by Firm Percentage of Employers Offering Retiree Size, 1998 and 1999 Health Benefits, by Region, Firm Size, and Industry, 1999 exhibit 11.9 109 Percentage of Covered Workers in POS exhibit 12.3 122 Plans Where Firm Contracts Directly Percentage of Large Employers Offering with Doctors and Hospitals, by Firm Retiree Health Benefits to Early and Size, 1998 and 1999 Medicare-Eligible Retirees, Among Large Firms Offering Retiree Coverage, by exhibit 11.10 110 Firm Size, Region, and Industry, 1999 Percentage of Covered Workers in Firms That Contract Directly with Doctors and exhibit 12.4 123 Hospitals in their HMO and POS Plans, In Firms Offering Retiree Benefits, by Region and Firm Size, 1999 Changes Made in Past Two Years to Retiree Health Coverage: Capped the exhibit 11.11 111 Maximum Employer Contribution For Percentage of Covered Workers with Retirees, in Large Firms, by Firm Size, Pre-existing Condition Clauses, by Plan Region, and Industry, 1999 Type, 1996, 1998, and 1999 exhibit 12.5 124 exhibit 11.12 112 In Firms Offering Retiree Benefits, Percentage of Covered Workers with Changes Made in Past Two Years to Pre-existing Condition Clauses, by Firm Retiree Health Coverage: Terminated Size, 1999 Conventional Plan Coverage For Retirees in Large Firms, by Firm Size, Region, exhibit 11.13 112 and Industry, 1999 Percentage of Covered Workers with Pre-existing Condition Clauses, by exhibit 12.6 125 Region, 1999 In Firms Offering Retiree Benefits, Changes Made in Past Two Years to exhibit 11.14 113 Retiree Health Coverage: Introduced Percentage of Covered Workers in Medicare Risk HMO To Retirees in Conventional Plans with Pre-existing Large Firms, by Firm Size, Region, and Condition Limitations and Months to Industry, 1999 Wait Before Coverage, 1999 Exhibit 12.7 126 exhibit 11.15 114 In Firms Offering Retiree Benefits, Percentage of Covered Workers in Changes Made in Past Two Years to POS Plans with Pre-existing Condition Retiree Health Coverage: Increased the Limitations and Months to Wait Before Share of Contributions for Premiums Coverage, 1999 Required by Retirees in Large Firms, by Firm Size, Region, and Industry, 1999 viii T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Exhibit 12.8 127 exhibit 13.7 140 Percentage of all Large Firms (200 or Percentage of Covered Workers in more Workers) Offering Retiree Benefits, Firms Citing NCQA Accreditation as an by Percentage of Workforce that is High Important Factor in Plan Selection, by and Low Income, 1999 Percentage of Workforce that is High and Low Income, 1999 exhibit 13.8 141 THE ROLE OF NCQA Percentage of Covered Workers in AC CR E D I TAT I O N A N D H E D I S Firms Citing HEDIS Data as an Important Factor in Plan Selection, PERFORMANCE MEA SURE S by Percentage of Workforce that is High exhibit 13.1 132 and Low Income, 1999 Percentage of Covered Workers in Firms that are Familiar with NCQA Accreditation, by Firm Size, 1996, 1998, and 1999 F L E X I B L E B E N E F I TS A N D CAFETERIA PLANS exhibit 13.2 133 Percentage of Covered Workers in Firms exhibit 14.1 145 That Are Familiar With HEDIS, by Firm Percentage of Workers in Firms Offering Size, Region, and Industry, 1999 Flexible Benefit Plans, by Firm Size, 1996, 1998, and 1999 exhibit 13.3 134 Percentage of Covered Workers in exhibit 14.2 146 Firms Where NCQA Accreditation Percentage of Workers in Firms Offering is a Mandatory Requirement, for Firms Flexible Benefit Plans, by Firm Size and Offering an HMO or POS Plan, by Firm Industry, 1999 Size, Region, and Industry, 1999 exhibit 14.3 147 exhibit 13.4 135 Percentage of Workers in Firms Offering Percentage of Covered Workers in Cafeteria Plans, by Firm Size, Region, Firms Where Firm Contributes More and Industry, 1999 to NCQA-Accredited Plans, for Firms Exhibit 14.4 148 Offering an HMO or POS Plan, by Percentage of Workers Offered Flexible Firm Size, Region, and Industry, 1999 Benefit Plans, by Percentage of Workforce exhibit 13.5 136 that is High Income, 1999 Percentage of Covered Workers in Firms Citing the Importance of Features When Choosing a Health Plan, by Firm Size, 1999 CO N S U M E R P R O T E C T I O N S Exhibit 13.6 138 exhibit 15.1 152 Percentage of Covered Workers in Firms Percentage of Covered Workers Enrolled Citing the Importance of Features When in Firm’s Largest HMO Plan Where Choosing a Health Plan, by Region, 1999 Their OB/GYN Can Act as Primary Care Physician, by Region, 1998 and 1999 exhibit 15.2 152 Percentage of Covered Workers Enrolled in Firm’s Largest HMO Plan Where Their Specialist Can Act as Primary Care Physician, by Region, 1998 and 1999 ix T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T exhibit 15.3 153 Exhibit 16.4 162 Percentage of Covered Workers in HMO Percentage of Firms Worried about Plans Where Alternative Providers Can Various Issues: Firm Will Have to Switch Act as Primary Care Physician, by Firm Plans Because of Concerns about Costs, Size, Region, and Industry, 1999 by Firm Size, Region, and Industry, 1999 Exhibit 15.4 154 Exhibit 16.5 163 Percentage of Firms Favoring Various Percentage of Covered Workers in Firms Consumer Protections: Paying For Concerned that Costs Will Increase Emergency Room Visit When Someone Faster Than Firm Can Afford, by Percent- Believes He Needs Immediate Medical age of Workforce that is High and Low Attention, by Firm Size, Region, and Income, 1999 Industry, 1999 Exhibit 16.6 164 Exhibit 15.5 155 Percentage of Workers in Firms Percentage of Firms Favoring Various Concerned that Firm Will Have to Cut Consumer Protections: Allowing People Back Scope of Benefits or Contribution to Appeal Plan Decisions To Independent Amount, by Percentage of Workforce that Reviewer, by Firm Size, Region, and is High and Low Income, 1999 Industry, 1999 Exhibit 16.7 165 Exhibit 15.6 156 Percentage of Covered Workers in Firms Percentage of Firms Favoring Various Concerned that Firm Will Have to Switch Consumer Protections: Allowing Patients Plans Because of Concerns about the to Sue Health Plan For Malpractice, by Quality of Care, by Percentage of Work- Firm Size, Region, and Industry, 1999 force that is High and Low Income, 1999 Exhibit 16.8 166 Percentage of Covered Workers in E M P L OY E R I N S E C U R I T Y Firms Concerned that Firm Will ABOUT THE FUTURE Have to Switch Plans Because of Costs, by Percentage of Workforce that is High Exhibit 16.1 159 and Low Income, 1999 Percentage of Firms Worried about Various Issues: Amount Firm Pays for Health Insurance Will Increase Faster than Firm Can Afford, by Firm Size, Region, and Industry, 1999 Exhibit 16.2 160 Percentage of Firms Worried about Various Issues: Firm Will Have to Cut Back Scope of Benefits or Contribution Amount, by Firm Size, Region, and Industry, 1999 Exhibit 16.3 161 Percentage of Firms Worried about Various Issues: Firm Will Have to Switch Plans Because of Concerns about Quality of Care, by Firm Size, Region, and Industry, 1999 x T H H EK K AS S E RF A A MLY F OO U N D A I OO N- AA ND -- H E A LTT H R R S E A RA R CA N D N D UE D T I C A T I OTN A S TT R U S T T E A I I E R F M I I LY F U N D A T T I N - N D A L H E E S E CH H A E CA U ONAL RUL Introduction and Highlights More than 152 million American workers and their dependents receive their health insurance coverage through their employer. From 1991 to 1998, KPMG Peat Marwick LLP, an international con- sulting and accounting firm, surveyed a random sample of large U.S. employers to track changes in health insurance coverage. In 1998, KPMG divested itself of its Compensation and Benefits Prac- tice and donated the annual survey of health benefits to the Health Research and Educational Trust (HRET), a non-profit research organization. Beginning this year, the survey will be conducted under a partnership between the Kaiser Family Foundation, a health care philanthropy and policy research organization, and HRET. The new survey will continue a core of questions from prior KPMG surveys, but has been expanded to include small employers and a variety of policy-oriented questions. The Kaiser Family Foundation/Health Research and Educational Trust 1999 Annual Employer Health Benefits Survey reports find- ings from a survey of 2,694 randomly selected public and private employers (including 1,939 who responded to the full survey and 755 who responded to one question regarding the offering of health coverage). National Research LLC, a Washington-based survey firm, conducted interviews with employee benefit managers from February through June of 1999. Firms range in size from “mom and pop” enterprises with 3 workers to “jumbo” corporations with as many as several hundred thousand employees. 1 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T COST INCREA SE S • Average worker contributions for health • During the past year, 84% of employees • Premiums increased 4.8% from Spring insurance changed little from 1998. did not experience a change in the level 1998 to Spring 1999. Smaller firms The average worker contributed $35 of covered benefits, while 6% experi- (defined as firms with 3-199 workers) per month for single coverage and $145 enced a decline. However, mental experienced substantially higher premi- for family coverage. During the past few health benefits have declined over the um increases of 6.9% compared to all years, there has been a substantial last several years. Today, only 21% of large firms (4.1%). The smallest of firms increase among small employers that employees in all large firms (200 or more (those with 3-9 employees) saw the offer single coverage with no required employees) have mental health benefits highest increases (9.2%). Costs rose for contribution from employees. with unlimited outpatient visits, com- self-insured health plans by only 3.7%, pared to 36% in 1991. while increases for fully insured plans (where an insurer bears the financial COVERAGE, BENEFITS, • 37% of Americans with employer-based risk) averaged 5.8%. Overall, premiums AND PLAN ENROLLMENTS insurance are covered for abortion ser- increased faster than at any time since vices. Firms report that employees in • There was no statistically significant 1994, both nominally and after adjust- all large firms are 3 to 4 times as likely change in the extent of employer-based ing for general inflation. to be covered for abortion services as insurance coverage. Key coverage employees in small firms. At the same measures include: the percentage of • As Congress debates the future of the time, most employees have coverage for small firms offering coverage, the Medicare health program for the oral contraceptives, though fewer are cov- percentage of workers who are covered elderly, firms with more than 200 ered for all forms of reversible contracep- by their employer’s health plan, and the workers took a number of actions to tion. Employees in Health Maintenance percentage of eligible workers who control the cost of retiree health insur- Organizations (HMOs) and Point-of-Ser- elect coverage. Although various key ance coverage. During the past 2 years, vice (POS) plans are more likely to have economic measures have improved since 35% of those large firms that offered contraception coverage than those in 1996 (the U.S. economy has added 9 retiree coverage capped their maxi- conventional (also known as indemnity million new jobs, inflation adjusted mum contribution, and 7% dropped or fee-for-service) plans or Preferred wages have increased 6%, and the conventional coverage in favor of man- Provider Organization (PPO) plans. unemployment rate has fallen to the aged care plans. 41% of all large firms lowest level in 30 years), there has been offer retiree coverage in 1999, a figure no statistically significant change in unchanged since 1996. health insurance coverage. 2 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T • During the Spring of 1999, about 4.7 health care costs will increase faster than THE PATIENTS’ RIGHTS DEBATE million former employees relied on they can afford, 70% say they are wor- • During this year of legislative debate on COBRA – which permits former work- ried they will have to cut back the scope patient protection proposals, a majority ers to continue coverage at full cost to of benefits they offer or the amount they of employers support key features of the employee — for their coverage. For contribute towards health insurance for this legislation: making it easier to get every 100 active workers with job-based their workers, and 65% say they are wor- emergency room bills paid, giving coverage, there are three former workers ried they will have to switch health plans patients the right to an independent paying for COBRA coverage. because of costs. At the same time, 26% appeal, and expanding the right to of firms say they are worried they will sue health plans. Support increased • During the past year, conventional cov- have to switch health plans because of from last year – especially for the right erage declined to 9% of enrollment, concerns about quality of care. to sue – and is higher among smaller down from 14% in 1998 and 73% in employers than larger firms. The per- 1988. Preferred Provider Organizations 1 • The “quality movement” in purchasing centage of HMO members who could (PPOs) market share increased 3 per- of health plans is not picking up steam. designate their OB/GYN as their primary centage points to 38%, making it the When employers select plans, accredi- care physician increased from 49% to most common type of health plan tation and standardized plan data on 67%, likely due to state legislation and among people with employer-sponsored quality of care continue to play a rela- voluntary efforts by health plans. About coverage. The percentage of workers who tively minor role. Among employers one-quarter of HMO members (who have have the option of selecting a conven- offering an HMO or POS plan, just 12% chronic conditions) are enrolled in a tional plan has declined from 52% in of workers work for firms which require plan where they can designate a special- 1996 to 26% in 1999. plan accreditation by the National ist as their primary care physician. Committee for Quality Assurance (NCQA). When choosing a health plan, THE TRADEOFF BETWEEN employers rate the cost of the plan and QUALIT Y AND COSTS the number and type of physicians in the plan more highly than a plan’s • Most employers are at least somewhat NCQA accreditation status or how worried about future trends in health the plan is rated using HEDIS data. care costs and the implications of those Surprisingly, employers report decreased cost increases, though fewer express familiarity with NCQA accreditation concern about quality of care issues. from last year. 72% of all firms say they are worried that 3 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T 76.7% 2,145,784 Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Survey Methods 4.37 section 1 17,839 5 section one Employer Health Benefits 1 9 9 9 A n n u a l S u r v e y 1 Survey Methods Survey Methods Th e K a i s e r Fa m i ly F o u n d at i o n a n d Th e H e a lt h R e s e a r c h a n d E d u c at i o n a l Tr u s t ( K a i s e r / H R E T ) a r e s p o n s o r i n g t h e s u r v e y o f e m ploye r - s p o n s o r e d h e a lt h b e n e - f i t s s u p p o r t e d f o r m a n y y e a r s b y K P M G P e a t M a r w i c k L L P, a n i n t e r n a t i o n a l c o n s u lt i n g a n d a c c o u n t i n g f i r m . In 1998, KPMG divested itself of its Compen- s at i o n a n d B e n e f i t s P r a c t i c e , a n d d o n at e d t h e a n n u a l s u r v e y o f h e a lt h b e n e f i t s to H R ET, a non-profit research organization affiliated with the Americ an Hos- pital Association. Beginning this year, the survey will be conducted under a pa r t n e r s h i p b e t w e e n H R E T a n d Th e K a i s e r Fa m i ly F o u n d at i o n , a h e a lt h c a r e phil anthropy and policy research organization that is not affiliated with Kaiser Permanente or Kaiser Industries. Th e n ew s u rvey w i l l co n t i n u e a co r e o f q u e st i o n s f r o m p r i o r K P M G s u rveys , b u t h a s b e e n e x pa n d e d to i n c lu d e small employers and a variety of policy-oriented questions. Kaiser/HRET asked each partic- Kaiser/HRET retained National both the 1998 and 1999 surveys. ipating company as many as Research LLC (NR), a Washing- The overall response rate was 400 questions about its largest ton, D.C.-based survey research 60 percent. conventional (or, indemnity) firm, to conduct telephone inter- plan, Health Maintenance views with human resource and Previous years’ experience has Organization (HMO), Preferred benefits managers. NR conduct- found that firms that decline to Provider Organization (PPO), ed interviews during the Spring participate in the study are and Point-of-Service (POS) of 1999. more likely not to offer health health plan. This year’s survey coverage. Therefore, one ques- included questions about cover- Kaiser/HRET drew its sample tion was asked of all firms age, eligibility, health plan from a Dun & Bradstreet list of where phone contact was made choice, enrollment patterns, the nation’s private and public but the firm declined to partic- premiums, employee cost shar- employers with three or more ipate. The question was, “Does ing, covered benefits, retiree workers. To increase precision, your company offer or con- health benefits, NCQA accredi- Kaiser/HRET stratified the sam- tribute to a health insurance tation, employers’ concerns, ple by industry and the number program as a benefit to your consumer protection, and flexi- of workers in the firm. employees?” A total of 2,694 ble benefits/spending accounts. Kaiser/HRET attempted to firms responded to this ques- repeat interviews with many of tion (including 1,939 who the 2,759 firms interviewed in responded to the full survey 1998 and replaced non- and 755 who responded to this responding firms with another one question). Their responses firm from the same industry are included in our estimates of and firm size. As a result, 1,377 the percentage of firms offering firms in this year’s total sample health coverage. of 1,939 firms participated in 6 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T section one Employer Health Benefits 1 9 9 9 A n n u a l S u r v e y 1 Throughout this report, exhibits Some exhibits in Health Bene- tion adjustment, an adjustment Survey Methods categorize data by industry, size fits 1999 do not sum up to 100 to firms with 3-9 workers is of firm, and region. Firm size percent due to rounding effects. applied. The adjustment con- definitions are as follows: 3-9 Throughout the report, while trols for the fact that firms with workers, Small; 10-24 workers, overall totals as well as totals for 3-9 workers that are in the panel Small; 25-49 workers, Small; size and industry are statistically (responded in both 1998 and 50-199 workers, Small; 200-999 valid, some breakdowns based 1999) are biased in favor of offer- workers, Midsize; 1,000-4,999 on industry may not be available ing a health plan. workers, Large; and 5,000 due to limited sample sizes. In or more workers, Jumbo. Occa- these instances, exhibits include The data were analyzed with sionally, firm size categories will the notation NSD (Not Suffi- SUDAAN, a statistical software be aggregated: 3-199 workers, All cient Data). program that computes appro- Small; or 200 or more workers, priate standard error estimates All Large. Exhibit 1.1 shows To control for item non- by controlling for the complex detailed characteristics of the response bias, Kaiser/HRET design of the survey. All statisti- survey sample. identified a select set of key cal tests were performed at the variables as needing complete 0.05 level. Two types of signifi- Exhibit 1.2 displays the distribu- information from all surveyed cance tests performed are the t- tion of the nation’s firms, work- firms. These variables include Test and the Chi-square test. ers, and workers covered by percentage changes in premium their employer’s health insur- costs for family coverage, premi- To further analyze changes ance. Among the approximately um amounts, and worker contri- in employer-sponsored health 5.5 million firms with 3 0r more bution amounts. On average, plans during the past few years, workers nationally, more than 2% of the observations are this report includes data from 75% are firms employing 3-9 imputed for any given variable. the 1993, 1996 and 1998 KPMG workers, though they employ The imputed values are deter- Surveys of Employer-Sponsored only 10% of workers and cover mined based on the distribution Health Benefits. For a longer- only 6% of employees with of the reported values within term perspective, we also use health insurance. In contrast, stratum defined by firm size and the 1988 survey of the nation’s jumbo firms (defined as firms region. employers conducted by the with 5,000 or more workers) rep- Health Insurance Association resent only .1% of employers but Because Kaiser/HRET selects of America (HIAA), on which employ nearly 37% of workers firms randomly, it is possible the KPMG and Kaiser/HRET sur- and cover about 40% of employ- through the use of statistical veys are based. Many of the ees. Therefore, the smallest weights to extrapolate the results questions in the HIAA, KPMG, firms will dominate any nation- to national (as well as regional, and Kaiser/HRET surveys are al statistics about what employ- industry, and firm size) aver- identical, as is the sample ers in general are doing. In con- ages. These weights allow design. Since Point-of-Service trast, jumbo employers are the Kaiser/HRET to present findings (POS) plans did not exist in most important employer group based on the number of workers 1988, this report includes no in calculating national statistics covered by health plans, the statistics for this plan type in regarding the typical employee number of total workers, and that year. or covered worker, since they the number of firms. The calcu- employ the largest percentage of lation of the weights followed a the nation’s workforce. common approach: (i) determi- nation of the basic weight, (ii) application of a non-response adjustment, and (iii) application of a post-stratification adjust- ment. Prior to the post-stratifica- 7 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T section one Employer Health Benefits 1 9 9 9 A n n ua l S u rve y 1 Exhibit 1.1 Selected Characteristics of the Survey Sample, 1999 Survey Methods Characteristic Sample Sample Percentage of Size Distribution Total for After Weighted Weighting Sample I N D U ST RY Mining/Construction/Wholesale 164 1,103,849 19.9% Manufacturing 266 392,321 7.1 Transportation/Communication/Utility 112 158,936 2.9 Retail 172 640,623 11.6 Finance 174 432,275 7.8 Service 412 2,145,784 38.7 State/Local Government 205 83,187 1.5 Health Care 246 466,540 8.4 High Tech 188 114,260 2.1 A L L I N D U ST R I E S 1,939 5,537,777 100% FIRM SIZE Small (3-9 Workers) 172 4,250,312 76.8% Small (10-24 Workers) 152 703,988 12.7 Small (25-49 Workers) 126 274,173 5.0 Small (50-199 Workers) 308 212,688 3.8 Midsize (200-999 Workers) 549 74,775 1.4 Large (1,000-4,999 Workers) 371 17,829 0.3 Jumbo (5,000+ Workers) 261 4,011 0.1 ALL FIRM SIZES 1,939 5,537,777 100% R EG I O N Northeast 374 1,134,588 20.5% Midwest 559 1,217,798 22.0 South 669 1,861,144 33.6 West 337 1,324,248 23.0 A L L R EG I O N S 1,939 5,537,777 100% source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. Note: Employers were oversampled for some characteristics and then weighted to reflect proportions of firms nationally. 8 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T section one Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 1.2 1 Distribution of Employers, Workers, and Workers Survey Methods Covered by Health Insurance, by Firm Size, 1999 200 to 999 50 to 199 1.4% 3.8% 1000 to 4999 0.3% 3 to 9 9.6% 10 to 24 25 to 49 5000+ 5.0% 5.1% 0.1% 5000+ 36.5% 25 to 49 4.8% 10 to 24 12.7% 50 to 199 9.9% 3 to 9 76.7% 1000 to 4999 16.9% 200 to 999 17.3% EMPLOYERS WORKERS 3 to 9 6.4% 10 to 24 4.3% 25 to 49 4.3% 5000+ 39.9% 50 to 199 9.5% 200 to 999 18.5% 1000 to 4999 17.0% COVERED WORKERS 5000+ 1000 to 4999 200 to 999 50 to 199 25 to 49 10 to 24 3 to 9 source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. 9 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T $12,890 3,458 Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Cost of Health 8.7% Insurance section 2 1,850 11 Employer Health Benefits 1 9 9 9 A n n u a l S u r v e y COST OF HEALTH INSURANCE section two Fe w h e a lt h c a r e e x p e r t s f o r e s aw t h e u n p r e c e d e n t e d d e c l i n e i n h e a lt h c a r e infl ation that occurred in the 1990s. In 1992, the Congressional Budget O f f i c e p r e d i c t e d t h at h e a lt h c a r e s p e n d i n g w o u l d c o n s t i t u t e 1 8 . 0 % o f g r o s s 2 domestic product by 2000. 1 I n s t e a d , 1 9 9 7 h e a lt h c a r e s p e n d i n g w a s o n ly 1 3 . 5 % Cost of Health Insurance o f G D P. A n n u a l i n c r e a s e s i n t h e c o s t o f e m p l o y e r - p r o v i d e d h e a lt h i n s u r a n c e f e l l f r o m a h i g h o f 1 8 % i n 1 9 8 9 to lo w o f 0 . 8 % i n 1 9 9 6 . D e c l i n i n g h e a lt h c a r e i n f l at i o n co n t r i b u t e d to i n c r e a s e s i n t h e ta k e - h o m e pay o f wo r k e r s a n d t h e profits of American businesses, and also helped to moderate the decline in t h e p e r c e n ta g e o f A m e r i c a n s w i t h e m ploye r - b a s e d h e a lt h c ov e r a g e . H o w e v e r , b y e a r ly 1 9 9 7 , m a n y a n a ly s t s d e c l a r e d t h e g o o d t i m e s o v e r a n d p r e d i c t e d a r e t u r n to n e a r d o u b l e - d i g i t h e a lt h c a r e i n f l at i o n . Th e r e w e r e c o m p e l l i n g r e a - sons why h e a lt h care inflation was l i k e ly to return. Managed care had already captured the “low-hanging fruit” of savings in the fee-for-service s ys t e m , h e a lt h pl a n s n e e d e d to r e c o u p t h e i r g r o w i n g f i n a n c i a l lo s s e s , a n d e x p l o d i n g t e c h n o l o g y ( i n c l u d i n g p r e s c r i p t i o n d r u g s ) w o u l d d r i v e u p u n d e r ly - i n g h e a lt h c a r e c o s t s . I n 1 9 9 9 , h e a lt h c a r e i n f l at i o n c o n t i n u e s to r i s e — though not as q u i c k ly as some had expected — and h e a lt h benefits cost increases are hitting the smallest businesses the hardest. PREMIUM INCREA SES analysts. Premium increases • Covered workers in all small outpaced increases in work- firms (3-199 workers) experi- • For the average covered ers earnings (3.8%) and the enced increases in premiums worker, health insurance medical care component of nearly 3 percentage points premiums increased 4.8% the consumer price index higher than those of all large from the Spring of 1998 to (3.4%) (Exhibit 2.2). firms (200 or more workers) the Spring of 1999 (a statisti- cally significant increase), (Exhibit 2.3). Employees in • The 4.8% premium increase firms with fewer than 200 nearly 3 percentage points amount is consistent with workers had average increas- greater than the increase in the U.S. Bureau of Labor es of 6.9% (significantly dif- the overall rate of inflation Statistics’ Employer Cost ferent from all firms), com- (Exhibit 2.1). This was the Index that shows an pared with 4.1% for firms highest nominal and infla- increase of 4.0% in health with 200 or more workers. tion-adjusted increase since benefits costs to the The smallest firms (3-9 work- 1994, but less than the infla- nation’s employers during ers) experienced average pre- tion rate forecast by many the past year.2 mium increases of 9.2%. 12 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n u a l S u r v e y • Higher rates of premium insured than in fully- lowest in the South (4.3%) inflation for small employers insured HMO and POS (Exhibit 2.7). Areas like Cali- section two reflect their heavy reliance plans, comparable for PPO fornia with the most intense on fully insured plans and and conventional plans, price competition in the mid- their inferior bargaining and increases across plan 1990s tended to have suffered position with insurers and types were close to zero. Pre- the greatest increases in premi- managed care organiza- mium increases for insured ums in 1999, as insurers tions. In addition, insurers plans in 1999 may be driven attempted to recover from and managed care organiza- in large part by losses expe- financial losses brought about tions charge a risk-premium rienced by health plans over by under-pricing their products. 2 to small firms to compensate the last several years — in Cost of Health Insurance for the greater risk associated 1996 and 1997, nearly two- with insuring a small group thirds of managed care M O N T H LY P R E M I U M of individuals. organizations and insurers COST OF SINGLE AND suffered financial losses.3 F A M I LY C O V E R A G E • Employers that self-funded • The average monthly cost of their health plans enjoyed • By plan type, HMOs and con- coverage, including both the substantially lower premium ventional plans had the high- employer and employee con- increases (Exhibit 2.4) than est rate of increase with 5.7% tribution, is $189 for single firms who purchased their and 5.6% increases respective- coverage and $478 for family health insurance from an ly (Exhibit 2.1), although only coverage (Exhibit 2.9). insurer (fully-insured plans). the former was significantly The difference was greatest in different from the previous • HMO plans remain the least conventional plans, 9.2% for year. POS plans had the low- expensive plans with average the former versus 3.7% for the est rate of increase at 3.6%. monthly premiums of $169 latter, a statistically significant Over the past decade, premi- for single coverage and $445 difference. um increases from year-to- for family coverage. Conven- year for different types of plans tional and POS coverage • The lower premium increas- have generally moved in tan- tends to be most expensive es for self-insured plans may dem (Exhibit 2.5). (Exhibit 2.9). reflect the underlying rate of health care inflation, while • In general, whether a plan • For single coverage, monthly the driving force behind is fully insured or self- premium costs are greatest larger increases in fully- funded greatly determines for the smallest firms with insured plans may be what its premium increase. More 3-9 workers, averaging $201 is known as the “underwrit- than 80% of HMO mem- (Exhibit 2.10). Family cover- ing cycle.” The underwriting bers are enrolled in an age is most expensive for firms cycle is the historic pattern insured plan, whereas the with 1,000-4,999 workers at of profitability and pricing, majority of enrollees in $504. Such comparisons do where insurers during times conventional and PPO not control for differences of profitability compete for plans are enrolled in a in deductibles, co-payments, market share by under-pric- self-funded plan. Among coinsurance and covered ben- ing their products. Eventu- insured plans, HMOs had efits. As shown in Section 7, ally, most insurers experi- lower premium increases employees in the smallest ence financial losses, and than PPO and conventional firms sometimes face higher then try to restore their prof- plans (Exhibit 2.4). patient cost sharing than itability by raising premi- employees in larger firms and ums. In 1996, premium • Premium increases were are provided fewer covered increases were higher in self- highest in the West (5.8%) and benefits. NOTES: 1 Congressional Budget Office, Projections of 2 U.S. Bureau of Labor Statistics, Office of 3 InterStudy reported that in 1997, only about one- National Health Expenditures: October 1992, Compensation Levels and Trends, June 1999, third of HMOs reported a profit (The InterStudy Congress of the United States, October 1992, unpublished data (data is for the employer Competitive Edge, Part II: HMO Industry Report, Summary Table 2, p4. contribution). Vol. 8.2, October 1998). HCIA reported that 44% of HMOs were profitable in 1996 (The Guide to the Managed Care Industry, HCIA, 1997). 13 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y exhibit 2.1 Percentage Change in Health Insurance Premiums from section two Previous Year, by Plan Type, 1988-1999 25% 20.3 20% 2 15% 12^ 12.4 Cost of Health Insurance 10% 8.5 9.1 8.4 7.7 7.2 5.6 5.7* 5.2 4.8* 4.3* 4.3* 4.3 5% 3.7* 3.2* 3.0* 3.6 1.9 0.8 1.0 ^ 1.1 -0.2 0% -5% ALL PLAN TYPES CONVENTIONAL HMO PPO POS source: 1999 Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999; 1998 KPMG Survey of Employer-Sponsored Health Benefits: 1988, 1993, 1996, 1998. 1996 1993 * Estimate is statistically different from the previous year for years 1996-1998, 1998-1999. 1988 ^ Information was not obtained for POS plans in 1988. exhibit 2.2 Increases in Health Insurance Premiums Compared to Other Indicators, 1988-1999 12 12% 10% 8.5 8% 6.9 6.3 6% 4.8* 4.6 4.4 3.7* 3.8 4% 3.0 3.4 3.5 3.2 3.2 2.7 2.9 2.3 2.5 2.1 2% 0.8 0% HEALTH INSURANCE PREMIUMS MEDICAL INFLATION WORKERS EARNINGS OVERALL INFLATION source: 1999 Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999; 1998 KPMG Survey of Employer-Sponsored Health Benefits: 1988, 1993, 1996, 1998. 1996 1993 * Estimate is statistically different from the previous year for years 1996-1998, 1998-1999. 1988 14 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 2.3 Percentage Change in Premiums, by Plan Type and Firm Size, 1999 section two Conventional HMO PPO POS All Plan Types FIRM SIZE Small (3-9 Workers) NSD NSD 11.7% NSD 9.2% 2 Small (10-24 Workers) NSD NSD 6.8 5.05 6.9% Cost of Health Insurance Small (25-49 Workers) NSD NSD 9.0 4.9 6.5 Small (50-199 Workers) 10.2 3.5 5.1 5.3 5.5 ALL SMALL FIRMS (3-199 WORKERS) 9.6%* 6.3% 7.7%* 5.2% 6.9%* Midsize (200-999 Workers) 5.8% 3.9% 4.6% 6.9% 4.7% Large (1,000-4,999 Workers) 5.3 7.5^ 1.1 2.0 3.1 Jumbo (5,000+ Workers) 2.7 5.8^ 3.1 2.6 4.2 ALL LARGE FIRMS (200 OR MORE WORKERS) 3.9% 5.6% 3.1% 3.0% 4.1% ALL FIRM SIZES 5.6% 5.7% 4.3% 3.6% 4.8% source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. NSD: Not sufficient data. * Firm size estimate is statistically different from All Firms within a plan type. ^ Plan type estimate is statistically different from All Plans within a firm size. 15 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y section two Exhibit 2.4 Premium Increases by Plan Type and Funding Arrangement, 1999 2 Cost of Health Insurance 10% 9.2 8% 6.8 5.9 5.8 6% 5.1 4.6 4% 3.7 3.7 3.1 2.5 2% 0% CONVENTIONAL* HMO PPO* POS ALL PLAN TYPES SELF-INSURED FULLY INSURED source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. * Estimates are statistically different within plan type. 16 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y section two Exhibit 2.5 Premium Increases for Covered Workers, by Plan Type, 1988-1999 2 Cost of Health Insurance 25% 20% 15% 10% 5% 0% -5% 1988 1993 1996 1998 1999 PPO HMO CONVENTIONAL source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999; KPMG Survey of Employer-Sponsored Health Benefits: 1988, 1993, 1996, 1998. 17 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y exhibit 2.6 Premium Increases from Previous Year, by Firm Size, section two 1996, 1998, and 1999 8% 6.9* 7% 2 6% 5.2* 5% 4.7 Cost of Health Insurance 4.4* 4.2* 4% 3.5* 3.1 3% 2.6* 2.1 2% 1.1 1% 0.5 0.3 0% ALL SMALL MIDSIZE LARGE JUMBO (3-199 WORKERS) (200-999 WORKERS) (1,000-4,999 WORKERS) (5,000+ WORKERS) source: 1999 1998 Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999; 1996 KPMG Survey of Employer-Sponsored Health Benefits: 1996, 1998. * Estimate is statistically different from the previous year for years 1996-1998, 1998-1999. exhibit 2.7 Premium Increases from Previous Year, by Region, 1996, 1998, and 1999 6% 5.8 4.9 5% 4.6 4.3 4.3* 4.0* 4.0* 4% 2.9* 3% 2% 1.5 1.0 1% 0.6 0.0 0% NORTHEAST MIDWEST SOUTH WEST source: 1999 1998 Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999; 1996 KPMG Survey of Employer-Sponsored Health Benefits: 1996, 1998. * Estimate is statistically different from the previous year for years 1996-1998, 1998-1999. 18 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 2.8 section two Premium Increases from Previous Year, by Industry, 1996, 1998, and 1999 8% 7.2* 7% 6.3* 6% 5.7* 5.3 2 4.9* 5.0 4.8 5% Cost of Health Insurance 4.6 4.3* 4.4 3.9* 4% 3.6* 3.3 3.1* 3% 2.5* 2.6 2.0 2.0* 2.0 2% 1.4 1.1 1.1 1% 0.7 0.6 0.3 0.4 0.5 0% MINING/ MANUFACT- TRANSPORTATION/ RETAIL FINANCE SERVICE STATE/ LOCAL HEALTH CARE HIGH TECH CONSTRUCTION/ URING COMMUNICATION/ GOVERNMENT WHOLESALE UTILITY 1999 1998 1996 source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999; KPMG Survey of Employer-Sponsored Health Benefits: 1996, 1998. * Estimate is statistically different from the previous year for years 1996-1998, 1998-1999. 19 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 2.9 Monthly and Annual Premiums for Workers in Conventional, HMO, PPO, and POS Plans, by Region, 1999 section two Monthly Annual Single Family Single Family Coverage Coverage Coverage Coverage CO N V E N T I O N A L P L A N S 2 Northeast $197 $500 $2,365 $6,004 Cost of Health Insurance Midwest 212 519 2,547 6,234 South 185 468 2,222 5,612 West 250* 478 2,995* 5,733 A L L R EG I O N S 202 491 2,420 5,891 HMO PLANS Northeast $170 $486 $2,036 $5,831 Midwest 157 445 1,881 5,345 South 153 457 1,831 5,480 West 201 397* 2,413 4,762* A L L R EG I O N S 169 445 2,025 5,342 PPO PLANS Northeast $213 $567* $2,550 $6,799* Midwest 182 468 2,186 5,619 South 183 476 2,200 5,711 West 247 496 2,967 5,951 A L L R EG I O N S 195 488 2,345 5,862 POS PLANS Northeast $206 $562* $2,474 $6,742* Midwest 170* 452* 2,040* 5,421* South 183 493 2,198 5,917 West 237 412 2,839 4,944 A L L R EG I O N S 198 496 2,373 5,951 ALL PLAN TYPES Northeast $197 $537* $2,368 $6,441* Midwest 176 465 2,117 5,574 South 176 474 2,113 5,694 West 226 435 2,714 5,217 A L L R EG I O N S 189 478 2,270 5,742 source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. * Region estimate is statistically different from All Regions within a plan type. 20 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 2.10 Monthly and Annual Premiums for Workers in Conventional, HMO, PPO, and POS Plans, by Firm Size, 1999 section two Monthly Annual Single Family Single Family Cover a ge Cover a ge Cover a ge Cover a ge CO N V E N T I O N A L P L A N S Small (3-9 Workers) NSD NSD NSD NSD Small (10-24 Workers) NSD NSD NSD NSD Small (25-49 Workers) NSD NSD NSD NSD 2 Small (50-199 Workers) 185 472 2,218 5664 Cost of Health Insurance ALL SMALL FIRMS (3-199 W ORKERS) 210 457 2,516 5,486 Midsize (200-999 Workers) 230 573* 2,759 6,878* Large (1,000-4,999 Workers) 192 491 2,299 5,892 Jumbo (5,000+ Workers) 189 488 2,269 5,853 ALL FIRM SIZES 202 491 2,420 5,891 HMO PLANS Small (3-9 Workers) NSD NSD NSD NSD Small (10-24 Workers) NSD NSD NSD NSD Small (25-49 Workers) NSD NSD NSD NSD Small (50-199 Workers) 157 441 1,878 5,287 ALL SMALL FIRMS (3-199 W ORKERS) 151 411 1,807 4,931 Midsize (200-999 Workers) 150 422 1,796 5,062 Large (1,000-4,999 Workers) 173 472 2,078 5,663 Jumbo (5,000+ Workers) 181 459 2,178 5,502 ALL FIRM SIZES 169 445 2,025 5,342 PPO PLANS Small (3-9 Workers) $185 $494 $2,222 $5,932 Small (10-24 Workers) 212 533 2,539 6,401 Small (25-49 Workers) 186 458 2,238 5,498 Small (50-199 Workers) 206 498 2,468 5,981 ALL SMALL FIRMS (3-199 W ORKERS) 198 495 2,375 5,943 Midsize (200-999 Workers) 198 516 2,381 6,187 Large (1,000-4,999 Workers) 180 506 2,164 6,078 Jumbo (5,000+ Workers) 201 449 2,407 5,392 ALL FIRM SIZES 195 488 2,345 5,862 POS PLANS Small (3-9 Workers) NSD NSD NSD NSD Small (10-24 Workers) 173* 400* 2,071* 4,797* Small (25-49 Workers) 192 499 2,304 5,984 Small (50-199 Workers) 172* 466 2,061* 5,597 ALL SMALL FIRMS (3-199 W ORKERS) 193 469 2,311 5,626 Midsize (200-999 Workers) 176* 468 2,116* 5,618 Large (1,000-4,999 Workers) 187 534 2,241 6,407 Jumbo (5,000+ Workers) 209 505 2,513 6,060 ALL FIRM SIZES 198 496 2,373 5,951 ALL PLAN TYPES Small (3-9 Workers) $201 $467 $2,411 $5,602 Small (10-24 Workers) 179 455 2,146 5,459 Small (25-49 Workers) 189 462 2,264 5,544 Small (50-199 Workers) 185 476 2,215 5,706 ALL SMALL FIRMS (3-199 W ORKERS) 189 467 2,263 5,607 Midsize (200-999 Workers) 183 486 2,201 5,831 Large (1,000-4,999 Workers) 181 504 2,173 6,044 Jumbo (5,000+ Workers) 196 471 2,347 5,655 ALL FIRM SIZES 189 478 2,270 5,742 source: NSD: Not sufficient data. Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. * Firm size estimate is statistically different from All Firms within a plan type. 21 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 2.11 Monthly and Annual Premiums for Workers in Conventional, HMO, PPO, and POS Plans, by Industry, 1999 section two Monthly Annual Single Family Single Family Cover a ge Cover a ge Cover a ge Cover a ge CO N V E N T I O N A L P L A N S Mining/Construction/Wholesale $176 $489 $2,107 $5,872 Manufacturing 210 504 2,515 6,045 2 Transportation/Communication/Utility 201 545 2,413 6,546 Retail NSD NSD NSD NSD Cost of Health Insurance Finance 241* 535 2,892* 6,425 Service 214 513 2,572 6,162 State/Local Government 160* 395* 1,919* 4,746* Health Care 233* 505 2,796* 6,065 High Tech 165* 472 1,984* 5,670 A L L I N D U ST R I E S 202 491 2,420 5,891 HMO PLANS Mining/Construction/Wholesale $152 $391* $1,820 $4,688* Manufacturing 162 444 1,946 5,327 Transportation/Communication/Utility 145 430 1,742 5,161 Retail 156 450 1,871 5,401 Finance 169 491 2,027 5,889 Service 177 440 2,124 5,275 State/Local Government 170 449 2,043 5,388 Health Care 174 470 2,084 5,644 High Tech 157 424 1,883 5,084 A L L I N D U ST R I E S 169 445 2,025 5,342 PPO PLANS Mining/Construction/Wholesale $180 $537 $2,159 $6,439 Manufacturing 179 473 2,145 5,680 Transportation/Communication/Utility 184 487 2,211 5,842 Retail 179 509 2,148 6,108 Finance 202 541 2,427 6,488 Service 222 488 2,667 5,859 State/Local Government 163* 414* 1,959* 4,965* Health Care 204 503 2,450 6,031 High Tech 188 512 2,253 6,144 A L L I N D U ST R I E S 195 488 2,345 5,862 POS PLANS Mining/Construction/Wholesale $203 $452* $2,431 $5,419* Manufacturing 192 530 2,307 6,354 Transportation/Communication/Utility 185 538 2,215 6,453 Retail 181 525 2,176 6,295 Finance 197 571* 2,369 6,854* Service 216 450 2,589 5,399 State/Local Government 186 502 2,226 6,022 Health Care 196 490 2,350 5,884 High Tech 171* 515 2,052* 6,185 A L L I N D U ST R I E S 198 496 2,373 5,951 ALL PLAN TYPES Mining/Construction/Wholesale $181 $485 $2,173 $5,817 Manufacturing 181 482 2,170 5,788 Transportation/Communication/Utility 174 490 2,091 5,879 Retail 176 501 2,113 6,018 Finance 194 532* 2,327 6,382* Service 205 465 2,458 5,581 State/Local Government 167* 430* 2,005* 5,163* Health Care 197 492 2,365 5,899 High Tech 173* 494 2,076* 5,924 A L L I N D U ST R I E S 189 478 2,270 5,742 source: NSD: Not sufficient data. Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. * Industry estimate is statistically different from All Industries within a plan type. 22 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T 29% $4,329 Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Health Benefits 29.0 Offer Rates section 3 33,948 23 Employer Health Benefits 1 9 9 9 A n n u a l S u r v e y HEALTH BENEFITS OFFER RATES N e a r ly a l l b u s i n e s s e s w i t h 2 0 0 o r m o r e e m p l o y e e s o f f e r h e a lt h i n s u r a n c e . H o w e v e r , s m a l l e r b u s i n e s s e s h a v e a lw ay s b e e n m u c h l e s s l i k e ly t o p r o v i d e h e a lt h b e n e f i t s . Th e p r o p o r t i o n o f a l l s m a l l b u s i n e s s e s ( 3 - 1 9 9 w o r k e r s ) n o w o f f e r i n g h e a lt h c o v e r a g e i s 6 0 % , w h i c h h a s s e e n n o s tat i s t i c a l ly s i g n i f i c a n t section three c h a n g e s ov e r t h e pa s t t h r e e ye a r s , d e s p i t e lo w e r h e a lt h c a r e i n f l at i o n a n d the best economy since the 1960s (Exhibit 3.1). • Whether or not small busi- wage employees. 40% of • The most common reason nesses offer health benefits small low-wage firms reported by small firms as 3 varies with their size, offered health insurance in “very important” in their whether they have a large 1999 compared with 79% of decision not to offer health Health Benefits Offer Rates share of low-wage workers, small high-wage firms insurance is still that premi- and the type of industry. (where 10% or less of ums are too expensive — employees earn low wages) 68% of all small firms (3-199 • The chance that a small (Exhibit 3.2). workers) (Exhibit 3.4). business offers health bene- fits increases with firm size. • The lowest offer rates • The fact that the company Over 90% of firms with among all small firms (3- could not qualify for group 50-199 employees offer 199 workers) are found in rates was cited as very health coverage, compared the retail sector, at 34%, important in their decision with only 55% of the small- which is nearly half the by 43% of all small firms; est firms (3-9 workers) 60% offer rate for all small 40% considered the fact (Exhibit 3.1). firms. The highest rates are that their employees were in government and the covered elsewhere a very • All small firms (3-199 workers) health care industry – 84% important reason for not with many low-wage workers and 78%, respectively offering health benefits. (defined here as 35% or (Exhibit 3.3). more employees earning • Most small businesses less than $20,000 per year) (75%) that are not offering are much less likely to offer health benefits in 1999 health benefits than are have never offered health small firms with higher- insurance. 24 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 3.1 Percentage of Firms Offering Health Benefits, by Firm Size, 1996, 1998, and 1999* 100 99 99 100% 95 93 92 90 section three 86 84 78 80% 72 71 60 59 60% 55 54 3 53 Health Benefits Offer Rates 49 40% 20% 0% 3-9 WORKERS 10-24 WORKERS 25-49 WORKERS 50-199 WORKERS ALL SMALL FIRMS ALL LARGE FIRMS (3-199 WORKERS) (200+ WORKERS) 1999 1998 1996 source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999; KPMG Survey of Employer-Sponsored Health Benefits: 1996, 1998. * Tests found no statistically different estimates from the previous year for years 1996-1998, 1998-1999. 25 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 3.2 Percentage of All Small Firms (3-199 workers) in Which Workers Are Offered Health Insurance, by Percentage of Workforce that is Low Income, 1999 Yes No PERCENT OF WORKFORCE EARNING LESS THAN $20,000 PER YEAR section three 10% or less 79%* 21% More than 10% & less than 35% 73 27 35% or more 40* 60 3 Health Benefits Offer Rates source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. * Income estimate is statistically different from All Firms (All Firms data not shown). 26 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 3.3 Percentage of All Small Firms (3-199 workers) in Which Workers Are Offered Health Insurance, 1999 Yes No R EG I O N section three Northeast 62% 38% Midwest 56 44 South 59 41 West 63 37 I N D U ST RY 3 Health Benefits Offer Rates Mining/Construction/Wholesale 70% 30% Manufacturing 71 29 Transportation/Communication/Utility NSD NSD Retail 34* 66 Finance 60 40 Service 61 39 State/Local Government 84* 16 Health Care 78* 22 High Tech 76 24 A L L R EG I O N S A N D I N D U ST R I E S 60% 40% source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. NSD: Not sufficient data. * Industry estimate is statistically different from All Regions and All Industries. 27 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 3.4 Small Firms’ Reasons For Not Offering Health Insurance, 1999 Very Somewhat Not Too Not At All Don’t Important Important Important Important Know HIGH PREMIUMS All Small Firms (3-199 Workers) 68% 18% 3% 9% 2% section three HIGH TURNOVER All Small Firms (3-199 Workers) 31 18 11 38 2 EMPLOYEE S COVERED ELSEW HERE 3 All Small Firms (3-199 Workers) 40 33 8 16 3 Health Benefits Offer Rates A D M I N I ST R AT I V E H A S S L E All Small Firms (3-199 Workers) 23 22 26 26 3 OBTAIN GOOD EMPLOYEE S WITHOUT OFFERING A HEALTH PLAN All Small Firms (3-199 Workers) 24 42 15 15 3 CO M PA NY C A N ’ T Q U A L I F Y F O R G R O U P R AT E S All Small Firms (3-199 Workers) 43 15 10 28 3 F I R M TO O N E W LY E STA B L I S H ED All Small Firms (3-199 Workers) 9 14 8 67 2 source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. 28 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T 3.9 $5 ,097 Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Employee 2,901 Coverage, Eligibility, and Participation section 4 44.5% 29 Employer Health Benefits 1 9 9 9 A n n u a l S u r v e y EMPLOYEE COVERAGE, ELIGIBILITY, AND PARTICIPATION J u st ove r 6 0 % o f a l l e m ploye e s ( i n c lu d i n g b ot h f u l l - a n d pa rt - t i m e ) h ave h e a lt h i n s u r a n c e c ov e r a g e t h r o u g h t h e i r o w n e m ploye r ( E x h i b i t 4 . 1 ) . W h i l e other workers may have coverage through their spouse’s job, many do not h a v e t h at o p t i o n . E s t i m at e s f r o m C e n s u s B u r e a u d ata n o w i n d i c at e t h at n e a r ly 4 one in five workers is uninsured. Th e p r i m a r y r e a s o n w o r k e r s a r e u n i n s u r e d i s b e c a u s e h e a lt h b e n e f i t s a r e n ot o f f e r e d b y t h e i r e m p l o y e r . W h i l e v i r t u a l ly a l l l a r g e f i r m s ( 2 0 0 o r m o r e w o r k - e r s ) o f f e r h e a lt h b e n e f i t s , o n ly 6 0 % o f s m a l l f i r m s ( 3 - 1 9 9 w o r k e r s ) o f f e r e d h e a lt h i n s u r a n c e i n 1 9 9 9 ( E x h i b i t 3 . 1 ) . Th e i m pa c t o f t h i s d i f f e r e n c e i s s u b - section four s ta n t i a l g i v e n t h at n e a r ly 3 0 % o f a l l e m p l o y e e s ( e x c l u d i n g t h e s e l f - e m p l o y e d ) work in small firms (Exhibit 1.2). 4 • Not all employees are eligi- • Participation (the take-up • The percentage of workers ble for their firm’s health rate) in health benefits is insured in firms that offer Employee Coverage, Eligibility, and Participation benefits and not all who are high across all firm sizes, health benefits — referred to eligible choose to participate with take-up rates ranging as the coverage rate — has in them. Therefore, how from 81% to 89%. decreased in the past decade, many workers are covered is dropping from 73% in 1989 to a product of both the per- • Both eligibility and take-up 67% in 1996 (Exhibit 4.2). centage of workers who are rates vary considerably Coverage rates have stabi- actually eligible for the firm’s across industries. The pro- lized since then and are cur- health insurance and the per- portion of workers eligible rently at 66% — a surprising centage who choose to “take- for health benefits (among finding when a rebound up” (i.e., participate in) this firms that offer coverage) might have been expected benefit. Evidence from this ranges from 95% in govern- given the strong national and other surveys indicates ment to 56% in the retail economy. Coverage rates do both eligibility and take-up sector. The take-up rate for not differ substantially by rates have decreased in the health benefits is particu- firm size or across regions of past decade.5 (Exhibit 4.3). larly low among workers in the country, but do vary by retail — 72%. industry (Exhibit 4.3). • 80% of small firms’ (3-199 workers) employees and 78% of all large firms’ employees are eligible for health benefits. 30 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n u a l S u r v e y • Among firms that offer • Part of the reason workers in H E A LT H B E N E F I T S F O R health benefits, two-thirds low-wage firms have lower DEPENDENTS (66%) of workers in both take-up rates may be small (3-199 workers) and because they are required to • Almost all workers who are large (200 or more workers) pay a greater share of the offered health benefits by firms are covered through premium for family coverage their employer, regardless their own employer. — 40% of the premium, of firm size, region, or indus- compared with 27% paid by try, also have the option to • Regional variation in cover- workers in high-wage firms cover their family members, at age rates is slight, ranging (See Exhibit 7.24 in Section 99% (Exhibit 4.7). Recently, from 64% in the West to 7). Still, a large majority employers have also begun to 69% in the South. (75%) of workers in low- offer coverage to the nontradi- wage firms participate in tional partners of their work- • Coverage rates vary widely their company’s health ben- ers. In 1999, 18% of workers by industry: among employ- efits, compared with 87% of with health benefits available ees of firms that offer health workers in high-wage firms. to them were also offered cov- benefits, 40% of workers in erage for nontraditional part- retail businesses had health • Part-time workers often are not section four ners. coverage through their own eligible for health coverage. employer, while 75% of This is particularly true in all • The extension of health manufacturing workers and small firms (3-199 workers), benefits to nontraditional 90% of government workers where only 27% of workers are partners varies somewhat by were covered. offered coverage if they work geographic region and part-time, compared with 46% industry. Workers in the • Among firms that offer health of workers in all large firms Midwest are least likely 4 benefits, eligibility rates, take- (200 or more workers). Tem- (8%) to have this option. Employee Coverage, Eligibility, and Participation up rates — and, consequently, porary workers are rarely eligi- Workers in retail and gov- coverage rates — are lower in ble for health benefits in any ernment are least likely to be low-wage firms (Exhibit 4.6). size of firm (Exhibit 4.4). offered nontraditional part- ner coverage, while over half • 55% of employees in low- • Some new employees may of workers in high-tech busi- wage firms (where 35% or not have worked long enough nesses have this option. more of the workers earn less in a firm to qualify for than $20,000 per year) are health benefits. However, • Nontraditional coverage covered through their own waiting periods for health can include same sex cou- employer, compared with coverage are short, ranging ples or unmarried heterosex- 73% of workers in high-wage from less than one month in ual couples, although busi- firms (where 10% or less of jumbo firms (5,000 or more nesses do not always extend the workers earn less than workers) to 2.6 months in the coverage to both types of $20,000 per year). Higher smallest firms (3-9 workers) nontraditional partners coverage rates in high-wage (Exhibit 4.5). (Exhibit 4.8). firms that offer health bene- fits are a function of both higher eligibility rates and higher take-up rates. NOTES: 4 U.S. Census Bureau, “Health Insurance Coverage, 1998,” 5 P. Cooper and B. Schoene, “More Offers, Fewer Takers for Employment- Current Population Reports, October 1999. Based Health Insurance,” Health Affairs, (November/December, 1997) pp. 142-152; P. Ginsburg and J. Gabel, “Tracking Health Care Costs: Third Edition,” Health Affairs, September/October 1998, Vol. 17, No. 5, pp. 141- 146. T. Rice et al., “Trends in Job-Based Health Insurance Coverage,” Kaiser Family Foundation, June 1998. 31 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 4.1 Percentage of Workers Covered by Their Employer’s Health Benefits, in Firms Both Offering and Not Offering Health Benefits, 1996, 1998, 1999 C a t e gory 1996 1998 1999 FIRM SIZE Small (3-9 Workers) 36% 31% 42% Small (10-24 Workers) 52 43 53 Small (25-49 Workers) 66 55 56 section four Small (50-199 Workers) 64 63 60 Midsize (200-999 Workers) N/A N/A 66 Large (1,000-4,999 Workers) N/A N/A 63 Jumbo (5,000+ Workers) N/A N/A 68 4 A L L S MA L L F I R M S ( 3 - 1 9 9 W O R K E R S ) * 52% 47% 52% Employee Coverage, Eligibility, and Participation ALL LARGE FIRMS (200 OR MORE WORKERS) N/A N/A 66% ALL FIRMS N/A N/A 62% source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999; KPMG Surveys of Employer-Sponsored Health Benefits: 1996, 1998. N/A: Large firms not offering health benefits were not surveyed in 1996 and 1998. * Tests found no statistically significant changes from the previous year for years 1996-1998, 1998-1999. 32 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 4.2 Percentage of Workers in Firms Offering Health Benefits Who Are Covered by Their Employer’s Health Plan, by Firm Size, 1989-1999 80% 72 73 73 70% 68 67 67 66 66* 66* 66* 64 65 60% section four 50% 40% 30% 4 Employee Coverage, Eligibility, and Participation 20% 10% 0% ALL SMALL FIRMS (3-199 WORKERS) ALL LARGE FIRMS (200+ WORKERS) ALL FIRM SIZES 1999 1998 1996 1989 source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999; KPMG Survey of Employer-Sponsored Health Benefits: 1989, 1996, 1998. * Estimate is statistically different from the 1989 estimate; no statistical differences in estimates from the previous year for years 1996-1998, 1998-1999. 33 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 4.3 Eligibility, Take-up Rates^, and Coverage, 1999 Percentage of Take-up Rate^ Percentage of Worker s Eligible Worker s Covered for Health by Health Insurance Insurance FIRM SIZE Small (3-9 Workers) 82% 86% 69% Small (10-24 Workers) 85* 83 70 Small (25-49 Workers) 79 82 65 Small (50-199 Workers) 78 81 63 A L L S MA L L F I R M S ( 3 - 1 9 9 W O R K E R S ) 80 83 66 Midsize (200-999 Workers) 75 89* 66 section four Large (1,000-4,999 Workers) 76 81 63 Jumbo (5,000+ Workers) 80 84 68 ALL LARGE FIRMS (200 OR MORE WORKERS) 78 85 66 R EG I O N 4 Northeast 77% 83% 65% Employee Coverage, Eligibility, and Participation Midwest 76 84 65 South 80 86 69 West 78 81 64 I N D U ST RY Mining/Construction/Wholesale 80% 87% 70% Manufacturing 85 87 75 Transportation/Communication/Utility 82 93* 77 Retail 56* 72* 40* Finance 92* 84 77* Service 78 85 66 State/Local Government 95* 97* 90* Health Care 74 81 60 High Tech 90* 84 76* A L L F I R M S I Z E S , R EG I O N S , A N D I N D U ST R I E S 78% 84% 66% source: * Estimate is statistically different from All Firms. Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. ^ Take-up rate is the percentage of eligible workers who choose to participate in health benefits offered by their employer. 34 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 4.4 Percentages of Workers Employed In Firms That Offer Part-time and Temporary Workers Health Coverage, 1999 Part-time Temporary FIRM SIZE Small (3-9 Workers) 18%* 6% Small (10-24 Workers) 19* 2 Small (25-49 Workers) 33 3 Small (50-199 Workers) 34 5 A L L S MA L L F I R M S ( 3 - 1 9 9 W O R K E R S ) 27* 4 Midsize (200-999 Workers) 25* 2* Large (1,000-4,999 Workers) 41 4 section four Jumbo (5,000+ Workers) 58 4 ALL LARGE FIRMS (200 OR MORE WORKERS) 46 3 R EG I O N Northeast 47% 2% Midwest 48 3 4 Employee Coverage, Eligibility, and Participation South 37 4 West 34 4 I N D U ST RY Mining/Construction/Wholesale 22%* 3% Manufacturing 40 2 Transportation/Communication/Utility 58 7 Retail 24 5 Finance 59* 1* Service 36 3 State/Local Government 70* 2 Health Care 69* 5 High Tech 48 2 A L L F I R M S I Z E S , R EG I O N S , A N D I N D U ST R I E S 41% 3% source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. * Estimate is statistically different from All Firms. 35 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 4.5 Average Waiting Period for Health Coverage, 1999 Average Wait for Health Coverage (Months) FIRM SIZE Small (3-9 Workers) 2.6* Small (10-24 Workers) 2.1* Small (25-49 Workers) 2.2* Small (50-199 Workers) 2.0* A L L S MA L L F I R M S ( 3 - 1 9 9 W O R K E R S ) 2.2* Midsize (200-999 Workers) 2.1 Large (1,000-4,999 Workers) 1.5 section four Jumbo (5,000+ Workers) 0.8* R EG I O N Northeast 1.3 Midwest 1.3 4 South 1.8 West 1.4 Employee Coverage, Eligibility, and Participation I N D U ST RY Mining/Construction/Wholesale 1.9* Manufacturing 1.4 Transportation/Communication/Utility 1.5 Retail 3.1* Finance 0.9* Service 1.2 State/Local Government 1.1 Health Care 2.0* High Tech 1.7 A L L F I R M S I Z E S , R EG I O N S , A N D I N D U ST R I E S 1.5 source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. * Estimate is statistically different from All Firms. 36 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 4.6 Percentage of Workers Covered by Health Benefits, Take-up Rates, and Eligibility for Health Benefits, by Percentage of Workforce that is Low Income, 1999 Percentage of Worker s Take-up Rate Percentage of Worker s Covered by Health Eligible for Health Insurance Insurance PERCENT OF WORKFORCE EARNING LESS THAN $20,000 PER YEAR 10% or less 73%* 87%* 83%* More than 10% & less than 35% 62 86 72 35% or more 55 75* 72 section four 4 Employee Coverage, Eligibility, and Participation source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. * Income estimate is statistically different from All Firms (All Firms data not shown). 37 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 4.7 Percentage of Workers Employed in Firms That Offer Dependents and Nontraditional Partners^ Health Coverage, 1999 Dependents N ontraditional Partner s^ FIRM SIZE Small (3-9 Workers) 99% 14% Small (10-24 Workers) 96 19 Small (25-49 Workers) 97 15 Small (50-199 Workers) 98 17 A L L S MA L L F I R M S ( 3 - 1 9 9 W O R K E R S ) 98* 16 Midsize (200-999 Workers) 100 25 Large (1,000-4,999 Workers) 99 14 section four Jumbo (5,000+ Workers) 100 18 R EG I O N Northeast 99% 18% Midwest 99 8* South 100* 23 4 West 99 21 Employee Coverage, Eligibility, and Participation I N D U ST RY Mining/Construction/Wholesale 100%* 23% Manufacturing 99 17 Transportation/Communications/Utility 100 21 Retail 99 5* Finance 100 12 Service 99 23 State/Local Government 100* 7* Health Care 99 17 High Tech 100* 53* A L L F I R M S I Z E S , R EG I O N S , A N D I N D U ST R I E S 99% 18% source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. * Estimate is statistically different from All Firms. ^ Nontraditional partners is defined as unmarried heterosexual and same-sex couples who live together. 38 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 4.8 Percentage of Workers Employed in Firms That Offer Same Sex and Unmarried Heterosexual Couples Health Coverage, 1999 Same Sex Couples Unmarried Heterosexual Eligible Couples Eligible FIRM SIZE Small (3-9 Workers) 10% 12% Small (10-24 Workers) 9 10 Small (25-49 Workers) 6 12 Small (50-199 Workers) 8 13 A L L S MA L L F I R M S ( 3 - 1 9 9 W O R K E R S ) 9 12 Midsize (200-999 Workers) 4* 23 section four Large (1,000-4,999 Workers) 11 6 Jumbo (5,000+ Workers) 15 10 R EG I O N Northeast 15% 10% Midwest 5* 6 South 9 18 4 West 19 11 Employee Coverage, Eligibility, and Participation I N D U ST RY Mining/Construction/Wholesale 14% 19% Manufacturing 13 14 Transportation/Communication/Utility 16 4* Retail 2* 5 Finance 10 4* Service 11 17 State/Local Government 6 5 Health Care 9 13 High Tech 51* 9 A L L F I R M S I Z E S , R EG I O N S , A N D I N D U ST R I E S 11% 12% source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. * Estimate is statistically different from All Firms. 39 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T 73.6% 55.7 Employer Health Benefits 1 9 9 9 A n n ua l S u rve y $ 1,238,945 Health Insurance Choice section 5 45,876 41 Employer Health Benefits 1 9 9 9 A n n u a l S u r v e y HEALTH INSURANCE CHOICE As employer-based insurance changed from a fee-for-service to a managed care dominated system, employees found they could no longer select any p rov i d e r o f t h e i r c h o i c e . Th i s t r e n d h a s m a d e t h e i s s u e o f pl a n c h o i c e eve n more important. Studies show that people with more choice of pl ans report 6 g r e at e r s at i s fa c t i o n w i t h t h e h e a lt h pl a n t h e y a r e e n r o l l e d i n . Health Insurance Choice • The percentage of workers • The percentage of workers • Employees are more likely to with employer-based cover- with a choice of health plans have a choice among differ- age who can choose a con- has remained essentially sta- ent HMO plans than among ventional plan continues to ble since 1996, at 65% other types of plans (Exhibit decline — only 26% in 1999, (Exhibit 5.2). Since 1988, 5.5). Since 1996, there has down from 52% in 1996 employees with a choice of been little change in the per- (Exhibit 5.1). The number of health plans have increased centage of employees offered workers with an HMO or from 53% to 65%, perhaps a more than one HMO, con- PPO option available both response to the shift into ventional, PPO, or POS plan increased slightly in the last managed care. (Exhibits 5.6-5.9). 5 year, while the percentage of workers with a POS option • Exhibits 5.3 and 5.4 highlight • Regional variations in the section five declined from 49% to 45%. the significant disparities that percentage of employees None of the changes from exist among employees of with a choice of plans high- 1998 to 1999 were statistically small and large firms in their light the more limited plan significant, however. Workers ability to choose among alter- choice available to workers are now more likely to be native health plans. The per- in the South. (Exhibit 5.10). able to choose a PPO than an centage of firms offering a 42% of employees in the HMO (62% versus 56%, choice of health plans ranges South are limited to one respectively), making PPOs from 10% for all small firms plan, compared with 28% the dominant player in terms (3-199 employees) to 54% for in the Northeast, 30% in of employer offerings and midsize companies (200-999 the West, and 35% in the market share as well. employees) and 88% for Midwest. jumbo employers (5,000 or more employees). 42 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n u a l S u r v e y • Why do firms offer only one EMPLOYER plan? Among firms offering CONTRIBUTION POLICIE S only one health plan, the rea- • When employers offer choice, sons for doing so vary by firm they continue to subsidize size (Exhibit 5.11). “Too employees who select higher expensive to offer more choic- cost plans (Exhibit 5.12). es” was cited as a major reason Only 28% of employees work more frequently by smaller for a firm where the employer firms – 55% of firms with 10-24 contributes the same dollar workers, compared with 23% amount to each health plan, of firms with 5,000 or more which would give employees workers. In contrast, larger the maximum financial firms were more likely than incentive to choose lower cost small businesses to cite “the Health Insurance Choice plans; 29% of workers work for administrative burden is too a firm that contributes the great” – 60% of both large and same percentage to all health jumbo firms, in contrast with plans; and 12% of workers con- only 28% of the smallest firms tribute the same dollar (3-9 workers). The percentage amount, regardless of the plan of firms citing “few plans they choose (Exhibit 5.13). available locally” as a major reason was modest (11%), • Among firms contributing the which is perhaps surprising in same dollar amount, about light of the health plan con- one-fifth set the contribution 5 solidation that has been level at the cost of the lowest section five occurring in markets across priced plan (Exhibit 5.14). the country. NOTES: 6 Gawande et al., “Does Dissatisfaction with Health Plans Stem From Having No Choice?,” Health Affairs, September/October 1998, pp. 184-194. 43 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 5.1 Percentage of Covered Workers with a Choice of Conventional, HMO, PPO, or POS Plans, 1988-1999 100% 90 80% 68 Health Insurance Choice 64 62 59 60% 56 57* 54* 52 49 49* 46 45 45 40% 32* 30 26 5 21 20% 18 section five ^ 0% CONVENTIONAL HMO PPO POS 1999 1998 1996 1993 1988 source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999; KPMG Survey of Employer-Sponsored Health Benefits: 1988, 1993, 1996, 1998. * Estimate is statistically different from the previous year for years 1996-1998, 1998-1999. ^ Information was not obtained for POS plans in 1988. 44 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y exhibit 5.2 Percentage of Covered Workers With a Choice of Health Plans, 1988-1999* 100% 80% 36 51 51 50 60% 17 16 15 15 40% 47 20% 33 34 35 Health Insurance Choice 0% 1988 1996 1998 1999 source: THREE OR MORE PLANS TWO PLANS Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999; ONE PLAN KPMG Survey of Employer-Sponsored Health Benefits: 1988, 1996, 1998. * Tests found no statistically different distributions from the previous year for years 1996-1998, 1998-1999. 5 section five exhibit 5.3 Percentage of Employers Providing a Choice of Health Plans, by Firm Size, 1999 3 4 100% 7 7 80% 35 34 60% 75 19 90 42 89 40% 46 20% 13 24 12 0% ALL SMALL MIDSIZE* LARGE* JUMBO* ALL FIRM SIZES (3-199 WORKERS) (200-999 WORKERS) (1000-4999 WORKERS) (5000+ WORKERS) source: THREE OR MORE PLANS TWO PLANS Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. ONE PLAN * Distribution is statistically different from All Firm Sizes. 45 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 5.4 Percentage of Covered Workers with a Choice of Health Plans, by Firm Size, 1988-1999 1 Plan Only 2 Plans 3 or More Plans 1988 Small (3-9 Workers) 92% 5% 3% Small (10-24 Workers) 85 7 9 Small (25-49 Workers) 58 24 19 Small (50-199 Workers) 62 22 16 A L L S MA L L F I R M S ( 3 - 1 9 9 W O R K E R S ) 66 19 15 Midsize (200-999 Workers) 39 22 40 Large (1,000-4,999 Workers) 29 17 54 Jumbo (5,000+ Workers) 18 5 77 ALL FIRM SIZES 47 17 36 Health Insurance Choice 1996 Small (3-9 Workers)* 91% 2% 7% Small (10-24 Workers)* 85 12 3 Small (25-49 Workers)* 83 14 3 Small (50-199 Workers)* 68 24 8 A L L S MA L L F I R M S ( 3 - 1 9 9 W O R K E R S ) * 80 14 6 Midsize (200-999 Workers)* 47 25 28 Large (1,000-4,999 Workers)* 22 23 55 Jumbo (5,000+ Workers)* 9 10 81 5 ALL FIRM SIZES 33 16 51 section five 1998 Small (3-9 Workers)* 94% 3% 3% Small (10-24 Workers)* 93 5 2 Small (25-49 Workers)* 81 13 6 Small (50-199 Workers)* 68 22 10 A L L S MA L L F I R M S ( 3 - 1 9 9 W O R K E R S ) * 80 14 6 Midsize (200-999 Workers)* 45 24 31 Large (1,000-4,999 Workers)* 21 22 57 Jumbo (5,000+ Workers)* 7 9 84 ALL FIRM SIZES 34 15 51 1999 Small (3-9 Workers)* 92% 5% 4% Small (10-24 Workers)* 95 2 3 Small (25-49 Workers)* 86 11 3 Small (50-199 Workers)* 66 21 13 A L L S MA L L F I R M S ( 3 - 1 9 9 W O R K E R S ) * 81 12 7 Midsize (200-999 Workers)* 43 17 40 Large (1,000-4,999 Workers)* 29 30 42 Jumbo (5,000+ Workers)* 7 9 84 ALL FIRM SIZES 35 15 50 source: * Firm size distribution is statistically different from All Firm Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999; Sizes within given year. No significance tests were run for KPMG Survey of Employer-Sponsored Health Benefits: 1988, 1996, 1998. 1988. 46 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 5.5 Of Firms Offering a Conventional, HMO, PPO, or POS Plan, Percentage of Covered Workers With a Choice of Health Plans, by Firm Size, 1999 1 Plan Only 2 Plans 3 or More Plans CO N V E N T I O N A L P L A N S Small (3-9 Workers) NSD NSD NSD Small (10-24 Workers) NSD NSD NSD Small (25-49 Workers) NSD NSD NSD Small (50-199 Workers) * 97 3 0 A L L S MA L L F I R M S ( 3 - 1 9 9 W O R K E R S ) * 89 5 5 Midsize (200-999 Workers) * 90 9 2 Large (1,000-4,999 Workers) 67 19 14 Jumbo (5,000+ Workers) * 57 20 23 ALL FIRM SIZES 73 14 13 Health Insurance Choice HMO PLANS Small (3-9 Workers) NSD NSD NSD Small (10-24 Workers) NSD NSD NSD Small (25-49 Workers) NSD NSD NSD Small (50-199 Workers) * 64 30 6 A L L S MA L L F I R M S ( 3 - 1 9 9 W O R K E R S ) * 85 12 2 Midsize (200-999 Workers) 42 10 48 Large (1,000-4,999 Workers) * 24 18 58 Jumbo (5,000+ Workers) * 20 7 74 ALL FIRM SIZES 36 10 54 5 section five PPO PLANS Small (3-9 Workers) * 100% 0% 0% Small (10-24 Workers) * 95 0 5 Small (25-49 Workers) * 100 0 0 Small (50-199 Workers) * 90 9 1 A L L S MA L L F I R M S ( 3 - 1 9 9 W O R K E R S ) * 95 4 1 Midsize (200-999 Workers) * 82 4 14 Large (1,000-4,999 Workers) 79 15 6 Jumbo (5,000+ Workers) * 69 22 9 ALL FIRM SIZES 81 11 8 POS PLANS Small (3-9 Workers) NSD NSD NSD Small (10-24 Workers) * 96 2 3 Small (25-49 Workers) * 99 0 1 Small (50-199 Workers) * 86 14 0 A L L S MA L L F I R M S ( 3 - 1 9 9 W O R K E R S ) * 92 8 1 Midsize (200-999 Workers) * 68 28 5 Large (1,000-4,999 Workers) * 84 9 7 Jumbo (5,000+ Workers) * 63 5 32 ALL FIRM SIZES 75 8 16 source: NSD: Not sufficient data. Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. * Firm size distribution is statistically different from All Firm Sizes within plan type. 47 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y exhibit 5.6 Of Firms Offering a Conventional Plan, Percentage of Covered Workers With a Choice of Health Plans, by Number of Plans Offered, 1996, 1998, and 1999* 80% 77 72 73 70% 60% 50% 40% 30% 18 20% 14 14 13 9 10 10% Health Insurance Choice 0% 1 PLAN 2 PLANS 3 OR MORE PLANS source: 1999 1998 Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999; 1996 KPMG Survey of Employer-Sponsored Health Benefits: 1996, 1998. * Tests found no statistically different estimates from the previous year for years 1996-1998, 1998-1999. 5 section five exhibit 5.7 Of Firms Offering an HMO Plan, Percentage of Covered Workers With a Choice of Health Plans, by Number of Plans Offered, 1996, 1998, and 1999 80% 70% 68* 60% 54* 48 50% 40% 35 36* 30% 19* 17 20% 13 10 10% 0% 1 PLAN 2 PLANS 3 OR MORE PLANS source: 1999 1998 Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999; 1996 KPMG Survey of Employer-Sponsored Health Benefits: 1996, 1998. * Estimate is statistically different from the previous year for years 1996-1998, 1998-1999. 48 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y exhibit 5.8 Of Firms Offering a PPO Plan, Percentage of Covered Workers With a Choice of Health Plans, by Number of Plans Offered, 1996, 1998, and 1999 100% 81* 78 80% 70 60% 40% 20% 14 16 10 11 12 8* Health Insurance Choice 0% 1 PLAN 2 PLANS 3 OR MORE PLANS source: 1999 1998 Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999; KPMG 1996 Survey of Employer-Sponsored Health Benefits: 1996, 1998. * Estimate is statistically different from the previous year for years 1996-1998, 1998-1999. 5 section five exhibit 5.9 Of Firms Offering a POS Plan, Percentage of Covered Workers With a Choice of Health Plans, by Number of Plans Offered, 1996, 1998, and 1999 80% 75 75 70% 66 60% 50% 40% 30% 19* 20% 16 15 16 8 9 10% 0% 1 PLAN 2 PLANS 3 OR MORE PLANS source: 1999 1998 Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999; KPMG 1996 Survey of Employer-Sponsored Health Benefits: 1996, 1998. * Estimate is statistically different from the previous year for years 1996-1998, 1998-1999. 49 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 5.10 Percentage of Covered Workers with a Choice of Health Plans, by Region, 1999 MIDWEST NORTHEAST* ONE PLAN ONE PLAN Health Insurance Choice THREE OR 28% THREE OR 35% MORE PLANS MORE PLANS 51% 51% TWO PLANS TWO PLANS 21% 14% WEST* SOUTH* 5 section five ONE PLAN 30% THREE OR THREE OR MORE PLANS ONE PLAN MORE PLANS 44% 42% 58% TWO PLANS 12% TWO PLANS 14% source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. * Region distribution is statistically different from All Regions. 50 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 5.11 Reasons Firm Offers Only One Plan, by Firm Size, 1999 Major Reason Minor Reason Not a Reason Don’t Know TOO EXPENSIVE TO OFFER MORE CHOICES Small (3-9 Workers) 46% 18% 33% 3% Small (10-24 Workers) 55 9 32 4 Small (25-49 Workers)* 30 13 46 11 Small (50-199 Workers) 37 16 43 4 A L L S MA L L F I R M S ( 3 - 1 9 9 W O R K E R S ) 46 16 34 4 Midsize (200-999 Workers)* 30 12 53 5 Large (1,000-4,999 Workers) 46 14 38 3 Jumbo (5,000+ Workers) 23 19 49 9 ALL FIRM SIZES 46 16 35 4 Health Insurance Choice ADMINISTRATIVE BURDEN TOO GREAT Small (3-9 Workers) 28% 23% 47% 2% Small (10-24 Workers) 37 30 29 4 Small (25-49 Workers) 35 22 38 5 Small (50-199 Workers) 31 26 37 6 A L L S MA L L F I R M S ( 3 - 1 9 9 W O R K E R S ) 30 24 43 3 Midsize (200-999 Workers)* 21 27 48 4 Large (1,000-4,999 Workers)* 60 16 22 2 Jumbo (5,000+ Workers)* 60 22 15 3 ALL FIRM SIZES 30 24 43 3 5 PLAN RULES REQUIRE ALL section five E M P LOY E E S TO B E I N S A M E P L A N Small (3-9 Workers) 38% 16% 41% 5% Small (10-24 Workers)* 54 12 29 5 Small (25-49 Workers) 46 15 34 5 Small (50-199 Workers)* 34 24 37 5 A L L S MA L L F I R M S ( 3 - 1 9 9 W O R K E R S ) 41 15 39 5 Midsize (200-999 Workers) 46 12 38 4 Large (1,000-4,999 Workers)* 10 13 75 2 Jumbo (5,000+ Workers)* 12 23 62 3 ALL FIRM SIZES 41 15 39 5 F E W P L A N S AVA I L A B L E LO C A L LY Small (3-9 Workers) 11% 24% 62% 3% Small (10-24 Workers) 8 31 57 3 Small (25-49 Workers) 17 22 54 7 Small (50-199 Workers)* 14 12 69 5 A L L S MA L L F I R M S ( 3 - 1 9 9 W O R K E R S ) 12 24 61 6 Midsize (200-999 Workers)* 45 13 38 4 Large (1,000-4,999 Workers)* 15 10 73 2 Jumbo (5,000+ Workers) 19 7 71 3 ALL FIRM SIZES 12 24 61 4 source: * Firm size distribution is statistically different Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. from All Firm Sizes by reason. 51 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 5.12 Contribution Policies for Covered Workers Who Are Offered a Choice of Health Plans, by Firm Size, 1999 Small Midsize Large Jumbo All Firm (3-199 (200-999 (1 , 0 0 0 - 4 , 9 9 9 (5,000+ Sizes Worker s)* Worker s)* Worker s)* Worker s) E M P LOY E E S O F F E R ED O N E P L A N O N LY 81% 43% 29% 7% 35% Health Insurance Choice E M P LOY E E S O F F E R ED M O R E T H A N ONE PLAN Company contributes the same dollar amount regardless of plan chosen 38% 15% 12% 35% 28% Workers contribute the same dollar amount regardless of plan chosen 4 14 6 15 12 Company contributes same 5 percentage of total premium regardless of plan chosen 46 20 48 24 29 section five Company contribution varies based on other factors 11 51 33 26 30 Other 0 0 1 0 1 Don’t Know 1 0 0 1 0 TOTA L 100 % 100 % 100 % 100 % 100% source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. * Firm size distribution is statistically different from All Firm Sizes for employees offered more than one plan. 52 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 5.13 Contribution Policies For Covered Workers in Firms Offering a Choice of Health Plans, 1999 30 30% 29 28 25% Health Insurance Choice 20% 15% 12 10% 5 section five 5% 1 0% COMPANY CONTRIBUTES WORKERS CONTRIBUTE COMPANY CONTRIBUTES COMPANY CONTRIBUTION DON'T KNOW / OTHER SAME DOLLAR AMOUNT SAME DOLLAR AMOUNT SAME PERCENTAGE VARIES BASED ON OTHER FACTORS source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. 53 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 5.14 For Firms Contributing the Same Dollar Amount, Is Contribution Policy Set at the Cost of the Lowest Cost Plan Firm Offers, By Firm Size, 1999 100% 88 80 80% Health Insurance Choice 70 59 60% 51 48 40% 37 5 28 section five 19 20% 12 4 2 1 0 1 0% ALL SMALL* MIDSIZE LARGE* JUMBO ALL FIRM SIZES (3-199 WORKERS) (200-999 WORKERS) (1,000-4,999 WORKERS) (5,000+ WORKERS) DON’T KNOW NO YES source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. * Distribution is statistically different from All Firm Sizes. 54 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A L T H R E S E A R C H A N D E D U C A T I O N A L T R U S T 10.6% $123,955 Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Market Shares of Health Plans 1,356 section 6 6,839 55 Employer Health Benefits 1 9 9 9 A n n u a l S u r v e y MARKET SHARES OF HEALTH PLANS I n r e s p o n s e t o h i g h h e a lt h c a r e i n f l at i o n , H M O e n r o l l m e n t g r e w r a p i d ly i n t h e l at e 1 9 8 0 s a n d t h e e a r ly - t o - m i d 1 9 9 0 s i n t h e e m p l o y e r - b a s e d h e a lt h c a r e m a r - ket. More recent years have seen declines in the share of employees enrolled in HMOs — coupled with commensurate increases in PPO and POS enrollment — while conventional pl an enrollment ha s continued to fall. Shifts in market s h a r e a p p e a r to f u n c t i o n i n l a r g e pa r t a s a n i n d i c ato r o f i n f l at i o n i n h e a lt h care premiums. A s i n f l at i o n i n h e a lt h c a r e p r e m i u m s r e t u r n e d t o a p pa r e n t ly tolerable levels, employers became more willing to offer less restrictive but t r a d i t i o n a l ly m o r e c o s t ly h e a lt h p l a n s s u c h a s P P O s . M o r e o v e r , t h e p u b l i c “backl ash” against HMOs documented in public opinion surveys and negative p u b l i c i t y a s s o c i at e d w i t h d e b at e ove r “pat i e n t s ’ r i g h t s ” l e g i s l at i o n m ay h ave hastened the decline in HMO enrollment. Market Shares of Health Plans • Conventional plans continue enrollments in less restrictive ally the only plan offered, so to lose market share, declin- managed care plans such as greater choice of provider ing from 14% in 1998 to only PPOs. Conventional enroll- may be more important than 9% of enrollment in 1999 ment is consistently low in larger firms where a wider (Exhibit 6.1). PPO enroll- across the regions, and POS variety of plans is generally ment increased from 35% to enrollment is considerably offered. 38%, while POS enrollment higher in the Northeast—the grew slightly from 24% to only region where POS • Employees of state and local 25%. HMO enrollment enrollment surpasses PPO governments are by far the 6 appears to have stabilized at enrollment. most likely to enroll in con- 28% of people in employer- ventional plans (16%, versus a section six sponsored plans. The bottom • Employees in different firm national average of 9%). line is that less-restrictive sizes follow somewhat differ- Workers in the mining/con- managed care plans continue ent enrollment patterns struction/wholesale indus- to dominate in the market- (Exhibit 6.2). Workers in tries are considerably less place, while enrollment in small firms (3-199 employ- likely to enroll in HMOs – conventional plans has ees) are somewhat less likely 16% versus 28% for all indus- become marginal. to be enrolled in HMOs tries, a significant difference. (19%). Employees in jumbo Only 10% of covered workers • Employees in the West con- firms (5,000+ employees) in state and local government tinue to experience the great- have the highest HMO mar- are enrolled in POS plans, est HMO enrollment, with ket share, at 34%. This phe- significantly different from enrollment in conventional nomenon likely reflects in the national average of 25%. plans virtually non-existent part the lack of choice in (Exhibit 6.2). The Midwest small firms – when a small and South have much larger firm offers a plan, it is gener- 56 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 6.1 Health Plan Enrollments for Covered Workers, 1988-1999 1988 1993 POS PPO 7% 11% HMO 16% PPO 26% CONVENTIONAL 46% CONVENTIONAL 73% 1996 HMO 21% POS 14% CONVENTIONAL 27% PPO 28% Market Shares of Health Plans 1998* HMO 1999* 31% POS POS 24% 25% PPO PPO CONVENTIONAL 38% CONVENTIONAL 35% 14% 9% HMO HMO 27% 28% 6 section six source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999; KPMG Survey of Employer-Sponsored Health Benefits: 1988, 1993, 1996, 1998. * Distribution is statistically different from the previous year for years 1996-1998, 1998-1999. 57 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 6.2 Health Plan Enrollments, by Firm Size, Region, and Industry, 1999 Type of Plan Conventional HMO PPO POS FIRM SIZE Small (3-9 Workers) 12% 21% 37% 30% Small (10-24 Workers) 7 23 40 30 Small (25-49 Workers) 6 16* 47 31 Small (50-199 Workers) 14 18* 41 28 A L L S MA L L F I R M S ( 3 - 1 9 9 W O R K E R S ) 11 19* 41 29 Midsize (200-999 Workers) 7 29 52 12* Large (1,000-4,999 Workers) 8 23 44 24 Jumbo (5,000+ Workers) 8 34 30 28 R EG I O N Northeast 11% 26% 25%* 38%* Market Shares of Health Plans Midwest 10 27 47 16* South 8 24 45 23 West 5 40* 31 24 I N D U ST RY Mining/Construction/Wholesale 12% 16%* 45% 27% Manufacturing 8 19 51 22 Transportation/Communication/Utility 6 29 35 31 Retail 6 24 32 38 Finance 11 34 26* 29 6 Service 7 34 37 22 State/Local Government 16 30 44 10* section six Health Care 9 25 39 28 High Tech 3* 21 31 45 A L L F I R M S I Z E S , R EG I O N S , A N D I N D U ST R I E S 9% 28% 38% 25% source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. * Estimate is statistically different from All Firm Sizes, Regions, and Industries. 58 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T .003% $98,309 Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Employee 103,491 Contributions for Premiums and Cost Sharing section 7 0.129 59 Employer Health Benefits 1 9 9 9 A n n u a l S u r v e y EMPLOYEE CONTRIBUTIONS FOR PREMIUMS AND COST SHARING O n e o f t h e ways i n w h i c h e m ploye r s r e s p o n d to t h e r i s i n g c o s t o f h e a lt h i n s u r a n c e i s to pa s s s o m e p o rt i o n o f t h e i n c r e a s e d co st s o n to e m ploye e s . I n c r e a s i n g w h at e m ploye e s c o n t r i b u t e to wa r d s t h e p r e m i u m f o r h e a lt h c ov e r - a g e m ay m a k e t h e m m o r e c o n s c i o u s o f c o s t s a n d m o r e l i k e ly t o s e l e c t l o w e r cost pl ans, though at the same time it may lead to fewer workers taking up c o v e r a g e . S i m i l a r ly, w h i l e i n c r e a s e d c o - pa y m e n t s a n d d e d u c t i b l e s m a y e n c o u r - age more prudent use of services, they may lead to less use of needed as well a s e l e c t i v e s e r v i c e s , pa r t i c u l a r ly a m o n g l o w - i n c o m e i n d i v i d u a l s . Fro m 1 9 8 8 to 1 9 9 5 , e m ploye r s i n c r e a s e d t h e a m o u n t t h at wo r k e r s pay fo r cov - erage and services. Since then, however, employee contributions have remained more stable. Employee Contributions for Premiums and Cost Sharing WORKER CONTRIBUTIONS • Workers in larger firms pay coverage has grown since F O R H E A LT H P R E M I U M S somewhat more for their sin- 1996, while for all large gle health benefits than do firms it has seen no change. • Average monthly worker employees in smaller firms. contributions for health • Regionally, firms in the West • For example, employees in pay by far the smallest per- insurance remained relative- jumbo firms (5,000 or more centages of the total premi- ly stable in 1999; changes workers) pay an average of um for their employees, 69% from 1998 were not statisti- 21% of the total premium for single coverage and 57% cally significant. The aver- for single coverage, com- for family coverage, com- age worker contributed $35 pared with an average of pared to 84% and 68%, for single coverage and $145 12% in small firms (3-199 respectively, in the U.S. as a for family coverage in 1999 workers). For family cover- whole (Exhibit 7.14). By (Exhibit 7.1), compared to age, employee contribu- industry, state and local gov- $32 and $140 in 1998. The tions are similar across firm ernments offer comparatively average percent worker con- sizes (Exhibit 7.7). generous single coverage — tribution was 16% for single paying 94% of the total pre- coverage and 32% for family • Similarly, workers in all mium across plan types, sig- 7 coverage, compared with small firms (3-199 workers) nificantly higher than the 19% and 32% in 1998. are more likely than 84% for all industries — section seven employees in all large firms although contributions for (200 or more workers) to family coverage are compara- pay nothing towards the ble to all industry averages cost of health insurance. (Exhibit 7.15). (Exhibits 7.10-7.13). The percentage of all small firms paying the full cost of 60 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n u a l S u r v e y • Workers in lower wage firms • Deductibles for in-network • HMO co-payments remain pay more on average for fami- PPO coverage increased relatively unchanged from ly coverage, although there is marginally from $186 in 1998 (Exhibit 7.17). A $10 no clear relationship between 1998 to $190 in 1999, while co-payment per visit contin- the wage level of the firm and out-of-network deductibles ued to be the most common, how much workers pay for sin- for PPO plans dropped followed by $5 per visit. The gle coverage. In firms where somewhat from $344 in 1998 percentage of employees with 35% or more of the workforce to $315 in 1999 (although no co-payment continued to earns less than $20,000 per the changes are within the decrease, down from 7% in year, workers pay an average survey’s margin of error) 1998 to only 4% in 1999. of 40% of the premium for (Exhibit 7.16). The trend in family coverage. For firms PPO deductibles has been • Employees in HMO plans where 10% or less of the work- fairly stable over the past that are a Staff/Group force earns $20,000 per year few years. POS in-network model are considerably or less, the average contribu- deductibles continued to more likely to have no co- tion is 27% of the monthly decrease slightly, dropping payment than employees in premium (Exhibit 7.24). from $43 in 1998 to $41 in IPA or mixed-model HMOs Employee Contributions for Premiums and Cost Sharing 1999. The trend in out-of- – 19% versus an overall aver- network deductibles contin- age of 4%, a statistically sig- COST SHARING ued in an upward direction, nificant difference (Exhibit FOR SERVICES increasing from $346 in 7.20). However, $10 co-pay- 1998 to $359 in 1999. ments remain the most com- • Deductibles for single and fam- mon level of co-payment in ily conventional coverage • In general, deductibles for all types of HMO plans. remained relatively unchanged single and family conven- in 1999, and have been fairly tional plans decrease as • In conventional plans, 20% stable since 1996 (Exhibit firm size increases — $277 coinsurance rates are preva- 7.16). Single conventional for single coverage among lent across all firm sizes deductibles increased from $243 workers in all small firms (3- (Exhibit 7.21). in 1998 to $245 in 1999, while 199 workers), compared with family deductibles rose from $201 for employees of mid- $596 to $605. size and large firms (Exhib- it 7.18). The same trend holds true for PPO and POS deductibles, with employees in small firms generally paying more. 7 section seven 61 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y exhibit 7.1 Average Monthly Worker Contribution for Single and Family Coverage, 1988-1999 $160 $145 $140* $140 $124 $122 $120 $100 $80 $60 $52 $34 $37 $32* $35 $40 $20 $8 $0 SINGLE COVERAGE FAMILY COVERAGE source: 1999 1998 Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999; 1996 Employee Contributions for Premiums and Cost Sharing KPMG Survey of Employer-Sponsored Health Benefits: 1988, 1993, 1996, 1998. 1993 1988 * Estimate is statistically different from the previous year for years 1996-1998. exhibit 7.2 Percentage of Premiums Paid by Covered Workers for Single and Family Coverage, 1988-1999 35% 32 32* 32 30% 29 28 25% 20 21 20% 19 16 15% 11 10% 7 5% section seven 0% SINGLE COVERAGE FAMILY COVERAGE source: 1999 1998 Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999; 1996 KPMG Survey of Employer-Sponsored Health Benefits: 1988, 1993, 1996, 1998. 1993 1988 * Estimate is statistically different from the previous year for years 1996-1998. 62 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 7.3 Average Monthly Worker Premium Contributions, by Firm Size, 1999 Single Coverage Family Coverage CO N V E N T I O N A L P L A N S Small (3-9 Workers) NSD NSD Small (10-24 Workers) NSD NSD Small (25-49 Workers) NSD NSD Small (50-199 Workers) $28 $139 A L L S MA L L F I R M S ( 3 - 1 9 9 W O R K E R S ) 22 112 Midsize (200-999 Workers) 20 109 Large (1,000-4,999 Workers) 15 99 Jumbo (5,000+ Workers) 20 138 ALL FIRM SIZES 20 119 HMO PLANS Small (3-9 Workers) NSD NSD Small (10-24 Workers) NSD NSD Small (25-49 Workers) NSD NSD Small (50-199 Workers) $29 $205* A L L S MA L L F I R M S ( 3 - 1 9 9 W O R K E R S ) 32 143 Midsize (200-999 Workers) 13* 184 Large (1,000-4,999 Workers) 41 156 Jumbo (5,000+ Workers) 33 116 Employee Contributions for Premiums and Cost Sharing ALL FIRM SIZES 30 140 PPO PLANS Small (3-9 Workers) $36 $119 Small (10-24 Workers) 16 157 Small (25-49 Workers) 17 177 Small (50-199 Workers) 24 154 A L L S MA L L F I R M S ( 3 - 1 9 9 W O R K E R S ) 24 151 Midsize (200-999 Workers) 27 155 Large (1,000-4,999 Workers) 22 110 Jumbo (5,000+ Workers) 55 156 ALL FIRM SIZES 34 146 POS PLANS Small (3-9 Workers) NSD NSD Small (10-24 Workers) $17 $141 Small (25-49 Workers) 12* 124 Small (50-199 Workers) 24 194 A L L S MA L L F I R M S ( 3 - 1 9 9 W O R K E R S ) 19 146 Midsize (200-999 Workers) 30 136 Large (1,000-4,999 Workers) 41 140 Jumbo (5,000+ Workers) 72 176 ALL FIRM SIZES 48 158 ALL PLANS Small (3-9 Workers) $25 $99* Small (10-24 Workers) 16 128 7 Small (25-49 Workers) 27 164 section seven Small (50-199 Workers) 25 172* A L L S MA L L F I R M S ( 3 - 1 9 9 W O R K E R S ) 24 144 Midsize (200-999 Workers) 23 158 Large (1,000-4,999 Workers) 30 127 Jumbo (5,000+ Workers) 49 147 ALL FIRM SIZES 35 145 source: NSD: Not sufficient data. Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. * Firm size estimate is statistically different from All Firm Sizes within a plan type. 63 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 7.4 Average Monthly Worker Premium Contributions, by Region, 1999 Single Family Coverage Coverage CO N V E N T I O N A L P L A N S Northeast $19 $71* Midwest 26 102 South 18 176* West 11 80 A L L R EG I O N S 20 119 HMO PLANS Northeast $25 $97* Midwest 17 141 South 26 164 West 52 139 Employee Contributions for Premiums and Cost Sharing A L L R EG I O N S 30 140 PPO PLANS Northeast $32 $102* Midwest 29 127 South 17 156 West 102 196 A L L R EG I O N S 34 146 POS PLANS Northeast $34 $120* Midwest 25 115* South 29 187 West 133 208 A L L R EG I O N S 48 158 ALL PLANS Northeast $30 $104* 7 Midwest 25 127 South 22 166 section seven West 85 170 A L L R EG I O N S 35 145 source: * Region estimate is statistically different from Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. All Regions within a plan type. 64 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y exhibit 7.5 Monthly Worker Contributions for Single and Family Coverage in Conventional and HMO Plans, 1988-1999 $160 149* 151 140 $140 134 117 119 117 $120 103 $100 $80 60 58 $60 46 $40 33 29 29 30* 30 24 20 $20 11 9 $0 CONVENTIONAL SINGLE CONVENTIONAL FAMILY HMO SINGLE HMO FAMILY source: 1999 1998 Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999; 1996 Employee Contributions for Premiums and Cost Sharing KPMG Survey of Employer-Sponsored Health Benefits: 1988, 1993, 1996, 1998. 1993 1988 * Estimate is statistically different from the previous year for years 1996-1998, 1998-1999. exhibit 7.6 Monthly Worker Contributions for Single and Family Coverage in PPO and POS Plans, 1988-1999 $200 189 158 146 146 143 $150 139 129 123 $100 83 44 48 $50 34 40 35 31 32* $0 7 ^ o ^ 7 PPO SINGLE PPO FAMILY POS SINGLE POS FAMILY section seven source: 1999 1998 Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999; 1996 KPMG Survey of Employer-Sponsored Health Benefits: 1988, 1993, 1996, 1998. 1993 1988 * Estimate is statistically different from the previous year for years 1996-1998, 1998-1999. ^ Information was not obtained for POS plans in 1988. o Information was not obtained for POS single coverage in 1993. 65 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 7.7 Percentage of Premium Paid by Firm for Typical Covered Worker in Conventional, HMO, PPO, and POS Plans, by Firm Size, 1999 Single Family Coverage Coverage CO N V E N T I O N A L P L A N S Small (3-199 Workers) 90% 75% Midsize (200-999 Workers) 90 79 Large (1,000-4,999 Workers) 92 80 Jumbo (5,000+ Workers) 91 67 ALL FIRM SIZES 91 73 HMO PLANS Small (3-199 Workers) 83% 67% Midsize (200-999 Workers) 92* 55 Large (1,000-4,999 Workers) 75 67 Jumbo (5,000+ Workers) 82 73 Employee Contributions for Premiums and Cost Sharing ALL FIRM SIZES 83 67 PPO PLANS Small (3-199 Workers) 89% 67% Midsize (200-999 Workers) 87 70 Large (1,000-4,999 Workers) 89 78 Jumbo (5,000+ Workers) 80 61 ALL FIRM SIZES 86 68 POS PLANS Small (3-199 Workers) 89% 69% Midsize (200-999 Workers) 83 70 Large (1,000-4,999 Workers) 78 74 Jumbo (5,000+ Workers) 68 63 ALL FIRM SIZES 78 68 ALL PLAN TYPES Small (3-199 Workers) 88% 69% 7 Midsize (200-999 Workers) 88 66 section seven Large (1,000-4,999 Workers) 84 75 Jumbo (5,000+ Workers) 79 67 ALL FIRM SIZES 84 68 source: * Estimate is statistically different from Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. All Firms within a plan type. 66 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y exhibit 7.8 Percentage of Premium Paid by Workers in Conventional and HMO Plans, 1988-1999 40% 38 36 35% 33 32* 33 29 29 29 30 30% 27 27 25% 22 20% 18 19 19* 17 15 15 15% 11 9* 10% 5% 0% CONVENTIONAL SINGLE CONVENTIONAL FAMILY HMO SINGLE HMO FAMILY source: 1999 1998 Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999; 1996 Employee Contributions for Premiums and Cost Sharing KPMG Survey of Employer-Sponsored Health Benefits: 1988, 1993, 1996, 1998. 1993 1988 * Estimate is statistically different from the previous year for years 1996-1998, 1998-1999. exhibit 7.9 Percentage of Premium Paid by Workers in PPO and POS Plans, 1988-1999 40% 39 35 35% 33 32 32 32 31 31 30 30% 26 25% 24 22 19* 20 20% 17 14 14 15% 10% 8 5% ^ ^ 7 0% PPO SINGLE PPO FAMILY POS SINGLE POS FAMILY section seven source: 1999 1998 Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999; 1996 KPMG Survey of Employer-Sponsored Health Benefits: 1988, 1993, 1996, 1998. 1993 1988 * Estimate is statistically different from the previous year for years 1996-1998, 1998-1999. ^ Information was not obtained for POS plans in 1988. 67 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y exhibit 7.10 Percentage of Covered Workers in Plans Where Employer Pays Entire Cost of Single Plan Coverage, All Small Firms (3-199 Workers), 1988, 1996, and 1999 100% 92 80% 62 61 60* 63^ 60% 54 55* 56 52* 48 40% 37 36 30 32 20% ^ 0% Conventional HMO PPO POS ALL PLAN TYPES source: 1999 1996 Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999; 1988 Employee Contributions for Premiums and Cost Sharing KPMG Survey of Employer-Sponsored Health Benefits: 1988, 1996. * Estimate is statistically different from 1996 to 1999. Unable to test All Plan Types. ^ Information was not obtained for POS plans in 1988. exhibit 7.11 Percentage of Covered Workers in Plans Where Employer Pays Entire Cost of Single Plan Coverage, All Large Firms (200+ Workers), 1988, 1996, and 1999 80% 70% 65 60% 49 51 50 52^ 50% 41 40% 35 34 27 29 29 30% 20 22 20% 12* 7 10% ^ 0% section seven Conventional HMO PPO POS ALL PLAN TYPES source: 1999 1996 Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999; 1988 KPMG Survey of Employer-Sponsored Health Benefits: 1988, 1996. * Estimate is statistically different from 1996 to 1999. Unable to test All Plan Types. ^ Information was not obtained for POS plans in 1988. 68 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y exhibit 7.12 Percentage of Covered Workers in Plans Where Employer Pays Entire Cost of Family Plan Coverage, All Small Firms (3-199 Workers), 1988, 1996, and 1999 50% 41 40% 34 34^ 32 32 32 29 30% 26 24* 25 20 20 20% 18 13 10% ^ 0% CONVENTIONAL HMO PPO POS ALL PLAN TYPES source: 1999 1996 Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999; 1988 KPMG Survey of Employer-Sponsored Health Benefits: 1988, 1996. Employee Contributions for Premiums and Cost Sharing * Estimate is statistically different from 1996 to 1999. Unable to test All Plan Types. ^ Information was not obtained for POS plans in 1988. exhibit 7.13 Percentage of Covered Workers in Plans Where Employer Pays Entire Cost of Family Plan Coverage, All Large Firms (200+ Workers), 1988, 1996, and 1999* 25% 22 21 20 21^ 20 20% 19 15% 14 14 11 10 10% 9 8 6 6 5% 7 ^ 0% section seven CONVENTIONAL HMO PPO POS ALL PLAN TYPES source: 1999 1996 Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999; 1988 KPMG Survey of Employer-Sponsored Health Benefits: 1988, 1996. * Tests found no statistically different estimates from the previous year for years 1996-1998, 1998- 1999. Unable to test All Plan Types. ^ Information was not obtained for POS plans in 1988. 69 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 7.14 Percentage of Premium Paid by Firm for Typical Covered Worker in Conventional, HMO, PPO, and POS Plans, by Region, 1999 Single Family Coverage Coverage CO N V E N T I O N A L P L A N S Northeast 91% 87%* Midwest 88 78 South 91 57 West 95* 82 A L L R EG I O N S 91 73 HMO PLANS Northeast 85% 78%* Midwest 90 64 South 83 63 West 77 67 Employee Contributions for Premiums and Cost Sharing A L L R EG I O N S 83 67 PPO PLANS Northeast 85% 82%* Midwest 84 72 South 92 66 West 68 54 A L L R EG I O N S 86 68 POS PLANS Northeast 84% 79%* Midwest 85 75 South 82 68 West 54 42 A L L R EG I O N S 78 68 ALL PLANS Northeast 85% 80%* 7 Midwest 86 73 South 88 65 section seven West 69 57 A L L R EG I O N S 84 68 source: * Estimate is statistically different from All Regions Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. within a plan type. 70 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 7.15 Percentage of Premium Paid by Firm for Typical Covered Worker in Conventional, HMO, PPO, and POS Plans, by Industry, 1999 Single Family Coverage Coverage CO N V E N T I O N A L P L A N S Mining/Construction/Wholesale 89% 79% Manufacturing 92 83 Transportation/Communication/Utility 89 88* Retail NSD NSD Finance 87 85 Service 91 72 State/Local Government 99* 58 Health Care 86 NSD High Tech 82* 77 A L L I N D U ST R I E S 91 73 HMO PLANS Mining/Construction/Wholesale 78% 65% Manufacturing 86 80* Transportation/Communication/Utility 85 81* Retail 76 59 Finance 81 76* Service 84 63 State/Local Government 88 63 Health Care 82 70 High Tech 79 71 Employee Contributions for Premiums and Cost Sharing A L L I N D U ST R I E S 83 67 PPO PLANS Mining/Construction/Wholesale 86% 74% Manufacturing 92 84* Transportation/Communication/Utility 90 87* Retail 73* 67 Finance 87 74 Service 80 59 State/Local Government 97* 58 Health Care 88 64 High Tech 86 78* A L L I N D U ST R I E S 86 68 POS PLANS Mining/Construction/Wholesale 90% 82% Manufacturing 86 78 Transportation/Communication/Utility 89 85* Retail 73 69 Finance 84 73 Service 62 49 State/Local Government 96* 70 Health Care 84 63 High Tech 81 78 A L L I N D U ST R I E S 78 68 ALL PLANS Mining/Construction/Wholesale Manufacturing 87% 88 75% 83* 7 Transportation/Communication/Utility 89 85* section seven Retail 74* 66 Finance 84 75* Service 79 59 State/Local Government 94* 61 Health Care 85 66 High Tech 82 77* A L L I N D U ST R I E S 84 68 source: NSD: Not sufficient data. Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. * Estimate is statistically different from All Industries within a plan type. 71 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y exhibit 7.16 Average Annual Deductibles for Coverage in Conventional, PPO, and POS Plans, 1988-1999* $800 $700 600 596 605 $600 495 $500 $400 375 344 346 359 313 315 324 289 $300 267 243 245 222 190 $200 163 170 181 186 177 106 $100 71 43 41 $0 ^ ^ CONVENTIONAL CONVENTIONAL PPO IN-PLAN PPO OUT-PLAN POS IN-PLAN POS OUT-PLAN SINGLE FAMILY source: 1999 1998 Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999; 1996 Employee Contributions for Premiums and Cost Sharing KPMG Survey of Employer-Sponsored Health Benefits: 1988, 1993, 1996, 1998. 1993 1988 * Tests found no statistically different distribution from the previous year for years 1996-1998, 1998-1999. ^ Information was not obtained for POS plans in 1988 and 1993. exhibit 7.17 Percentage of Covered Workers Facing HMO Copayments for Physician Visits, 1996-1999* 80% 70% 61 59 60% 54 50% 40% 30% 25 23 20 7 20% 10 10 9 10 10% 7 4 section seven 1 2 0 1 1 1 2 1 2 0 0 0 0% NO COPAY $2 PER VISIT $5 PER VISIT $10 PER VISIT $15 PER VISIT $20 PER VISIT OTHER DON'T KNOW source: 1999 1998 Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999; 1996 KPMG Survey of Employer-Sponsored Health Benefits: 1996, 1998. * Tests found no statistically different estimate from the previous year for years 1996-1998, 1998-1999. 72 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 7.18 Average Annual Deductible for Typical Covered Worker, by Firm Size, 1999 Single Coverage Family Coverage CO N V E N T I O N A L P L A N S Small (3-9 Workers) NSD NSD Small (10-24 Workers) NSD NSD Small (25-49 Workers) NSD NSD Small (50-199 Workers) $232 $583 A L L S MA L L F I R M S ( 3 - 1 9 9 W O R K E R S ) 277 658 Midsize (200-999 Workers) 201 502 Large (1,000-4,999 Workers) 201 460* Jumbo (5,000+ Workers) 254 667 ALL FIRM SIZES 245 605 Single Coverage Single Coverage Preferred Provider Non-Preferred Provider Employee Contributions for Premiums and Cost Sharing PPO PLANS Small (3-9 Workers) $304* $381 Small (10-24 Workers) 208 406 Small (25-49 Workers) 305 478 Small (50-199 Workers) 201 303 A L L S MA L L F I R M S ( 3 - 1 9 9 W O R K E R S ) 247 376 Midsize (200-999 Workers) 167 295 Large (1,000-4,999 Workers) 172 329 Jumbo (5,000+ Workers) 175 272* ALL FIRM SIZES 190 315 POS PLANS Small (3-9 Workers) NSD NSD Small (10-24 Workers) $169 $743* Small (25-49 Workers) 14* NSD Small (50-199 Workers) 88 336 A L L S MA L L F I R M S ( 3 - 1 9 9 W O R K E R S ) 89* 418 7 Midsize (200-999 Workers) 46 291* section seven Large (1,000-4,999 Workers) 35 312 Jumbo (5,000+ Workers) 12* 358 ALL FIRM SIZES 41 359 source: NSD: Not sufficient data. Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. * Firm size estimate is statistically different from All Firm Sizes within a plan type. 73 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 7.19 Average Annual Deductible for Typical Covered Worker, by Region, 1999 Single Family Coverage Coverage CO N V E N T I O N A L P L A N S Northeast $238 $581 Midwest 205 452* South 275 692 West 257 733 A L L R EG I O N S 245 605 Single Coverage Single Coverage Preferred Provider Non-Preferred Provider PPO PLANS Employee Contributions for Premiums and Cost Sharing Northeast $94* $328 Midwest 201 324 South 210 316 West 192 276 A L L R EG I O N S 190 315 POS PLANS Northeast $21 $323 Midwest 82 397 South 42 419 West 40 267* A L L R EG I O N S 41 359 7 section seven source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. * Region estimate is statistically different from All Regions within a plan type. 74 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 7.20 Percentage of Covered Workers Facing HMO Copayments for Physician Visits, by HMO Type, 1999 Copayment Amount All HMO IPA Staff/Group M ixed Types Model* Model No Copayment 4% 2% 19% 1% $2 per visit 0 0 1 0 $5 per visit 25 21 25 29 $10 per visit 59 63 44 59 $15 per visit 10 11 8 9 $20 per visit 1 1 0 1 Other 2 2 3 1 Don't Know 0 1 0 0 Employee Contributions for Premiums and Cost Sharing TOTA L 100% 100% 100% 100% 7 section seven source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. * Distribution is statistically different from All HMO Types. 75 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 7.21 Percentage of Covered Workers Facing Various Coinsurance Rates in Conventional Plans, by Firm Size, 1999 Coinsurance Rate Worker Pays: Small (3-199 Midsize (200-999 Large (1,000- Jumbo (5,000+ All Firm Sizes Worker s)* Worker s)* 4,999 Worker s) Worker s)* 0% 4% 12% 4% 1% 4% 10% 7 13 7 2 6 15% 0 0 1 2 1 20% 60 63 80 89 75 25% 2 0 0 1 1 30% 4 0 0 0 1 Rate Varies 0 1 4 4 2 Other 21 5 3 2 9 Don't Know 2 6 0 0 1 Employee Contributions for Premiums and Cost Sharing TOTA L 100% 100% 100% 100% 100% 7 section seven source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. * Distribution is statistically different from All Firm Sizes. 76 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 7.22 Percentage of Covered Workers Facing Coinsurance Rates and Copayments in PPO Plans, by Firm Size, 1999 Small Small Small Small Midsize Large Jumbo All Firm (3-9 (10-24 (25-49 (50-199 (200-999 (1,000- (5,000+ Sizes Worker s) Worker s) Worker s) Worker s) Worker s) 4,999 Worker s) Worker s) Preferred Provider CO I N S U R A N C E R AT E W O R K E R PAY S : 0% 6% 39% 2% 8% 12% 10% 7% 9% 10% 17 42 33 39 48 32 39 37 15% 0 0 0 0 2 10 1 4 20% 75 15 36 39 31 45 51 45 25% 0 0 0 0 0 0 0 0 30% 0 0 0 4 0 0 0 0 40% 0 0 0 0 0 0 0 0 Varies 0 0 7 0 5 3 0 2 Other 3 2 2 4 2 0 1 2 Don’t Know 0 2 21 6 0 0 0 2 Employee Contributions for Premiums and Cost Sharing TOTA L 100% 100% 100% 100% 100% 100% 100% 100% CO PAYM E N TS W O R K E R PAY S : $ 2 0% 0% 0% 0% 2% 0% 0% 0% $ 5 0 0 17 17 2 2 4 5 $10 43 71 24 52 79 31 63 57 $15 50 17 50 25 14 62 26 34 $20 7 12 10 6 3 5 7 5 TOTA L 100% 100% 100% 100% 100% 100% 100% 100% Non-Preferred Provider CO I N S U R A N C E R AT E W O R K E R PAY S : 0% 0% 9% 0% 0% 1% 0% 6% 3% 10% 4 0 1 3 10 0 1 3 15% 0 0 0 2 0 1 0 1 20% 37 55 57 40 50 51 28 42 25% 0 0 1 1 2 0 1 1 30% 20 28 16 23 23 27 32 26 35% 0 0 1 1 0 2 2 1 40% 11 2 11 11 6 10 6 8 7 Varies 0 0 7 3 2 2 20 8 section seven Other 6 2 2 3 4 4 5 4 Don’t Know 22 4 4 12 1 1 0 3 TOTA L 100% 100% 100% 100% 100% 100% 100% 100% source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. 77 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 7.23 Percentage of Covered Workers Facing Coinsurance Rates and Copayments in POS Plans, by Firm Size, 1999 Small Small Small Small Midsize Large Jumbo All Firm (3-9 (10-24 (25-49 (50-199 (200-999 (1,000- (5,000+ Sizes Worker s) Worker s) Worker s) Worker s) Worker s) 4,999 Worker s) Worker s) Preferred Provider CO I N S U R A N C E R AT E W O R K E R PAY S : 0% 54% 22% 0% 0% 2% 8% 17% 13% 10% 0 0 0 39 61 16 37 34 15% 0 0 8 0 1 3 7 4 20% 46 78 25 61 22 66 27 40 25% 0 0 0 0 2 0 0 0 30% 0 0 0 0 0 0 7 3 40% 0 0 0 0 0 0 4 2 Varies 0 0 0 0 0 3 1 1 Other 0 0 67 0 11 0 1 4 Employee Contributions for Premiums and Cost Sharing Don’t Know 0 0 0 0 0 3 0 1 TOTA L 100% 100% 100% 100% 100% 100% 100% 100% CO PAYM E N TS W O R K E R PAY S : $5 2% 15% 4% 17% 21% 2% 21% 15% $10 55 49 54 58 51 85 58 61 $15 27 21 33 17 24 8 20 19 $20 16 14 7 5 4 3 0 4 Other 0 1 0 0 1 3 0 1 Don’t Know 0 0 1 3 0 0 1 1 TOTA L 100% 100% 100% 100% 100% 100% 100% 100% Non-Preferred Provider CO I N S U R A N C E R AT E W O R K E R PAY S : 0% 0% 13% 0% 0% 0% 13% 0% 3% 10% 0 0 0 0 0 0 0 0 15% 0 0 3 0 2 0 0 1 7 20% 23 45 73 39 31 28 7 25 25% 0 0 0 0 1 0 0 0 30% 3 16 2 16 13 6 51 25 section seven 35% 0 0 0 4 0 0 0 0 40% 42 8 0 0 34 49 10 21 Varies 30 18 0 0 6 0 1 5 Other 0 0 0 18 12 2 17 11 Don’t Know 3 0 23 23 2 3 14 10 TOTA L 100% 100% 100% 100% 100% 100% 100% 100% source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. 78 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 7.24 Percentage of Overall Single and Family Premiums Paid by Firm, by Percentage of Workforce that is High and Low Income, 1999 Single Coverage Family Coverage PERCENT OF WORKFORCE EARNING MORE THAN $75,000 PER YEAR 5% or less 87% 68% More than 5% & less than 20% 70 64 20% or more 88 80* PERCENT OF WORKFORCE EARNING LESS THAN $20,000 PER YEAR 10% or less 79% 73% More than 10% & less than 35% 88 70 35% or more 82 60 Employee Contributions for Premiums and Cost Sharing 7 section seven source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. * Income estimate is statistically different from All Firm (All Firms data not shown). 79 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T 2.97% 5,230,386 Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Health Benefits section 143.9 8 10,021 81 Employer Health Benefits 1 9 9 9 A n n u a l S u r v e y HEALTH BENEFITS A n ot h e r way e m ploye r s c a n r e s p o n d to t h e r i s i n g c o s t o f h e a lt h i n s u r a n c e i s t o d e c r e a s e t h e s c o p e o f c o v e r e d b e n e f i t s . E l i m i n at i n g a n i n f r e q u e n t ly u s e d benefit may be less burdensome to employees than increasing cost sharing in t h e f o r m o f p r e m i u m c o n t r i b u t i o n s , d e d u c t i b l e s , a n d c o i n s u r a n c e . H e a lt h pl a n s h ave a l s o d i f f e r e n t i at e d t h e m s e lve s o n t h e b a s i s o f c ove r e d b e n e f i t s , w i t h m a n a g e d c a r e p l a n s h i s t o r i c a l ly b e i n g m o r e l i k e ly t o c o v e r p r e v e n t i v e care such as physicals and mammography screenings. • Overall, 84% of employees • Employees in HMO and • Employees in all plan types did not experience a change POS plans also benefit from are rarely covered for infertil- in the level of covered bene- family planning benefits ity benefits – employees in fits they were offered from more often than do employ- conventional plans are the one year ago (Exhibit 8.1). ees in conventional or PPO least likely (24%) to have this Of those workers who experi- plans (Exhibit 8.2). 58% of benefit, while employees in enced a change, slightly employees in HMO plans POS plans are the most like- more were likely to have have coverage for reversible ly (37%) (Exhibit 8.2). experienced an increase in contraceptives and 80% have the level of benefits than a coverage for oral contracep- • Perhaps in response to state decrease – 9% versus 6%, tives. In comparison, 39% of mandates, employees in all respectively. employees in conventional types of health plans receive plans have coverage for consistent coverage for both • HMO and POS plans con- reversible contraceptives, inpatient and outpatient tinue to include preventive and 54% have coverage for mental health care, with at benefits such as adult physi- oral contraceptives. Nearly least 95% of employees cals, well-baby care, and two-thirds of PPO plans offer receiving some level of men- mammography screenings coverage of oral contracep- tal health benefits through more frequently than con- tives (64%), but fewer than their employer-sponsored ventional and PPO plans half (44%) cover reversible health plans (Exhibit 8.2). (Exhibit 8.2). 97% and 94% methods. of HMO and POS plans, • In general, workers in all respectively, covered adult • 37% of Americans with large firms (200 or more physicals, while 63% and 80% employer-based coverage are workers) enjoy more gener- of conventional and PPO covered for abortion services. ous benefits than employees plans, respectively, did so. Coverage varies little across of all small firms (3-199 different types of plans, workers) do (Exhibit 8.2). Health Benefits though all large employers Substantial disparities exist (200 or more workers) are 3 between employees of all to 4 times more likely to small and all large firms with cover abortion services than regards to coverage of are all small employers (3-199 reversible contraceptives, workers) (Exhibit 8.2). abortion, oral contraceptives, 8 and infertility treatments. section eight 82 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 8.1 How Do Levels of Benefits for Covered Workers Compare to Last Year, By Plan Type, 1999 CONVENTIONAL* HMO* LESS THAN MORE THAN LAST YEAR LAST YEAR 1% 6% MORE THAN LESS THAN LAST YEAR LAST YEAR SAME AS 12% 11% LAST YEAR SAME AS 88% LAST YEAR ALL PLAN TYPES 82% DON'T KNOW 1% MORE THAN SAME AS LAST YEAR LAST YEAR 9% 84% PPO* LESS THAN POS* LAST YEAR 6% LESS THAN LAST YEAR DON'T KNOW 3% 1% SAME AS SAME AS MORE THAN MORE THAN LAST YEAR LAST YEAR LAST YEAR LAST YEAR 85% 84% 7% 12% LESS THAN LAST YEAR 8% Health Benefits source: Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. * Distribution is statistically different from All Plan Types. 8 section eight 83 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 8.2 Covered Benefits for Covered Workers in Conventional, HMO, PPO, and POS Plans, by Firm Size, 1999 Benefit All Small Firms A ll Large Firms All Firms (3 - 1 9 9 w or k er s) (2 0 0 or m or e w or k er s) CO N V E N T I O N A L P L A N S Adult Physicals 70% 60% 63% Well-Baby Care 75 77 76 Reversible Contraceptives 32 42 39 Prenatal Care 93 92 92 Mammography Screening 95* 93 94 Abortion Services 13 53 41 Oral Contraceptives 36 62 54 Outpatient Mental 88 99 96 Inpatient Mental 93 99 97 Chiropractic Care 80 89 86 Prescription Drugs 89 100 96 Infertility Treatments 10* 30 24 HMO PLANS Adult Physicals 95% 98% 97% Well-Baby Care 97 100 99 Reversible Contraceptives 57 58 58 Prenatal Care 96 100 99 Mammography Screening 91 100 98 Abortion Services 13* 41 36 Oral Contraceptives 69 82 80 Outpatient Mental 94 99 99 Inpatient Mental 89* 99* 97 Chiropractic Care 43* 73 68 Prescription Drugs 92 100 99 Infertility Treatments 17* 35 32 PPO PLANS Adult Physicals 78% 81% 80% Well-Baby Care 86 93 92 Reversible Contraceptives 32 49 44 Prenatal Care 92 99 97 Mammography Screening 88 98 95 Abortion Services 11* 44 36 Oral Contraceptives 46* 70 64 Outpatient Mental 92* 99* 97 Inpatient Mental 90* 99* 96 Chiropractic Care 71* 92 86 Prescription Drugs 97 100 99 Infertility Treatments 12* 44 36 POS PLANS Adult Physicals 85%* 98%* 94% Well-Baby Care 89* 99* 96 Reversible Contraceptives 39* 68 60 Prenatal Care 92 97 96 Health Benefits Mammography Screening 95 99 98 Abortion Services 12* 51 39 Oral Contraceptives 47* 76 67 Outpatient Mental 89* 99* 96 Inpatient Mental 85 99* 95 Chiropractic Care 61* 87 79 Prescription Drugs 99 99 99 Infertility Treatments 14* 47 37 8 source: section eight * Firm size estimate is statistically different from Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. All Firms within plan type. 84 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T 55,693 .902% Employer Health Benefits 1 9 9 9 A n n ua l S u rve y COBRA $ 6,295 Coverage section 9 3,821 85 section nine Employer Health Benefits 1 9 9 9 A n n u a l S u r v e y 9 COBRA COVERAGE C O B R A Coverage Seeking to address concerns about the portability of employer-ba sed cover- age, Congress included a provision in the Consolidated Omnibus Budget Recon- c i l i at i o n A c t o f 1 9 8 5 . Th e a c t , c o m m o n ly r e f e r r e d t o a s “ C O B R A , ” a l l o w e d employees (and their families) to keep their coverage for a period of time a f t e r l e a v i n g a f i r m . U n d e r C O B R A , w h i c h a p p l i e s o n ly t o f i r m s w i t h 2 0 o r m o r e w o r k e r s , t h e f o r m e r e m p l o y e e o r fa m i ly pa y s f o r t h e f u l l c o s t o f c o v e r a g e , plu s a n a d m i n i st r at i ve f e e o f u p to 2 pe r c e n t . Th i s r e p o rt p rov i d e s n ew n at i o n - al estimates of the number of people who receive coverage under COBRA. • At any given time, about 4.7 • Over one-third of people cov- • In small, large, and jumbo million former employees ered by COBRA (about 1.7 firms, 3% of all workers cov- rely on COBRA for their cov- million) were formerly cov- ered by health benefits are erage (Exhibit 9.1). ered by a firm with 5,000 or COBRA enrollees, com- more workers. pared with 4% in midsize • The service industry repre- firms. sents the largest share of peo- • For every 100 active or former ple covered by COBRA — workers with job-based cover- • In state and local govern- about 1.6 million individuals, age, about 3 are former ment, 4% of covered workers or 35% percent of the total — employees using COBRA to are COBRA enrollees, in likely due in large part to extend their coverage. Differ- contrast with only 2% of high turnover among the ences in this percentage retail workers. workforce in service jobs. across industry, region, and firm sizes are minor. 86 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T section nine Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 9.1 9 C O B R A Coverage Workers Covered By COBRA, by Firm Size, Region, and Industry, 1999 Average # of % of All Estimated COBRA Workers Covered Workers Number of per Firm with COBRA COBRA Enrollees FIRM SIZE Small (3-199 Workers) 1.1* 3% 854,225 Midsize (200-999 Workers) 12.5 4 1,147,608 Large (1,000-4,999 Workers) 34.0* 3 973,942 Jumbo (5,000+ Workers) 235.6* 3 1,678,990 R EG I O N Northeast 4.9 2% 1,007,965 Midwest 5.4 4 1,439,179 South 4.2 3 1,371,127 West 4.9 3 836,495 I N D U ST RY Mining/Construction/Wholesale 2.6* 2% 344,167 Manufacturing 4.6 2 481,219 Transportation/Communication/Utility 6.3 3 160,552 Retail 3.2 2 768,197 Finance 10.6 3 512,318 Service 5.6 4 1,623,519 State/Local Government 8.5 4 314,180 Health Care 3.1 2 316,708 High Tech 6.5 3 133,905 A L L F I R M S I Z E S , R EG I O N S , A N D I N D U ST R I E S 4.8 3% 4,654,766 source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. * Estimate is statistically different from All Firms. 87 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T 2.8% $974,382 Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Prescription Drug and Mental Health 98.45 Carve-out Plans section 10 235 89 Employer Health Benefits 1 9 9 9 A n n u a l S u r v e y PRESCRIPTION DRUG AND MENTAL HEALTH CARVE-OUT PLANS section ten E m ploye r s c a r v e o u t p r e s c r i p t i o n d r u g a n d m e n ta l h e a lt h b e n e f i t s f r o m t h e i r b a s i c b e n e f i t s pac k ag e s fo r a va r i e t y o f r e a s o n s . M a ny e m ploye r s s e e p h a r m a - c y b e n e f i t m a n a g e r s ( P B M s ) a n d m e n ta l h e a lt h m a n a g e d c a r e pl a n s r e a l i z i n g 10 economies of mass purchasing, and therefore obtaining deeper discounts from Prescription Drug and Ment al Health Carve-out Plans providers. In addition, carve-out plans often provide employers with better u t i l i z at i o n d ata to m a n a g e c o s t s t h a n t h e y m i g h t r e c e i v e f r o m t h e i r h e a lt h p l a n s . L a s t ly, c a r v i n g o u t p r e s c r i p t i o n d r u g a n d m e n ta l h e a lt h b e n e f i t s f r e - q u e n t ly e l i m i n at e s t h e h e a lt h p l a n “ m i d d l e m a n , ” w h o i s l i k e ly t o s u b - c o n - t r a c t w i t h t h e s a m e v e n d o r w i t h w h o m t h e e m p l o y e r c a n d i r e c t ly c o n t r a c t . P r e s c r i p t i o n d r u g s a n d m e n ta l h e a lt h s e r v i c e s a r e t w o b e n e f i t s h e a d e d i n t h e opposite direction. Since 1990, mental h e a lt h services’ share of claims 7 expenses ha s fallen from 9% to 5% while prescription drug costs are the m o s t r a p i d ly i n c r e a s i n g m e d i c a l c a r e e x p e n s e f o r j o b - b a s e d i n s u r a n c e . S o m e a n a ly s t s h a v e e s t i m at e d t h at r i s i n g p r e s c r i p t i o n d r u g e x p e n s e s n o w c o n s t i - 8 tute 35 percent of the annual increase in medical expenses. PRESCRIPTION DRUG that HMOs are more likely to with prescription drug carve- CARVE-OUT PLANS be fully-insured than the outs were about as likely to other plans, it is therefore not be offered a mail order drug • The popularity of prescrip- surprising that they are less discount plan in 1999 as they tion drug carve-outs in likely to be coupled with a were in 1998 – 73% and 52%, 1999 remains little changed carve-out plan. respectively. from 1998 (Exhibit 10.1). Employees in PPO plans continue to be the most like- • More carve-out plans are • Employees in HMO plans offering mail order discounts. with prescription drug carve- ly to receive their prescrip- 74% of employees in HMOs outs were less likely to be tion drug benefits through a with carve-out plans had a required to use generic drugs carve-out plan (45%) while mail order discount, up from in 1999 than in 1998 (28% employees in HMO plans 59% last year (a statistically versus 37%), although the continue to be the least likely significant change), while change was not significant. (21%). Employers generally the percentage of workers in Trends were fairly stable for self-fund carve-out plans POS plans with discounts workers in other plan types because pharmacy benefit rose from 66% to 78% (Exhibit 10.3). managers are averse to taking (Exhibit 10.2). Employees in on insurance risks. Given PPO and conventional plans 90 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n u a l S u r v e y section ten • Not surprisingly, employees • In general, mental health • The Mental Health Parity in jumbo firms are more like- carve-out plans proved to be Act, passed in 1996, prevented ly to be in health plans with less common than prescrip- health plans from setting prescription drugs carved out tion drug carve-out plans in annual or lifetime dollar lim- than their counterparts in all 1999 (Exhibits 10.1, 10.5), per- its on a member’s mental 10 other firm sizes (Exhibit haps in part because prescrip- health care benefits that are Prescription Drug and Ment al Health Carve-out Plans 10.4). This outcome results tion drug costs represent a less than any such limits for from the fact that larger firms greater and growing portion of general medical and surgical are more likely to have suffi- total medical expenditures services. However, many cient numbers of employees than do mental health benefits. employers have simply to generate the claims experi- replaced dollar limits with ence necessary to be credible • Overall, employees in the limits on the number of visits for self-funding purposes. West were considerably more for outpatient sessions or days likely to work for firms that in the hospital.9 Exhibit 10.7 carved out mental health ben- shows that 63% of employees M E N T A L H E A LT H B E N E F I T S efits – 45% in the West, for in HMO plans with mental AND CARVE-OUT PLANS example, versus 17% in the health benefits were allowed South (Exhibit 10.6). Again, 30 visits or fewer for out- • The percentage of employees employees in jumbo firms patient mental health care per in firms with mental health were much more likely to be year, and nearly 40% were carve-out plans increased in a mental health carve-out allowed 20 visits or fewer. across all plan types from than were workers in small HMO plans are statistically 1998 to 1999, with the greatest firms. Mental health carve- significantly more restrictive increases occurring among outs were more prevalent for while PPO plans are more employees in HMO and employees in POS plans than generous – 39% of employees POS plans (Exhibit 10.5). in the other plan types. in PPO plans with mental Employees in POS plans are health benefits were allowed the most likely (31%) to have a 30 or fewer out patient mental mental health carve-out. health visits per year. In 1991, approximately 36% of covered workers in large firms (200 or more workers) were in plans with no limits on outpatient mental health visits. By 1999, this figure fell to 21% across plan types. NOTES: 7 J. Buck and B. Umland, “Covering 8 Calculated from data on Health Care 9 Pear, Robert, “Insurance Plans Skirt Require- Mental Health and Substance Abuse Financing Administration website ment on Mental Health,” The New York Times, Services,” Health Affairs (July/August, (www.hcfa.gov/stats/nhe-oact/nhe.htm). Section A, Page 1, December 25, 1998. 1997): pp 120-126. 91 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 10.1 Percentage of Covered Workers with Prescription Drug section ten Carve-0uts, by Plan Type, 1998 and 1999* 50% 10 46 45 Prescription Drug and Ment al Health Carve-out Plans 40% 35 35 34 33 33 32 30% 23 21 20% 10% 0% CONVENTIONAL HMO PPO POS ALL PLAN TYPES 1999 1998 source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999; KPMG Survey of Employer-Sponsored Health Benefits: 1998. * Tests found no statistically different estimates from 1998 to 1999. 92 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y exhibit 10.2 section ten Percentage of Those Covered Workers in Prescription Drug Carve-out Plans with Mail Order Discount Plans, 1998 and 1999 80% 78 74 73 71 70% 66 60% 59 10 51 52 Prescription Drug and Ment al Health Carve-out Plans 50% 40% 30% 20% 10% 0% CONVENTIONAL HMO* PPO POS source: 1999 1998 Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999; KPMG Survey of Employer-Sponsored Health Benefits: 1998. * Estimates are statistically different from 1998 to 1999. exhibit 10.3 Percentage of Those Covered Workers in Prescription Carve-out Plans with Mandatory Use of Generic Drugs, 1998 and 1999* 40% 37 38 35% 33 30% 28 25% 24 23 20% 17 15 15% 10% 5% 0% CONVENTIONAL HMO PPO POS source: 1999 1998 Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999; KPMG Survey of Employer-Sponsored Health Benefits: 1998. * Tests found no statistically different estimates from 1998 to 1999. 93 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 10.4 section ten Percentage of Covered Workers in Firms that Carve Out Their Prescription Drug Benefits, by Region and Firm Size, 1999 Conventional HMO PPO POS All Plan 10 Types Prescription Drug and Ment al Health Carve-out Plans R EG I O N Northeast 57% 26% 46% 35% 37% Midwest 47* 10* 45* 30 33 South 21 15* 42 20 29 West 16*^ 32 56 51 43 FIRM SIZE Small (3-199 Workers) 20% 13%* 25%^ 19% 20% Midsize (200-999 Workers) 32 8* 41 16*^ 28 Large (1,000-4,999 Workers) 33 16* 67* 14* 39 Jumbo (5,000+ Workers) 52 29 51 50 43 A L L R EG I O N S A N D F I R M S I Z E S 35% 21%* 45% 32% 34% source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. * Estimate is statistically different from All Plan Types within a plan type. ^ Estimate is statistically different from All Regions and Firms Sizes within a plan type. 94 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 10.5 section ten Percentage of Covered Workers in Firms that Carve Out Mental Health Benefits, by Plan Type, 1998 and 1999* 35% 10 31 Prescription Drug and Ment al Health Carve-out Plans 30% 25 25% 24 23 22 22 20% 19 15 15% 14 10 10% 5% 0% CONVENTIONAL HMO PPO POS ALL PLAN TYPES 1999 1998 source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999; KPMG Survey of Employer-Sponsored Health Benefits: 1998. * Tests found no statistically different estimates from 1998 to 1999. 95 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 10.6 section ten Percentage of Covered Workers in Firms that Carve Out Their Mental Health Benefits, by Region and Firm Size, 1999 Conventional HMO PPO POS All Plan 10 Types Prescription Drug and Ment al Health Carve-out Plans R EG I O N Northeast 21% 13% 18% 26% 20% Midwest 16 16 27 25 23 South 8* 17 14 27 17 West 15* 40 50 57 45 FIRM SIZE Small (3-199 Workers) 17% 13% 15% 14% 14% Midsize (200-999 Workers) 11 11 30 14 21 Large (1,000-4,999 Workers) 10 15 15 12 14 Jumbo (5,000+ Workers) 16* 31 29 52 35 A L L R EG I O N S A N D F I R M S I Z E S 14%* 22% 23% 31% 24% source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. * Estimate is statistically different from All Plan Types within a plan type. 96 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 10.7 section ten Percentage of Covered Workers with Various Outpatient Mental Health Visit Maximums, 1999 Conventional HMO* PPO* POS All Plan Types 10 Prescription Drug and Ment al Health Carve-out Plans 20 Visits or Less 22% 39% 20% 20% 25% 21 to 30 Visits 9 24 19 28 22 31 to 50 Visits 13 5 11 18 11 More than 50 Visits 11 6 4 6 6 Unlimited Visits 16 16 20 14 17 Don’t Know 30 11 26 15 19 source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. * Distribution is statistically different from All Plan Types. 97 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T 546.2 55.0% Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Plan Funding, Direct Contracting, and the Use of 0.192 Pre-existing Condition Clauses section 11 1,957 99 Employer Health Benefits 1 9 9 9 A n n u a l S u r v e y PLAN FUNDING, DIRECT CONTRACTING, AND THE USE OF PRE-EXISTING CONDITION CLAUSES S e l f - i n s u r a n c e r e m a i n s at t r ac t i ve to l a r g e e m ploye r s . Th e E m ploye e R e t i r e m e n t Income and Security Act of 1974 (ERISA), as interpreted by the courts, exempts self-insured pl ans from state regul ation including reserve requirements, man- dated benefits, premium ta xes, and consumer protection regul ations. However, section eleven s e l f - i n s u r a n c e i s a fa r r i s k i e r u n d e rta k i n g fo r s m a l l e r f i r m s , b ec au s e t h ey h ave f e w e r e m p l o y e e s o v e r w h i c h t o s p r e a d t h e c o s t s o f o n e v e r y c o s t ly c l a i m . H o w e v e r , t h e H e a lt h I n s u r a n c e P o r ta b i l i t y a n d A c c o u n ta b i l i t y A c t o f 1 9 9 6 ( H I PA A ) 11 imposes federal requirements on self-insured plans and insured plans alike, and m ay h av e a lt e r e d t h e e q u at i o n s o m e w h at . S o m e o f t h e b e n e f i t s o f s e l f - i n s u r i n g Plan Funding, Direct Contracting, and the Use of Pre-existing Condition Clauses h a v e b e e n e l i m i n a t e d , pa r t i c u l a r ly w i t h r e g a r d s t o t h e u s e o f p r e - e x i s t i n g c o n d i - tion exclusions. Changes in the prevalence of pre-existing condition clauses are m o s t l i k e ly a r e s u lt o f t h e c o n t i n u i n g e f f e c t s o f H I P A A , w h i c h p r e c l u d e s h e a lt h pl ans from imposing such cl auses on new employees if they have not had a sub- stantial gap in coverage. In addition, modest premium increa ses among insured pl ans over the l a st several years may have induced some employers to purcha se insurance rather than self-insure. D u r i n g t h e m i d - 1 9 9 0 s , m a n y b e n e f i t s c o n s u lta n t s s u g g e s t e d t h at d i r e c t c o n t r a c t - ing between employers and providers was the wave of the future. Direct con- t r a c t i n g r e p r e s e n t s a n e f f o r t t o r e d u c e c o s t s b y e l i m i n at i n g t h e h e a lt h p l a n “ m i d d l e m a n . ” F i r m s d i r e c t ly c o n t r a c t w i t h p h y s i c i a n s a n d h o s p i t a l s t o p r o v i d e c a r e t o t h e i r w o r k e r s , a n d d i r e c t ly r e i m b u r s e t h e s e p r o v i d e r s f o r c a r e d e l i v - e r e d . B y 1 9 9 9 , i t i s c l e a r t h at d i r e c t c o n t r a c t i n g h a s n ot y e t ta k e n o f f, a n d i n fac t i s o n t h e d ec l i n e . SELF INSURANCE • With the exception of HMO plans show the most dramat- plans — which are unlikely ic drop of 34 percentage • Since the passage of HIPPA, to self-insure to begin with — points (only the POS results there has been an 8 all types of plans show a were statistically significant). percentage point decline in noticeable drop from 1996 in Workers in conventional the percentage of workers the percentage of employees plans experienced a decline, enrolled in a self-insured covered in self-insured plans from 74% to 62%. Conven- plan (Exhibit 11.1). (Exhibit 11.1). PPO plans tional plans remain the most show the smallest drop of 3 likely to be self-insured. percentage points while POS 100 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n u a l S u r v e y • The total percentage of work- portion of covered workers in PRE-EXISTING CONDITIONS ers enrolled in self-insured a self-insured plan overall – • Since the passage of HIPAA HMO plans has changed little only 28%, compared with a in 1996, the use of pre-existing since 1996 due to two coun- high of 75% in the high tech condition clauses has tervailing trends. Self-insur- industry (Exhibit 11.7). declined considerably among ance has grown among jumbo conventional, PPO, and POS firms from 16% in 1996 to 28% • With premium costs again ris- plans (at statistically signifi- in 1999, while the numbers ing more rapidly among fully- section eleven cant levels from 1996 to 1998) among the remaining firm insured plans — as highlight- (Exhibit 11.11). During the sizes have experienced ed in Section 2 — many com- past year, the percentage of decreases (Exhibit 11.3). panies may consider switch- covered workers in plans with ing to a self-insured alterna- pre-existing condition clauses • A slight decline in self-insur- tive. This trend is another was statistically unchanged ance since 1996 among PPO aspect of the underwriting for conventional, PPO, and plans reflects two offsetting cycle. In the 1990s, the trends – declines among small increased market share of POS plans. (The survey did 11 not ask about pre-existing con- and midsize employers and managed care plans com- Plan Funding, Direct Contracting, and the Use of Pre-existing Condition Clauses dition clauses in HMOs since growth among large and bined with stable premium they are rarely used in that jumbo firms (Exhibit 11.4). costs enabled employers to context, and in some cases are Among all small firms, self- purchase fully-insured health prohibited by law.) insurance in PPOs declined plans at a competitive price. from 36% in 1996 to 17% in • Jumbo firms are the least like- 1999. DIRECT CONTRACTING ly to use pre-existing condi- • Between 1998 and 1999, tion clauses, and large firms • The overall percentage of employers with 200 or more are the most likely (Exhibit employees in self-insured 11.12). Perhaps as a result of workers experienced a consid- POS plans has declined sub- state small group reforms that erable decline in direct con- stantially since 1996, with limit the length of pre-existing tracting with hospitals and jumbo firms showing the condition exclusions, small doctors – the percentage of smallest drop at 17 percentage firms are less likely to impose covered workers in HMOs in points and large firms showing pre-existing condition clauses which the firm contracts the largest drop at 50 percent- than are midsize and large directly fell from 12% in 1998 age points. Between 1998 and employers. Nationally, 42% of to only 3% percent in 1999, a 1999 there was little change employees in PPO plans are statistically significant change overall. (Exhibit 11.5) subject to pre-existing condi- (Exhibit 11.8). By size, 5% percent of workers in HMO tion clauses, compared with • Exhibit 11.6 highlights how plans in large firms are in 30% for POS plans (Exhibit self-insurance increases with plans that contract directly, 11.11). firm size. Across plan types, while virtually no covered 86% of employees in the • Waiting periods for pre-exist- workers in small firms are in smallest firms with 3-9 ing condition clauses remain plans that contract directly, employees had coverage long. Two-thirds of conven- significantly different from all underwritten by an insurer, tional plan members, 84% of firm sizes. (Exhibit 11.10). compared with only 33% of PPO, and 79% of POS employees in jumbo firms. enrollees subject to these Industry variations are similar- clauses must wait 12 months ly pronounced, likely due in before their plan will cover large part to variations in the their pre-existing condition number of small firms across (Exhibits 11.14–11.16). industries. In 1999, the retail industry had the smallest pro- 101 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 11.1 Percentage of Covered Workers in Partly or Completely Self-Insured Plans, by Plan Type, 1988-1999 100% section eleven 81 80% 74 74 74 69 70 66 67 62 60% 11 55 55 56 49* 50 Plan Funding, Direct Contracting, and the Use of Pre-existing Condition Clauses 47 48 40% 22 19 20 19 20% ^ ^ ^ 0% CONVENTIONAL HMO PPO POS ALL PLAN TYPES 1999 1998 1996 1993 1988 source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999; KPMG Survey of Employer- Sponsored Health Benefits: 1988, 1993, 1996, 1998. * Estimate is statistically different from the previous year for years 1996-1998, 1998-1999. Unable to test All Plans. ^ Information was not obtained for HMO plans in 1988 and 1993, and POS plans in 1988. 102 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y exhibit 11.2 Percentage of Covered Workers in Partly or Completely Self-Insured Conventional Plans, by Firm Size, 1996, 1998, and 1999 100% 97 97 96 88 85 81 80% 74 74 69 62 60% 57* section eleven 50 40% 21 20% 16 16 0% ALL SMALL MIDSIZE LARGE JUMBO ALL FIRM SIZES (3-199 WORKERS) (200-999 WORKERS) (1,000-4,999 WORKERS) (5,000+ WORKERS) 11 Plan Funding, Direct Contracting, and the Use of Pre-existing Condition Clauses source: 1999 1998 Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999; 1996 KPMG Survey of Employer-Sponsored Health Benefits: 1996, 1998. * Estimate is statistically different from the previous year for years 1996-1998, 1998-1999. exhibit 11.3 Percentage of Covered Workers in Partly or Completely Self-Insured HMO Plans, by Firm Size, 1996, 1998, and 1999 30% 29 28 25 25% 21 20 20 20% 19* 19 19 16 15% 11 11* 10% 9 6 6 5% 0% ALL SMALL MIDSIZE LARGE JUMBO ALL FIRM SIZES (3-199 WORKERS) (200-999 WORKERS) (1,000-4,999 WORKERS) (5,000+ WORKERS) source: 1999 1998 Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999; 1996 KPMG Survey of Employer-Sponsored Health Benefits: 1996, 1998. * Estimate is statistically different from the previous year for years 1996-1998, 1998-1999. 103 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y exhibit 11.4 Percentage of Covered Workers in Partly or Completely Self-Insured PPO Plans, by Firm Size, 1996, 1998, and 1999 100% 92 94 85 88 84 77 80 80% 72 70 70 66 67 60% section eleven 40% 36 23* 20% 17 0% ALL SMALL MIDSIZE LARGE JUMBO ALL FIRM SIZES (3-199 WORKERS) (200-999 WORKERS) (1,000-4,999 WORKERS) (5,000+ WORKERS) 11 Plan Funding, Direct Contracting, and the Use of Pre-existing Condition Clauses source: 1999 1998 Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999; 1996 KPMG Survey of Employer-Sponsored Health Benefits: 1996, 1998. * Estimate is statistically different from the previous year for years 1996-1998, 1998-1999. exhibit 11.5 Percentage of Covered Workers in Partly or Completely Self-Insured POS Plans, by Firm Size, 1996, 1998, and 1999 100% 95 82 80 78* 78 80% 67* 59 60% 49* 47 40% 31 35* 32* 31 20% 8* 11 0% ALL SMALL MIDSIZE LARGE JUMBO ALL FIRM SIZES (3-199 WORKERS) (200-999 WORKERS) (1,000-4,999 WORKERS) (5,000+ WORKERS) source: 1999 1998 Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999; 1996 KPMG Survey of Employer-Sponsored Health Benefits: 1996, 1998. * Estimate is statistically different from the previous year for years 1996-1998, 1998-1999. 104 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 11.6 Continued on page 106 Percentage of Covered Workers Under Different Funding Arrangements in Conventional, HMO, PPO, and POS Plans, by Firm Size, 1999 Coverage Self-Insured Don’t Underwritten by (Employer bear s Know an Insurer all or any of financial risk) section eleven CO N V E N T I O N A L P L A N S Small (3-9 Workers) NSD NSD NSD Small (10-24 Workers) NSD NSD NSD Small (25-49 Workers)-- NSD NSD NSD Small (50-199 Workers)* 75 25 0 A L L S MA L L F I R M S ( 3 - 1 9 9 W O R K E R S ) * 80 16 4 11 Midsize (200-999 Workers)* 50 50 0 Plan Funding, Direct Contracting, and the Use of Pre-existing Condition Clauses Large (1,000-4,999 Workers)* 19 81 0 Jumbo (5,000+ Workers)* 4 96 0 ALL FIRM SIZES 37 62 1 HMO PLANS Small (3-9 Workers) NSD NSD NSD Small (10-24 Workers) NSD NSD NSD Small (25-49 Workers) NSD NSD NSD Small (50-199 Workers)* 91 2 7 A L L S MA L L F I R M S ( 3 - 1 9 9 W O R K E R S ) * 90 6 4 Midsize (200-999 Workers)* 93 6 1 Large (1,000-4,999 Workers) 78 21 1 Jumbo (5,000+ Workers)* 72 28 0 ALL FIRM SIZES 80 19 1 PPO PLANS Small (3-9 Workers)* 88% 8% 4% Small (10-24 Workers)* 88 4 8 Small (25-49 Workers)* 89 11 0 Small (50-199 Workers)* 67 32 1 A L L S MA L L F I R M S ( 3 - 1 9 9 W O R K E R S ) * 80 17 3 Midsize (200-999 Workers)* 28 72 0 Large (1,000-4,999 Workers)* 12 85 3 Jumbo (5,000+ Workers)* 6 94 0 ALL FIRM SIZES 32 67 1 105 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 11.6 Continued from page 105 Percentage of Covered Workers Under Different Funding Arrangements in Conventional, HMO, PPO, and POS Plans, by Firm Size, 1999 Coverage Self-Insured Don’t Underwritten by (Employer bear s Know an Insurer all or any of financial risk) section eleven POS PLANS Small (3-9 Workers) NSD NSD NSD Small (10-24 Workers) * 100 0 0 Small (25-49 Workers) * 84 15 1 Small (50-199 Workers) * 85 12 3 11 A L L S MA L L F I R M S ( 3 - 1 9 9 W O R K E R S ) * 88 11 2 Plan Funding, Direct Contracting, and the Use of Pre-existing Condition Clauses Midsize (200-999 Workers) * 68 31 1 Large (1,000-4,999 Workers) * 68 32 0 Jumbo (5,000+ Workers) * 21 78 1 ALL FIRM SIZES 53 47 1 ALL PLANS Small (3-9 Workers) * 86% 10% 4% Small (10-24 Workers) * 94 3 3 Small (25-49 Workers) * 87 12 1 Small (50-199 Workers) * 77 20 3 A L L S MA L L F I R M S ( 3 - 1 9 9 W O R K E R S ) * 84 13 3 Midsize (200-999 Workers) 53 46 1 Large (1,000-4,999 Workers)* 42 57 1 Jumbo (5,000+ Workers) * 33 67 0 ALL FIRM SIZES 51 48 1 source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. NSD: Not sufficient data. * Distribution is statistically different from All Firm Sizes within a plan type. 106 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 11.7 Continued on page 108 Percentage of Covered Workers Under Different Funding Arrangements in Conventional, HMO, PPO, and POS Plans, by Industry, 1999 Coverage Self-Insured Don’t Underwritten by (Employer bear s Know an Insurer all or any of financial risk) section eleven CO N V E N T I O N A L P L A N S Mining/Construction/Wholesale* 59 41 0 Manufacturing* 16 84 0 Transportation/Communication/Utility* 8 92 0 Retail NSD NSD NSD Finance 41 59 0 11 Service* 50 49 0 Plan Funding, Direct Contracting, and the Use of Pre-existing Condition Clauses State/Local Government* 4 96 0 Health Care* 42 43 15 High-Tech 29 72 0 A L L I N D U ST R I E S 37% 62% 1% HMO PLANS Mining/Construction/Wholesale 86 14 0 Manufacturing* 66 34 0 Transportation/Communication/Utility 88 12 0 Retail 94 7 0 Finance 83 15 2 Service 77 22 1 State/Local Government* 93 7 0 Health Care 82 17 2 High-Tech* 49 47 4 A L L I N D U ST R I E S 80% 19% 1% PPO PLANS Mining/Construction/Wholesale* 56 41 3 Manufacturing* 20 79 1 Transportation/Communication/Utility* 12 88 0 Retail 40 60 0 Finance* 49 50 1 Service 35 64 2 State/Local Government* 15 86 0 Health Care 34 65 1 High-Tech* 22 77 0 A L L I N D U ST R I E S 32% 67% 1% 107 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 11.7 Continued from page 107 Percentage of Covered Workers Under Different Funding Arrangements in Conventional, HMO, PPO, and POS Plans, by Industry, 1999 Coverage Self-Insured Don’t Underwritten by (Employer bear s Know an Insurer all or any of financial risk) section eleven POS PLANS Mining/Construction/Wholesale 66 34 0 Manufacturing 43 56 1 Transportation/Communication/Utility* 23 77 0 Retail* 83 14 3 11 Finance* 29 71 0 Plan Funding, Direct Contracting, and the Use of Pre-existing Condition Clauses Service 59 40 1 State/Local Government* 67 31 2 Health Care 49 51 0 High-Tech* 12 88 0 A L L I N D U ST R I E S 53% 47% 1% ALL PLANS Mining/Construction/Wholesale* 64 35 1 Manufacturing* 33 66 1 Transportation/Communication/Utility* 37 63 0 Retail* 71 28 1 Finance 54 45 1 Service* 55 43 2 State/Local Government* 41 58 1 Health Care 51 47 2 High-Tech* 23 75 2 A L L I N D U ST R I E S 51% 48% 1% source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. NSD: Not sufficient data. * Distribution is statistically different from All Industries within a plan type. 108 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y exhibit 11.8 Percentage of Covered Workers in HMO Plans Where Firm Contracts Directly with Doctors and Hospitals, by Firm Size, 1998 and 1999 20% 16.0 15% section eleven 12.3^ 10% 6.0 5.4 5% 4.0 3.8 2.9 1.1 ^ 0.1 0% ALL SMALL MIDSIZE LARGE JUMBO* ALL FIRM SIZES* (3-199 WORKERS) (200-999 WORKERS) (1000-4999 WORKERS) (5000+ WORKERS) 11 Plan Funding, Direct Contracting, and the Use of Pre-existing Condition Clauses source: 1999 1998 Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999; KPMG Survey of Employer-Sponsored Health Benefits, 1998. * Statistically different from the previous year for years 1998 to 1999. ^ Data not collected for small firms in 1998. exhibit 11.9 Percentage of Covered Workers in POS Plans Where Firm Contracts Directly with Doctors and Hospitals, by Firm Size, 1998 and 1999* 20% 16.2 15% 12.5 10% 9.4 7.0 6.4 5.5 5.5 4.9 5% 3.4 1.1 0% ALL SMALL MIDSIZE LARGE JUMBO ALL FIRM SIZES (3-199 WORKERS) (200-999 WORKERS) (1000-4999 WORKERS) (5000+ WORKERS) source: 1999 1998 Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999; KPMG Survey of Employer-Sponsored Health Benefits, 1998. * Tests found no statistically different estimates from the previous year for years 1998-1999. 109 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 11.10 Percentage of Covered Workers in Firms That Contract Directly with Doctors and Hospitals in their HMO and POS Plans, by Region and Firm Size, 1999 % of Worker s in Firms % of Worker s in Firms That Contract Directly That Contract Directly with HMOs with POS Plans section eleven R EG I O N Northeast 1% 4% Midwest 2 6 South 5 7 West 2 2 11 FIRM SIZE Small (3-199 Workers) 0%* 1%* Plan Funding, Direct Contracting, and the Use of Pre-existing Condition Clauses Midsize (200-999 Workers) 1 6 Large (1,000-4,999 Workers) 5 7 Jumbo (5,000+ Workers) 4 6 A L L R EG I O N S A N D F I R M S I Z E S 3% 5% source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. * Estimate is statistically different from All Firms within a plan type. 110 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 11.11 Percentage of Covered Workers With Pre-existing Condition Clauses, by Plan Type, 1996, 1998, and 1999 80% section eleven 70% 64 61 60% 50% 47 11 46* Plan Funding, Direct Contracting, and the Use of Pre-existing Condition Clauses 42 40% 38* 35 30 30% 24* 20% 10% 0% CONVENTIONAL PPO POS 1999 1998 1996 source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999; KPMG Survey of Employer-Sponsored Health Benefits: 1996, 1998. * Estimate is statistically different from the previous year for years 1996-1998, 1998-1999. 111 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y exhibit 11.12 Percentage of Covered Workers With Pre-existing Condition Clauses, by Firm Size, 1999 80% 71* 70% 65* 62 60% 50% section eleven 46 45 42 39 40% 36 35 30 30% 25 23 22 23 19* 20% 10% 0% ALL SMALL MIDSIZE LARGE JUMBO ALL FIRM SIZES 11 (3-199 WORKERS) (200-999 WORKERS) (1,000-4,999 WORKERS) (5,000+ WORKERS) Plan Funding, Direct Contracting, and the Use of Pre-existing Condition Clauses source: POS PPO Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. CONVENTIONAL * Estimate is statistically different from All Firm Sizes within a plan type. exhibit 11.13 Percentage of Covered Workers With Pre-existing Condition Clauses, by Region, 1999* 60% 56 52 50% 42 40 39 40% 36 36 35 31 33 30 30% 27 29 23 20% 16 10% 0% NORTHEAST MIDWEST SOUTH WEST ALL REGIONS source: POS PPO Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. CONVENTIONAL * Tests found no statistically different estimates from All Regions within a plan type. 112 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 11.14 Percentage of Covered Workers in Conventional Plans with Pre-existing Condition Limitations and Months to Wait Before Coverage, 1999 PERCENTAGE WITH NUMBER OF PRE-EXISTING MONTHS BEFORE CONDITION LIMITATIONS COVERAGE section eleven DON'T KNOW 4 MONTHS OR LESS 1% 11% 5-6 MONTHS YES 35% 17% 11 Plan Funding, Direct Contracting, and the Use of Pre-existing Condition Clauses NO 12 MONTHS 64% 67% 7-11 MONTHS 5% source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. 113 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 11.15 Percentage of Covered Workers in POS Plans with Pre-existing Condition Limitations and Months to Wait Before Coverage, 1999 PERCENTAGE WITH NUMBER OF PRE-EXISTING MONTHS BEFORE section eleven CONDITION LIMITATIONS COVERAGE 4 MONTHS OR LESS DON'T KNOW 3% 1% 5-6 MONTHS 11% 11 YES 7-11 MONTHS 30% 2% Plan Funding, Direct Contracting, and the Use of Pre-existing Condition Clauses NO 12 Months 69% 84% source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. 114 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 11.16 Percentage of Covered Workers in PPO Plans with Pre-existing Condition Limitations and Months to Wait Before Coverage, 1999 PERCENTAGE WITH NUMBER OF section eleven PRE-EXISTING MONTHS BEFORE CONDITION LIMITATIONS COVERAGE DON'T KNOW 4 MONTHS OR LESS 1% 5% 5-6 MONTHS 12% 11 7-11 MONTHS Plan Funding, Direct Contracting, and the Use of Pre-existing Condition Clauses YES 4% 42% NO 57% 12 MONTHS 79% source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. 115 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T 4.45% $87,503 Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Retiree Health Benefits 184.6 section 12 9,761 117 Employer Health Benefits 1 9 9 9 A n n u a l S u r v e y RETIREE HEALTH BENEFITS O n c e pa rt o f t h e i m pl i c i t s o c i a l co n t r ac t b e t we e n e m ploye r s a n d e m ploye e s , r e t i r e e h e a lt h b e n e f i t s h ave d e c l i n e d ove r t h e pa s t 1 5 ye a r s . Th e d e c l i n e o f r e t i r e e h e a lt h b e n e f i t s , l i k e j o b s e c u r i t y, i l l u s t r at e s m a j o r c h a n g e s o c c u r - ring in the Americ an workpl ace. This decline is a signific ant development, and has important implications for Medicare policy issues now under dis- cussion. About 13 million Medicare beneficiaries and tens of millions of active workers looking forward to retirement depend on employer-spon- 10 s o r e d h e a lt h b e n e f i t s to p r ot e c t t h e m a g a i n s t t h e c o s t o f h e a lt h c a r e . R e s e a r c h e r s h ave fo u n d t h at r e t i r e e h e a lt h b e n e f i t s a r e o n e o f t h e m o s t i m p o r ta n t c o n s i d e r at i o n s i n t h e r e t i r e m e n t d e c i s i o n o f e a r ly r e t i r e e s . Fo r section twelve e m p loy e r s , r e t i r e e h e a lt h b e n e f i t s r e p r e s e n t a r a p i d ly r i s i n g c o s t c o m p o - n e n t , a n d s i n c e ac c o u n t i n g c h a n g e s p u t i n pl ac e i n 1 9 9 2 , r e t i r e e h e a lt h costs must now be incorporated a s future liabilities on bal ance sheets. The 1 9 9 9 s u r v e y f i n d s t h at d u r i n g a p e r i o d o f u n p r e c e d e n t e d p r o s p e r i t y, m a n y 12 large employers reduced the generosity of their retiree benefits. Retiree Health Benefits • The percentage of employ- • On average, 41% of all large • Among all small firms (3-199 ers offering retiree health firms (200 or more workers) workers) offering retiree benefits in all large firms offered retiree health bene- health benefits, 71% offer (200 or more workers) fits in 1999, in sharp contrast them to early retirees and remained essentially un- with only 8% of all small 85% to Medicare-eligible changed (Exhibit 12.1). firms (3-199 workers) (Exhib- retirees (data not shown). it 12.2). Variations by indus- try are substantial. For exam- ple, 78% of large government employers offered retiree health benefits, compared with only 3% of large retail firms. 118 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n u a l S u r v e y • Among all large firms (200 or 8% of large (1,000 – 4,999 • Retiree cost-sharing is on the more employees) offering workers) employers did the rise as well. In the past two retiree health benefits, 95% same. By region, 64% of years, 16% of all large offer them to early retirees, firms in the South capped employers (200 or more and 80% to Medicare-eligible the maximum employer con- workers) offering retiree ben- retirees (Exhibit 12.3). Almost tribution, while only 6% in efits increased the share of all employers in the trans- the Midwest and 9% in the premiums paid by retirees portation, communication, Northeast did so (regional (Exhibit 12.7), and 66% of and utility industries offer variations were statistically jumbo firms did so. One- health benefits to early significant). third of firms in the West retirees (significantly different increased the retiree contri- from all firms), but only 51% • Overall, 7% of all large bution, while the manufac- of employers in the trans- employers (200 or more turing sector led the way section twelve portation/communications/ workers) offering retiree cov- among industries at 40% utility industries offer health erage terminated conven- (all statistically significant). benefits to Medicare-eligible tional coverage for retiree retirees. health benefits in the past • Employers with high percent- two years, though almost ages of low-income workers • Over the past 2 years, employ- half of jumbo firms (5,000 or are considerably less likely to ers offering retiree benefits more workers) and 20% of offer retiree health benefits. have altered them to control firms in the West reported 45% of firms with 10% or less 12 costs. doing so (both statistically of employees earning less Retiree Health Benefits significant) (Exhibit 12.5). than $20,000 per year offered • 35% of all large employers Similarly, 8% of all large retiree health benefits in 1999, (200 or more workers) offer- employers (200 or more in comparison with only 18% ing retiree benefits capped workers) introduced a of firms with 35% or more of the maximum employer con- Medicare Risk HMO to employees earning the same tribution for retiree health retirees in the past two years amount, significantly different coverage (Exhibit 12.4). By (Exhibit 12.6), though from all firms (Exhibit 12.8). firm size, 52% of jumbo many more jumbo firms and (5,000+ workers) employers firms in the West say they capped the maximum did so (both statistically sig- employer contribution while nificant). NOTES: 10 Estimates for Medicare retirees are based on Eppig, Franklin, and Chulis, George, “Trends in Medicare Supplementary Insurance: 1992-1996,” Health Care Financing Review, Fall 1997. 119 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 12.1 Percentage of Employers Offering Retiree Health Benefits, by Firm Size, 1988-1999* 80% 73 72 70 70% 67 67 66 66 64 62 60% 56 55 50% 48 48 46 44 41 41 40 40 section twelve 40% 37 36 36 33 31 30% 20% 12 Retiree Health Benefits 10% 0% MIDSIZE LARGE JUMBO ALL LARGE FIRMS (200-999 WORKERS) (1,000-4,999 WORKERS) (5,000+ WORKERS) (200+ WORKERS) 1999 1998 1995 1993 1991 1988 source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999; KPMG Survey of Employer-Sponsored Health Benefits: 1988, 1991, 1993, 1995, 1998. * Tests found no statistically different estimates from 1998 to 1999. 120 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 12.2 Percentage of Employers Offering Retiree Health Benefits, by Region, Firm Size, and Industry, 1999 All Small Firms All Large Firms (3-199 Worker s) (200 or more Worker s) R EG I O N Northeast 13% 42% Midwest 12 29 South 8 47 West 2* 44 FIRM SIZE Small (3-9 workers) 6% -- Small (10-24 workers) 8 -- section twelve Small (25-49 workers) 21 -- Small (50-199 workers) 17* -- Midsize (200-999 workers) -- 41% Large (1,000-4,999 workers) -- 33 Jumbo (5,000+ workers) -- 70* I N D U ST RY 12 Retiree Health Benefits Mining/Construction/Wholesale 2%* 22% Manufacturing 7 27 Transportation/Communication/Utility NSD 70* Retail 1* 3* Finance 8 46 Service 14 57 State/Local Government 24* 78* Health Care 10 21* High Tech 1* 10* A L L R EG I O N S , S MA L L A N D L A R G E F I R M S I Z E S , A N D I N D U ST R I E S 8% 41% source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. NSD: Not sufficient data. * Estimate is statistically different from All Regions, Firm Sizes, and Industries. 121 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 12.3 Percentage of Large Employers Offering Retiree Health Benefits to Early^ and Medicare-Eligible Retirees, Among Large Firms Offering Retiree Coverage, by Firm Size, Region, and Industry, 1999 % of Large Employer s % of Large Employer s Offering Retiree Health Offering Retiree Health Benefits to Early^ Benefits to Medicare- Retirees Eligible Retirees FIRM SIZE (LARGE FIRMS) Midsize (200-999 workers) 95% 78% Large (1000-4999 workers) 97 85 Jumbo (5000+ workers) 99 93 section twelve R EG I O N Northeast 89% 89% Midwest 93 52* South 99 88 West 97 81 12 I N D U ST RY Mining/Construction/Wholesale NSD NSD Retiree Health Benefits Manufacturing 95 86 Transportation/Communication/Utility 100* 51 Retail NSD NSD Finance 73 88 Service 98 83 State/Local Government 97 78 Health Care 79 73 High Tech NSD NSD A L L L A R G E F I R M S I Z E S , R EG I O N S , A N D I N D U ST R I E S 95% 80% source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. NSD: Not sufficient data. ^ Early retiree means those retiring before age 65. * Estimate is statistically different from All Firms. 122 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 12.4 In Firms Offering Retiree Benefits, Changes Made in Past Two Years to Retiree Health Coverage: Capped the Maximum Employer Contribution For Retirees, in Large Firms, by Firm Size, Region, and Industry, 1999 Yes No Don’t Know FIRM SIZE (LARGE FIRMS) Midsize (200-999 Workers) 38% 61% 1% Large (1,000-4,999 Workers)* 8 89 3 Jumbo (5,000+ Workers)* 52 47 1 R EG I O N Northeast* 9% 89% 2% Midwest* 6 91 3 section twelve South* 64 35 1 West 24 76 0 I N D U ST RY Mining/Construction/Wholesale NSD NSD NSD Manufacturing* 16 81 3 Transportation/Communication/Utility* 5 95 0 12 Retiree Health Benefits Retail NSD NSD NSD Finance* 10 88 2 Service* 48 50 2 State/Local Government* 10 88 2 Health Care* 8 92 0 High Tech NSD NSD NSD A L L L A R G E F I R M S I Z E S , R EG I O N S , A N D I N D U ST R I E S 35% 64% 2% source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. NSD: Not sufficient data. * Distribution is statistically different from All Firms. 123 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 12.5 In Firms Offering Retiree Benefits, Changes Made in Past Two Years to Retiree Health Coverage: Terminated Conventional Plan Coverage For Retirees in Large Firms, by Firm Size, Region, and Industry, 1999 Yes No Don’t Know FIRM SIZE (LARGE FIRMS) Midsize (200-999 Workers) 4% 95% 1% Large (1,000-4,999 Workers) 5 95 0 Jumbo (5,000+ Workers)* 46 54 0 R EG I O N Northeast* 13% 86% 1% Midwest 3 96 1 section twelve South* 2 97 1 West* 20 80 0 I N D U ST RY Mining/Construction/Wholesale NSD NSD NSD Manufacturing 4 96 0 12 Transportation/Communication/Utility 4 96 0 Retiree Health Benefits Retail NSD NSD NSD Finance* 30 68 2 Service 7 93 0 State/Local Government 1 96 3 Health Care* 1 93 6 High Tech NSD NSD NSD A L L L A R G E F I R M S I Z E S , R EG I O N S , A N D I N D U ST R I E S 7% 92% 1% source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. NSD: Not sufficient data. * Distribution is statistically different from All Firms. 124 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 12.6 In Firms Offering Retiree Benefits, Changes Made in Past Two Years to Retiree Health Coverage: Introduced Medicare Risk HMO To Retirees in Large Firms, by Firm Size, Region, and Industry, 1999 Yes No Don’t Know FIRM SIZE (LARGE FIRMS) Midsize (200-999 Workers)* 3% 96% 1% Large (1,000-4,999 Workers) 11 89 0 Jumbo (5,000+ Workers)* 62 38 0 R EG I O N Northeast 10% 88% 2% Midwest* 2 98 0 section twelve South 4 96 0 West* 26 71 3 I N D U ST RY Mining/Construction/Wholesale NSD NSD NSD Manufacturing* 9 86 5 Transportation/Communication/Utility 8 92 0 12 Retiree Health Benefits Retail NSD NSD NSD Finance* 20 80 0 Service 8 92 0 State/Local Government 9 89 2 Health Care* 6 88 6 High Tech NSD NSD NSD A L L L A R G E F I R M S I Z E S , R EG I O N S , A N D I N D U ST R I E S 8% 91% 1% source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. NSD: Not sufficient data. * Distribution is statistically different from All Firms. 125 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 12.7 In Firms Offering Retiree Benefits, Changes Made in Past Two Years to Retiree Health Coverage: Increased the Share of Contributions for Premiums Required by Retirees in Large Firms, by Firm Size, Region, and Industry, 1999 Yes No Don’t Know FIRM SIZE (LARGE FIRMS) Midsize (200-999 Workers)* 10% 90% 0% Large (1,000-4,999 Workers)* 27 72 1 Jumbo (5,000+ Workers)* 66 32 2 R EG I O N Northeast 11% 88% 1% Midwest* 25 75 0 section twelve South* 9 91 0 West* 33 67 0 I N D U ST RY Mining/Construction/Wholesale NSD NSD NSD Manufacturing* 40 59 1 12 Transportation/Communication/Utility 12 88 0 Retiree Health Benefits Retail NSD NSD NSD Finance 21 79 0 Service 11 89 0 State/Local Government* 30 68 2 Health Care 17 83 0 High Tech NSD NSD NSD L A R G E F I R M S I Z E S , R EG I O N S , A N D I N D U ST R I E S 16% 83% 1% source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. NSD: Not sufficient data. * Distribution is statistically different from All Firms. 126 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 12.8 Percentage of all Large Firms (200 or more Workers) Offering Retiree Benefits, by Percentage of Workforce that is High and Low Income, 1999 Yes No Don’t Know PERCENT OF W ORKFORCE EARNING MORE THAN $75,000 PER YEAR 5% or less 42% 57% 1% More than 5% & less than 20% 30 70 0 20% or more 47 53 0 section twelve PERCENT OF W ORKFORCE EARNING LE SS THAN $20,000 PER YEAR 10% or less 45% 55% 0% More than 10% & less than 35% 66 34 0 35% or more 18* 82 0 12 Retiree Health Benefits source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. * Income estimate is statistically different from All Firms (All Firms data not shown). 127 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T 3,938 $993,865 Employer Health Benefits 1 9 9 9 A n n ua l S u rve y The Role of NCQA Accreditation 5.887 and HEDIS Performance Measures section 13 17% 129 Employer Health Benefits 1 9 9 9 A n n u a l S u r v e y THE ROLE OF NCQA ACCREDITATION The Role of NCQA Accredit ation and HEDIS Performance Measures AND HEDIS PERFORMANCE MEASURES A s m a j o r p u r c h a s e r s o f h e a lt h c ove r a g e , e m ploye r s h ave t h e p ot e n t i a l to u s e their purchasing decisions to shape the quality of care in the American h e a lt h c a r e s y s t e m . To e l e v a t e t h e i m p o r t a n c e o f o b j e c t i v e q u a l i t y m e a s u r e s in e m ploye r s ’ h e a lt h plan selection process, the National Committee for Quality Assurance (NCQA), a private non-profit organization, evaluates how well HMO and POS plans are managing their delivery systems. NCQA examines h e a lt h pl a n s ’ c l i n i c a l a n d a d m i n i s t r at i ve s ys t e m s , p h ys i c i a n c r e d e n t i a l s , u t i - lization management, patient satisfaction, and many other aspects of a h e a lt h plan’s operations. NCQA also collects data from h e a lt h plans on numerous measures of performance, such as immunization rates, termed the H e a lt h Plan Employer Data and Information Set (HEDIS). However, NCQA a c c r e d i tat i o n a n d H E D I S d ata c o n t i n u e t o p l ay a r e l at i v e ly m i n o r r o l e i n e m ploye r s ’ s e l e c t i o n o f h e a lt h pl a n s . 13 section thirteen NCQ A ACCREDITATION for the drive to bring rigorous • The percentage of employ- AND HEDIS quality measurement to the ees in firms that are familiar health plan selection process. with HEDIS again varies • Familiarity with NCQA accreditation has decreased greatly by firm size – only 7% across all firm sizes except for • The contrast between small among small firms, com- and large firms with regards pared with 76% among small firms (Exhibit 13.1), to NCQA familiarity is sub- jumbo firms (both statistical- with a substantial decrease stantial – 13% among employ- ly significant distributions) among large and jumbo ees in the smallest firms, in (Exhibit 13.2). Only firms firms (the decline across all comparison with 76% of the with 5,000 or more workers firms was statistically signifi- largest. This gap suggests the have any appreciable famil- cant from the previous year.) presence of a two-tiered plan iarity with HEDIS perfor- Among the latter, for exam- selection process: one for the mance measures. Among ple, the percentage of work- health plans offered to work- state and local governments, ers in firms familiar with ers in smaller firms that 76% of employees are in accreditation declined from largely does not use objective firms familiar with HEDIS; 90% in 1998 to 76% in 1999. quality measures, and another in contrast, the same is true In small and midsize firms, for workers in large firms. for only 20% in the retail the figures remained relative- ly stable. This trend occurs industry, as well as in the in striking contrast to the mining/construction/whole- developments from 1996 to sale industries. Again, a two- 1998 and, should it continue, tiered system appears to exist: has worrisome implications workers in certain skilled, 130 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n u a l S u r v e y The Role of NCQA Accredit ation and HEDIS Performance Measures white-collar professions are EMPLOYERS’ CRITERIA FOR • Firms in the West, with its much more likely to have C H O O S I N G H E A LT H P L A N S well established tradition of their health plans chosen at managed care, are more likely • When choosing a health plan, least in part on the basis of to rate both cost and most employers rated the number standardized quality measures measures of access/quality as of physicians in the network, than workers in the trades and “very important” than are the reputation and credentials other industries. firms in other regions, but less of the physicians, and the cost of the plan most highly – likely to do so with regards to • Among firms offering an approximately two-thirds of the number of physicians in HMO or POS plan, the per- the network (Exhibit 13.6). covered workers were in firms centage of workers in firms These firms appear to have that rated these criteria as where NCQA accreditation is devalued provider choice in “very important” (Exhibit mandatory for these plan favor of other criteria. 13.5). On the other end of the types is negligible, except for Employers in the South are spectrum, few workers were in the largest firms – 26% for much less likely to rate plan firms that rated HEDIS data workers in jumbo firms, ver- cost as “very important” – 56% and NCQA accreditation as sus single digits for all the rest of covered workers in this “very important” — 10% and (all statistically significant dis- region versus a range of 72% 18% of the time, respectively. tributions) (Exhibit 13.3). to 79% in the other regions. Workers in the West are far • Surprisingly, the cost of the more likely to work for a firm plan is less important among • Covered workers in firms with 13 where accreditation is manda- the highest percentage of small firms than among mid- section thirteen tory – 34%, versus single digits high-income workers were far size and large firms, contrary for all other regions. Seeming- more likely to have their firms to what one might expect ly the high level of managed cite NCQA accreditation as given the higher rates that care penetration in the West “very important” in the plan small firms pay for health ben- comes along with a commen- selection process (23%) than efits (Exhibit 13.5). Perhaps surate increase in firms’ workers in firms with the small firms that find cost to be requiring health plans to be smallest percentage of such a major issue simply opt not to NCQA accredited. workers – 7% (Exhibit 13.7). offer coverage. Jumbo firms are considerably less likely to Similarly, the corresponding • Only jumbo firms have any rate cost as “very important” figures for HEDIS data were propensity to contribute more 17% and 3%, respectively than all other firm sizes, with to accredited plans, and even (Exhibit 13.8). only 52% of covered workers in this percentage is small – 13% firms doing so, and are much of workers in jumbo firms (a more likely to rate HEDIS statistically significant differ- data and NCQA accreditation ence) (Exhibit 13.4). Again, as “very important.” the West is significantly more likely to have workers in firms contributing more to accredit- ed plans (30%), as are workers in the service sector (14%). 131 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y The Role of NCQA Accredit ation and HEDIS Performance Measures Exhibit 13.1 Percentage of Covered Workers in Firms that are Familiar with NCQA Accreditation, by Firm Size, 1996, 1998, and 1999 100% 90* 80 80% 76 60% 57* 56 51 44 45* 40% 35* 32 33* 13 28 section thirteen 20 20% 12* 13 0% ALL SMALL MIDSIZE LARGE JUMBO ALL FIRM SIZES (3-199 WORKERS) (200-999 WORKERS) (1,000-4,999 WORKERS) (5,000+ WORKERS) 1999 1998 1996 source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999; KPMG Survey of Employer-Sponsored Health Benefits: 1996, 1998. * Estimate is statistically different from previous year for years 1996-1998, 1998-1999. 132 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y The Role of NCQA Accredit ation and HEDIS Performance Measures Exhibit 13.2 Percentage of Covered Workers in Firms That Are Familiar With HEDIS, by Firm Size, Region, and Industry, 1999 Yes No Don’t Know FIRM SIZE All Small (3-199 Workers)* 7% 93% 0% Midsize (200-999 Workers)* 10 89 1 Large (1,000-4,999 Workers)* 27 73 0 Jumbo (5,000+ Workers)* 76 24 0 R EG I O N Northeast 41% 59% 0% Midwest 35 64 1 South 36 64 0 West* 46 54 0 I N D U ST RY Mining/Construction/Wholesale* 20% 80% 0% 13 Manufacturing 38 61 1 section thirteen Transportation/Communication/Utility* 57 43 0 Retail* 20 80 0 Finance 45 55 0 Service 34 66 0 State/Local Government* 76 24 0 Health Care* 27 72 1 High Tech* 66 34 0 A L L F I R M S I Z E S , R EG I O N S , A N D I N D U ST R I E S 39% 61% 0% source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. * Distribution is statistically different from All Firms. 133 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y The Role of NCQA Accredit ation and HEDIS Performance Measures Exhibit 13.3 Percentage of Covered Workers in Firms Where NCQA Accreditation is a Mandatory Requirement, for Firms Offering an HMO or POS Plan, by Firm Size, Region, and Industry, 1999 Yes No Don’t Know FIRM SIZE All Small (3-199 Workers)* 1% 98% 1% Midsize (200-999 Workers)* 2 97 1 Large (1,000-4,999 Workers)* 5 91 4 Jumbo (5,000+ Workers)* 26 74 0 R EG I O N Northeast 9% 89% 2% Midwest 9 90 1 South* 5 94 1 West* 34 64 2 I N D U ST RY 13 Mining/Construction/Wholesale* 1% 98% 0% Manufacturing 13 87 0 section thirteen Transportation/Communication/Utility 8 89 3 Retail 8 92 0 Finance 12 87 1 Service* 17 82 1 State/Local Government 7 92 1 Health Care* 6 90 4 High Tech 15 83 2 A L L F I R M S I Z E S , R EG I O N S , A N D I N D U ST R I E S 12% 87% 1% source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. * Distribution is statistically different from All Firms. 134 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y The Role of NCQA Accredit ation and HEDIS Performance Measures Exhibit 13.4 Percentage of Covered Workers in Firms Where Firm Contributes More to NCQA-Accredited Plans, for Firms Offering an HMO or POS Plan, by Firm Size, Region, and Industry, 1999 Yes No Don’t Know FIRM SIZE All Small (3-199 Workers)* 1% 98% 0% Midsize (200-999 Workers)* 1 98 1 Large (1,000-4,999 Workers)* 0 97 3 Jumbo (5,000+ Workers)* 13 86 1 R EG I O N Northeast* 1% 96% 3% Midwest* 1 98 1 South* 0 99 1 West* 30 70 0 I N D U ST RY Mining/Construction/Wholesale 2% 98% 0% 13 Manufacturing* 0 97 3 section thirteen Transportation/Communication/Utility* 0 100 0 Retail* 1 99 0 Finance 1 97 2 Service* 14 85 1 State/Local Government* 0 99 1 Health Care* 0 95 5 High Tech 2 97 1 A L L F I R M S I Z E S , R EG I O N S , A N D I N D U ST R I E S 5% 93% 2% source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. * Distribution is statistically different from All Firms. 135 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 13.5 Continued on page 137 Percentage of Covered Workers in Firms Citing the Importance The Role of NCQA Accredit ation and HEDIS Performance Measures of Features When Choosing a Health Plan, by Firm Size, 1999 All Firm Small Midsize Large Jumbo Sizes (3-199 (200-999 (1,000- (5,000+ Worker s) Worker s) 4,999 Worker s) Worker s) NUMBER OF PHYSICIANS Very Important 68% 62% 78% 79% 63% Somewhat Important 26 25 17 17 35 Somewhat Unimportant 1 2 1 1 1 Not At All Important 2 5 3 0 0 Criteria Not Used 2 6 1 2 1 Don’t Know 1 1 1 1 0 R E P U TAT I O N A N D CR ED E N T I A L S O F THE PHYSICIANS Very Important 67% 63% 72% 65% 67% Somewhat Important 28 28 23 31 29 Somewhat Unimportant 2 2 2 1 2 Not At All Important 1 3 0 0 0 Criteria Not Used 2 3 2 2 1 Don’t Know 1 1 1 1 0 13 CO ST O F T H E P L A N section thirteen Very Important 67% 73% 82% 78% 52% Somewhat Important 28 24 17 20 39 Somewhat Unimportant 1 1 0 1 1 Not At All Important 3 1 0 0 8 Criteria Not Used 0 0 0 0 0 Don’t Know 1 0 1 1 0 E A S E O F MA K I N G A P P O I N TM E N TS WITH PHYSICIANS Very Important 34% 41% 41% 32% 26% Somewhat Important 51 41 35 59 61 Somewhat Unimportant 9 6 13 5 10 Not At All Important 1 4 1 1 0 Criteria Not Used 4 7 9 2 2 Don’t Know 1 0 1 2 0 EASE OF GAINING AC C E S S TO S P E C I A L I STS Very Important 49% 55% 66% 42% 39% Somewhat Important 46 34 30 54 56 Somewhat Unimportant 2 3 1 1 2 Not At All Important 1 3 1 0 0 Criteria Not Used 3 5 2 2 2 Don’t Know 1 0 1 1 0 136 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 13.5 Continued from page 136 Percentage of Covered Workers in Firms Citing the Importance The Role of NCQA Accredit ation and HEDIS Performance Measures of Features When Choosing a Health Plan, by Firm Size, 1999 All Firm Small Midsize Large Jumbo Sizes (3-199 (200-999 (1,000- (5,000+ Worker s) Worker s) 4,999 Worker s) Worker s) MEASURABLE E M P LOY E E S AT I S FAC T I O N Very Important 64% 63% 75% 68% 58% Somewhat Important 29 31 22 29 32 Somewhat Unimportant 5 4 2 1 10 Not At All Important 0 0 0 0 0 Criteria Not Used 1 2 1 2 0 Don’t Know 0 0 1 1 0 N C Q A AC CR ED I TAT I O N Very Important 18% 2% 9% 10% 35% Somewhat Important 11 3 6 12 19 Somewhat Unimportant 7 1 2 2 16 Not At All Important 63 94 83 73 29 Criteria Not Used 1 0 0 1 1 Don’t Know 0 0 0 2 0 H ED I S DATA 13 A N D I N F O R MAT I O N section thirteen Very Important 10% 1% 1% 7% 22% Somewhat Important 22 3 4 13 45 Somewhat Unimportant 4 2 2 2 6 Not At All Important 62 93 90 74 25 Criteria Not Used 2 1 2 3 2 Don’t Know 0 0 1 1 0 AC C U R AC Y A N D S P E ED O F C L A I M S PAYM E N T Very Important 64% 56% 82% 71% 59% Somewhat Important 29 34 15 26 32 Somewhat Unimportant 5 4 1 1 9 Not At All Important 0 1 0 0 0 Criteria Not Used 1 4 0 1 0 Don’t Know 1 0 1 1 0 RANGE OF BENEFIT O P T I O N S AVA I L A B L E Very Important 53% 59% 70% 55% 41% Somewhat Important 32 35 26 35 33 Somewhat Unimportant 5 3 2 5 8 Not At All Important 0 1 1 0 0 Criteria Not Used 8 2 2 3 18 Don’t Know 1 0 1 1 0 source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. 137 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y The Role of NCQA Accredit ation and HEDIS Performance Measures Exhibit 13.6 Continued on page 139 Percentage of Covered Workers in Firms Citing the Importance of Features When Choosing a Health Plan, by Region, 1999 All Regions Northeast Midwest South West NUMBER OF PHYSICIANS Very Important 68% 75% 66% 76% 45% Somewhat Important 26 19 26 20 48 Somewhat Unimportant 1 2 1 1 1 Not At All Important 2 1 4 1 2 Criteria Not Used 2 2 3 1 3 Don’t Know 1 0 1 0 1 R E P U TAT I O N A N D CR ED E N T I A L S O F PHYSICIANS Very Important 67% 62% 73% 64% 70% Somewhat Important 28 33 23 31 23 Somewhat Unimportant 2 3 1 2 1 Not At All Important 1 1 1 1 2 Criteria Not Used 2 1 2 1 3 Don’t Know 1 0 1 1 1 13 CO ST O F T H E P L A N Very Important 67% 72% 72% 56% 79% section thirteen Somewhat Important 28 26 25 35 18 Somewhat Unimportant 1 1 3 0 0 Not At All Important 3 0 0 8 1 Criteria Not Used 0 0 0 0 1 Don’t Know 1 1 1 0 1 E A S E O F MA K I N G A P P O I N TM E N TS Very Important 34% 35% 43% 28% 32% Somewhat Important 51 56 43 50 57 Somewhat Unimportant 9 3 6 15 5 Not At All Important 2 2 2 1 2 Criteria Not Used 5 4 5 5 3 Don’t Know 1 1 1 1 0 EASE OF GAINING AC C E S S TO S P E C I A L I STS Very Important 49% 40% 50% 44% 66% Somewhat Important 46 53 42 51 28 Somewhat Unimportant 2 2 3 1 2 Not At All Important 1 1 2 1 1 Criteria Not Used 3 3 3 2 2 Don’t Know 1 1 1 0 0 138 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y The Role of NCQA Accredit ation and HEDIS Performance Measures Exhibit 13.6 Continued from page 138 Percentage of Covered Workers in Firms Citing the Importance of Features When Choosing a Health Plan, by Region, 1999 All Regions Northeast Midwest South West MEASURABLE E M P LOY E E S AT I S FAC T I O N Very Important 64% 68% 64% 60% 67% Somewhat Important 29 29 33 29 27 Somewhat Unimportant 5 2 2 10 4 Not At All Important 0 0 0 0 1 Criteria Not Used 1 1 1 1 1 Don’t Know 0 1 1 0 0 N C Q A AC CR ED I TAT I O N Very Important 18% 22% 10% 12% 37% Somewhat Important 11 14 14 10 8 Somewhat Unimportant 7 6 4 13 1 Not At All Important 63 57 71 64 54 Criteria Not Used 1 1 1 1 0 Don’t Know 0 0 0 0 0 H ED I S DATA A N D I N F O R MAT I O N 13 Very Important 10% 13% 11% 10% 6% section thirteen Somewhat Important 22 21 15 20 35 Somewhat Unimportant 4 4 5 4 2 Not At All Important 62 60 65 65 55 Criteria Not Used 2 1 4 1 2 Don’t Know 0 1 0 0 0 AC C U R AC Y A N D S P E ED O F C L A I M S PAYM E N T Very Important 64% 57% 70% 62% 72% Somewhat Important 29 39 25 28 22 Somewhat Unimportant 5 2 3 8 3 Not At All Important 0 1 0 0 1 Criteria Not Used 1 1 1 1 2 Don’t Know 1 1 1 0 0 RANGE OF BENEFIT O P T I O N S AVA I L A B L E Very Important 53% 64% 56% 40% 68% Somewhat Important 32 27 36 36 26 Somewhat Unimportant 5 5 4 7 3 Not At All Important 0 0 0 0 1 Criteria Not Used 8 3 4 17 3 Don’t Know 1 1 1 0 0 source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. 139 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y The Role of NCQA Accredit ation and HEDIS Performance Measures Exhibit 13.7 Percentage of Covered Workers in Firms Citing NCQA Accreditation as an Important Factor in Plan Selection, by Percentage of Workforce that is High and Low Income, 1999 Very Somewhat Somewhat Not at All Criterion Important Important Unimportant Important Not Used PERCENT OF WORKFORCE EARNING MORE THAN $75,000 PER YEAR 5% or less* 7% 9% 3% 80% 1% More than 5% & less than 20%* 31 10 3 55 1% 20% or more* 23 18 5 53 1% PERCENT OF WORKFORCE EARNING LESS THAN $20,000 PER YEAR 10% or less* 24% 10% 5% 60% 1% More than 10% & less than 35% 13 11 2 73 1 13 35% or more* 8 8 2 80 2 section thirteen source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. * Distribution is statistically different from All Firms (All Firms data not shown). 140 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T A Employer Health Benefits 1 9 9 9 A n n ua l S u rve y The Role of NCQA Accredit ation and HEDIS Performance Measures Exhibit 13.8 Percentage of Covered Workers in Firms Citing HEDIS Data as an Important Factor in Plan Selection, by Percentage of Workforce that is High and Low Income, 1999 Very Somewhat Somewhat Not at All Criterion Important Important Unimportant Important Not Used PERCENT OF WORKFORCE EARNING MORE THAN $75,000 PER YEAR 5% or less* 3% 10% 4% 81% 2% More than 5% & less than 20%* 5 32 4 57 2 20% or more * 17 23 8 49 3 PERCENT OF WORKFORCE EARNING LESS THAN $20,000 PER YEAR 10% or less* 7% 28% 4% 60% 1% More than 10% & less than 35%* 8 13 4 72 1 35% or more * 2 7 4 82 5 13 section thirteen source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. * Distribution is statistically different from All Firms (All Firms data not shown). 141 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T A 94.8% $658,442 Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Flexible Benefits and Cafeteria Plans 772.9 section 14 432.3 143 Employer Health Benefits 1 9 9 9 A n n u a l S u r v e y FLEXIBLE BENEFITS AND CAFETERIA PLANS Funded through employee pre-tax contributions, flexible benefit pl ans allow e m ploye e s to pay f o r h e a lt h e x p e n s e s n ot c ove r e d by t h e i r h e a lt h pl a n s , dependent c are expenses, and other types of benefits on a pre-tax basis. In cafeteria plans, employees choose between a menu of benefits based on a fixed d o l l a r a m o u n t o r a f i xe d n u m b e r o f p o i n t s . A f l e x i b l e b e n e f i t pl a n c a n b e pa rt of a c afeteria pl an, or offered as a freestanding option. Flexible benefit and cafeteria plans serve to increase employees’ choice of benefits, while r e d u c i n g ta x a b l e i n c o m e a n d o u t - o f - p o c k e t e x p e n s e s f o r h e a lt h c a r e s e r v i c e s and insurance. Flexible Benefits and Cafeteria Plans • The percentage of workers in 76% of employees in the • Flexible benefit plans are firms offering flexible benefit finance industry have this considerably more common plans has generally decreased option, compared with a low nationally than cafeteria from 1996 to 1999, with the of 22% in the retail industry. plans – 50% for the former exception of midsize firms versus 27% for the latter. Ben- (Exhibit 14.1). Among small • Surprisingly, the likelihood efits administrators may see firms, the prevalence of flexi- of workers having a cafeteria cafeteria plans as more diffi- ble benefit plans decreased plan option does not vary cult to administer, given the from 31% in 1996 to 19% in nearly as much by firm size wide array of choices they 1999. Among jumbo firms, as it does with flexible bene- tend to offer. the figure fell from 71% in fit plans (Exhibit 14.3). 1996 to 65% in 1999 (changes Employees of midsize firms • The percentage of workers from 1998 to 1999 were not are actually the most likely to offered flexible benefit plans 14 statistically significant). have this option, at 42%. increases along with a firm’s Again, employees in the percentage of high-income section fourteen • The likelihood of offering a finance industry are more workers (Exhibit 14.4). In flexible benefit plan increas- likely to work for firms with a 1999, 64% of workers in firms es with firm size. Workers in cafeteria plan than employ- where 20% or more of the jumbo firms are far more ees in other industries. workforce are high-wage likely to have this option employees were offered a than are workers in small flexible benefit plan, in com- firms – 65% versus 19%. parison with only 44% of Flexible benefit plans are workers in firms with 5% or considerably more common fewer of these employees. in the Midwest (64%) than elsewhere, particularly the West (32%) (Exhibit 14.2). 144 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T A Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 14.1 Percentage of Workers in Firms Offering Flexible Benefit Plans, by Firm Size, 1996, 1998, and 1999 100% 82 80% 70 71 65 65 65 61 59 60% 56^ 52* Flexible Benefits and Cafeteria Plans 49 50 40% 31 19 20% ^ 0% ALL SMALL MIDSIZE LARGE JUMBO ALL FIRM SIZES (3-199 WORKERS) (200-999 WORKERS) (1,000-4,999 WORKERS) (5,000+ WORKERS) 14 section fourteen 1999 1998 1996 source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999; KPMG Survey of Employer-Sponsored Health Benefits: 1996, 1998. * Estimate is statistically different from previous year for years 1996-1998, 1998-1999. ^ This data was not collected from small firms in 1998. 145 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T A Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 14.2 Percentage of Workers in Firms Offering Flexible Benefit Plans, by Firm Size and Industry, 1999 Percentage of Workers in Firms Offering Flexible Benefits FIRM SIZE All Small (3-199 workers) 19%* Midsize (200-999 workers) 61 Large (1,000-4,999 workers) 49 Jumbo (5,000+ workers) 65 R EG I O N Northeast 45% Flexible Benefits and Cafeteria Plans Midwest 64* South 53 West 32 I N D U ST RY Mining/Construction/Wholesale 36%* Manufacturing 53 Transportation/Communication/Utility 68* Retail 22* Finance 76* Service 52 14 State/Local Government 66 Health Care 56 section fourteen High Tech 56 A L L F I R M S I Z E S , R EG I O N S , A N D I N D U ST R I E S 50% source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. * Estimate is statistically different from All Firms. 146 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T A Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 14.3 Percentage of Workers in Firms Offering Cafeteria Plans, by Firm Size, Region, and Industry, 1999 Percentage of Workers in Firms Offering Cafeteria Plans FIRM SIZE All Small (3-199 Workers) 18%* Midsize (200-999 Workers) 42 Large (1,000-4,999 Workers) 28 Jumbo (5,000+ Workers) 26 R EG I O N Northeast 27% Flexible Benefits and Cafeteria Plans Midwest 28 South 30 West 21 I N D U ST RY Mining/Construction/Wholesale 26% Manufacturing 29 Transportation/Communication/Utility 40 Retail 12* Finance 45 Service 31 State/Local Government 10* 14 Health Care 32 section fourteen High Tech 29 A L L F I R M S I Z E S , R EG I O N S , A N D I N D U ST R I E S 27% source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. * Estimate is statistically different from All Firms. 147 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T A Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 14.4 Percentage of Workers Offered Flexible Benefit Plans, by Percentage of Workforce that is High Income, 1999 Yes No PERCENT OF WORKFORCE EARNING MORE THAN $75,000 PER YEAR 5% or less 44% 56% More than 5% & less than 20% 34 66 20% or more 64* 36* Flexible Benefits and Cafeteria Plans 14 section fourteen source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. * Estimate is statistically different from All Firms. 148 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T A .093% $82,376 Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Consumer Protections section 15 24.8 6,503 149 Employer Health Benefits 1 9 9 9 A n n u a l S u r v e y CONSUMER PROTECTIONS O ve r t h e pa st s eve r a l ye a r s , C o n g r e s s a n d t h e stat e s h ave co n s i d e r e d a n u m - ber of proposals that would provide additional protections to consumers in h e a lt h insurance plans, pa r t i c u l a r ly managed care plans. A majority of employers say they are supportive of many of these efforts. At the same time — d u e i n pa rt to stat e l e g i s l at i o n a n d i n pa rt to vo lu n ta ry e f fo rt s by pl a n s and employers — the avail ability of protections for consumers has increased i n m a n y pa r t s o f t h e c o u n t r y. AVAILABILIT Y OF • Workers in the South are EMPLOYER ATTITUDE S PROTECTIONS least likely to be given easier TOWARDS CONSUMER access to OB/GYNs (53%, PROTECTIONS • Nationally, 67% of workers compared to 72-76% in enrolled in an HMO plan • A substantial majority of other regions) (Exhibit can choose to designate an employers say they would 15.3). OB/GYN as a primary care support legislation to make it physician, up substantially easier to get emergency room from 49% in 1998, a statisti- • Fewer workers (25%) enrolled bills paid for (under a “pru- in an HMO plan who have cally significant change dent layperson” standard) chronic conditions can desig- (Exhibit 15.1). and to allow consumers to nate a specialist other than an appeal health plan decisions OB/GYN as a primary care • Workers in jumbo firms are to an independent reviewer physician (Exhibit 15.2). This most likely to have this pro- (Exhibits 15.4 and 15.5). protection is substantially tection — 77% of those who more prevalent in the West work in firms with 5,000 or • Overall,85% of employers Consumer Protections (45%) and Midwest (40%), more employees can desig- support the emergency than in the Northeast (11%) or nate an OB/GYN as a pri- room provision (up from South (9%) (Exhibit 15.3). mary care physician, com- 79% in 1998 – data not pared with 49% of workers shown), and 94% of in firms with fewer than 200 employers support the right employees (Exhibit 15.3). to an independent appeal (up from 88% last year – data not shown). 15 section fifteen 150 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T A Employer Health Benefits 1 9 9 9 A n n u a l S u r v e y • Support for both provisions • Employer support is lower for • As with other provisions, is highest among small giving consumers expanded support is highest among all employers (emergency room rights to sue health plans — small employers (61% sup- care: 85% of employers with one of the most controversial port among firms with 3-199 3-199 workers express sup- measures in the patients’ employees). Only 26% of all port, compared with 69% rights debate — though a large firms (200 or more among firms with 200 or majority of employers say they employees) support the pro- more workers; independent favor it (Exhibit 15.6). posal, although 51% of appeals: 94% support among jumbo firms with 5,000 or employers with 3-199 work- • Overall, 60% of employers more employees expressed ers, compared with 79% express support for the right support for the provision. among firms with 200 or to sue a plan, up substan- more employees). tially from 46% last year – (data not shown). Consumer Protections 15 section fifteen 151 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T A Employer Health Benefits 1 9 9 9 A n n ua l S u rve y exhibit 15.1 Percentage of Covered Workers Enrolled in Firm’s Largest HMO Plan Where Their OB/GYN Can Act as a Primary Care Physician, by Region, 1998 and 1999 80% 76 72 72 70% 67 59 60% 53 51 49 50% 48 44 40% 30% 20% 10% 0% NORTHEAST* MIDWEST SOUTH WEST* ALL REGIONS* source: 1999 1998 Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999; KPMG Survey of Employer-Sponsored Health Benefits, 1998. * Estimates are statistically different from 1998 to 1999. exhibit 15.2 Percentage of Covered Workers Enrolled in Firm’s Largest HMO Plan Where Their Specialist Can Act as Primary Care Physician, by Region, 1998 and 1999* Consumer Protections 50% 45 40 40% 30% 24 24 23 25 22 19 20% 15 11 9 10% section fifteen 0 NORTHEAST* MIDWEST SOUTH WEST ALL REGIONS source: 1999 1998 Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999; KPMG Survey of Employer-Sponsored Health Benefits, 1998. * Tests found no statistically different estimates from previous year for years 1998-1999. 152 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T A Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 15.3 Percentage of Covered Workers in HMO Plans Where Alternative Providers Can Act as Primary Care Physician, by Firm Size, Region, and Industry, 1999 OB/GYN Can Specialist Can Act as Primary Act as Primary Care Physician Care Physician FIRM SIZE All Small (3-199 Workers) 49%* 16% Midsize (200-999 Workers) 63 51 Large (1,000-4,999 Workers) 57 20 Jumbo (5,000+ Workers) 77 20 R EG I O N Northeast 72% 11% Midwest 76 40 South 53 9* West 72 45 I N D U ST RY Mining/Construction/Wholesale 70% 29% Manufacturing 67 21 Transportation/Communication/Utility 66 11 Retail 32* 22 Finance 71 12 Service 74 38 State/Local Government 74 9 Consumer Protections Health Care 37* 11 High Tech 62 6* A L L F I R M S I Z E S , R EG I O N S , AND INDUSTRIE S 67% 25% 15 section fifteen source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. * Estimate is statistically different from All Firms. 153 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T A Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 15.4 Percentage of Firms Favoring Various Consumer Protections: Paying For Emergency Room Visit When Someone Believes He Needs Immediate Medical Attention, by Firm Size, Region, and Industry, 1999 All Small Firms All Large Firms (3-199 worker s) (200 or more worker s) Favor Oppose Don’t Favor Oppose Don’t Know Know FIRM SIZE All Small (3-199 Workers) 85% 8% 6% NSD NSD NSD Midsize (200-999 Workers) NSD NSD NSD 66% 15% 18% Large (1,000-4,999 Workers)^ NSD NSD NSD 81 14 5 Jumbo (5,000+ Workers)^ NSD NSD NSD 67 28 6 R EG I O N Northeast*^ 90% 1% 9% 79% 12% 9% Midwest*^ 77 13 10 73 23 4 South^ 83 11 7 57 13 30 West* 91 8 1 77 13 10 I N D U ST RY Mining/Construction/Wholesale*^ 95% 3% 2% 66% 27% 7% Manufacturing*^ 80 8 13 65 29 6 Transportation/Communication/Utility NSD NSD NSD 74 19 7 Retail^ 89 10 1 90 5 5 Finance^ 74 16 10 63 27 10 Service ^ 81 12 7 63 11 26 Consumer Protections State/Local Government* 59 19 22 65 20 15 Health Care^ 87 5 8 73 20 6 High Tech^ 87 2 11 68 30 2 A L L S MA L L A N D L A R G E F I R M S I Z E S , R EG I O N S , A N D I N D U S T R I E S 85% 8% 6% 69% 16% 15% 15 section fifteen source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. NSD: Not sufficient data. * Distribution is statistically different from All Small Firms. ^ Distribution is statistically different from All Large Firms. 154 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T A Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 15.5 Percentage of Firms Favoring Various Consumer Protections: Allowing People to Appeal Plan Decisions to Independent Reviewer, by Firm Size, Region, and Industry, 1999 All Small Firms All Large Firms (3-199 worker s) (200 or more worker s) Favor Oppose Don’t Favor Oppose Don’t Know Know FIRM SIZE All Small (3-199 Workers) 94% 2% 4% NSD NSD NSD Midsize (200-999 Workers NSD NSD NSD 77% 18% 5% Large (1,000-4,999 Workers)^ NSD NSD NSD 87 10 4 Jumbo (5,000+ Workers) NSD NSD NSD 79 15 6 R EG I O N Northeast*^ 87% 4% 9% 88% 4% 7% Midwest^ 92 4 4 88 9 3 South^ 98 0 2 66 30 4 West 99 0 1 83 11 6 I N D U ST RY Mining/Construction/Wholesale^ 99% 1% 0% 59% 36% 5% Manufacturing* 86 3 11 86 12 3 Transportation/Communication/Utility NSD NSD NSD 86 8 6 Retail^ 97 0 3 92 4 4 Finance 89 1 10 82 12 6 Service 93 3 4 73 22 4 State/Local Government*^ 79 12 8 83 6 11 Consumer Protections Health Care 98 2 0 81 12 7 High Tech^ 98 0 2 92 4 4 A LL S M A LL A N D L A R G E F I R M SIZES, REGIONS, AND INDUSTRIES 94% 2% 4% 79% 16% 5% 15 section fifteen source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. NSD: Not sufficient data. * Distribution is statistically different from All Small Firms. ^ Distribution is statistically different from All Large Firms. 155 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T A Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 15.6 Percentage of Firms Favoring Various Consumer Protections: Allowing Patients to Sue Health Plan For Malpractice, by Firm Size, Region, and Industry, 1999 All Small Firms All Large Firms (3-199 worker s) (200 or more worker s) Favor Oppose Don’t Favor Oppose Don’t Know Know FIRM SIZE All Small (3-199 Workers) 61% 28% 11% NSD NSD NSD Midsize (200-999 Workers)^ NSD NSD NSD 20% 58% 22% Large (1,000-4,999 Workers)^ NSD NSD NSD 45 30 25 Jumbo (5,000+ Workers)^ NSD NSD NSD 51 42 7 R EG I O N Northeast^ 59% 27% 14% 48% 34% 18% Midwest*^ 43 45 12 18 76 7 South^ 67 24 9 15 50 34 West^ 70 21 9 39 37 24 I N D U ST RY Mining/Construction/Wholesale 67% 30% 2% 23% 60% 17% Manufacturing* 47 30 23 23 55 22 Transportation/Communication/Utility^ NSD NSD NSD 18 71 10 Retail^ 76 23 1 42 15 42 Consumer Protections Finance* 56 21 23 29 47 25 Service^ 57 29 14 21 63 16 State/Local Government* 27 48 25 31 49 21 Health Care 60 27 13 25 56 19 High Tech*^ 84 13 2 53 34 13 A L L S MA L L A N D L A R G E F I R M 15 S I Z E S , R EG I O N S , A N D I N D U S T R I E S 61% 28% 11% 26% 52% 22% section fifteen source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. NSD: Not sufficient data. * Distribution is statistically different from All Small Firms. ^ Distribution is statistically different from All Large Firms. 156 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T A 19.6 673 ,009 Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Employer Insecurity About $1,192 the Future section 16 4,072 157 Employer Health Benefits 1 9 9 9 A n n u a l S u r v e y EMPLOYER INSECURITY ABOUT THE FUTURE A s p r e m i u m s b e g i n t o r i s e m o r e r a p i d ly a n d c o n c e r n s a r e r a i s e d a b o u t v a r i a - t i o n s i n q u a l i t y a c r o s s h e a lt h pl a n s , t h e 1 9 9 9 s u r v e y b e g a n to g a u g e t h e l e v e l o f i n s e c u r i t y e m ploye r s h av e a b o u t t h e f u t u r e o f h e a lt h c a r e , a n d to c o m pa r e these perceptions with those found in the general public. OVERALL PERCEPTIONS • On the other hand, 26% of VARIATIONS BY T YPE OF all firms say they are wor- EMPLOYER • Most employers are at least ried (6% “very,” 20% “some- somewhat worried about • While smaller employers what”) that they will have future trends in health care are more concerned than to switch health plans costs and the implications of larger ones about cost, larger because of concerns about those cost increases, though firms express greater worry the quality of care. fewer express concern about about quality of care issues quality of care issues (Exhibits 16.3, 16.4). (Exhibits 16.1, 16.2, 16.3, • A December 1998 survey of the general public by the 16.4). • 28% of firms with 3-199 Kaiser Family Foundation employees say they are found similar concerns about • 72% of all firms say they “very” worried they will costs, but apparently higher are worried (24% “very,” have to switch health plans worry about quality of care 48% “somewhat”) that because of cost concerns, issues. health care costs will compared with 16% of com- increase faster than they panies with 200-999 • 58% of Americans said they can afford. employees, 14% of those were worried (34% “very,” with 1,000-4,999 workers, 24% “somewhat”) that the • 65% of all firms say they and 7% of those with 5,000 amount they would have to are worried (27% “very,” or more employees. pay for health care services 38% “somewhat”) that they or health insurance will will have to switch health • On the other hand, fewer Employer Insecurity About the Future increase. 44% said they plans because of concerns than 8% of small or mid- were worried (28% “very,” about costs. size companies say they are 16% “somewhat”) that they “very” worried they will might not be able to get the • 70% of all firms say they have to switch health plans health care they think they are worried (23% “very,” because of concerns about need because they can’t 47% “somewhat”) that they the quality of care, com- afford it. will have to cut back the pared with 33% of compa- scope of the benefits they nies with 5,000 or more • At the same time, 54% of offer or the amount they employees. Americans said they were contribute towards health worried (29% “very,” 25% insurance for their workers. “somewhat”) that the qual- ity of health care services they receive will get worse. 16 section sixteen 158 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T A Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 16.1 Percentage of Firms Worried about Various Issues: Amount Firm Pays for Health Insurance Will Increase Faster than Firm Can Afford, by Firm Size, Region, and Industry, 1999 Very Somewhat Not Too Not At Don’t Worried Worried Worried All Worried Know ALL FIRMS 24% 48% 18% 9% 0% A L L S MA L L F I R M S (3-199 WORKERS) 24% 48% 18% 10% 0% R EG I O N Northeast* 37% 46% 12% 5% 0% Midwest* 25 32 23 20 0 South 25 52 14 9 0 West* 12 57 25 6 0 I N D U ST RY Mining/Construction/Wholesale 24% 47% 26% 3% 0% Manufacturing* 42 39 18 1 0 Transportation/Communication/Utility NSD NSD NSD NSD NSD Retail 18 71 4 8 0 Finance* 26 24 23 27 0 Service 21 51 13 14 0 State/Local Government* 36 20 23 21 0 Health Care 28 46 26 0 0 High Tech 27 40 21 13 0 A L L S MA L L F I R M S , R EG I O N S , A N D I N D U S T R I E S 24% 48% 18% 10% 0% ALL LARGE FIRMS (200 OR MORE WORKERS) Midsize (200-999 Workers)* 19% 64% 12% 4% 0% Large (1,000-4,999 Workers)* 18 35 43 3 0 Jumbo (5,000+ Workers) 15 59 21 5 0 R EG I O N Northeast * 23% 37% 37% 3% 0% Midwest* 23 62 12 3 0 Employer Insecurity About the Future South* 10 74 11 5 0 West* 27 45 25 3 0 I N D U ST RY Mining/Construction/Wholesale* 19% 40% 38% 3% 0% Manufacturing 19 61 17 4 0 Transportation/Communication/Utility* 48 25 22 4 1 Retail* 9 49 39 3 0 Finance 18 56 24 3 0 Service* 19 71 7 4 0 State/Local Government* 32 34 24 8 1 Health Care 20 50 24 5 0 High Tech* 22 45 27 7 0 ALL LARGE FIRMS, R EG I O N S , A N D I N D U S T R I E S 19% 59% 18% 4% 0% 16 section sixteen source: NSD: Not sufficient data. Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. * Distribution is statistically different from All Firms. 159 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 16.2 Percentage of Firms Worried about Various Issues: Firm Will Have to Cut Back Scope of Benefits or Contribution Amount, by Firm Size, Region, and Industry, 1999 Very Somewhat Not Too Not At Don’t Worried Worried Worried All Worried Know ALL FIRMS 23% 47% 20% 11% 0% A L L S MA L L F I R M S (3-199 WORKERS) 23% 46% 20% 11% 0% R EG I O N Northeast* 28% 58% 12% 2% 0% Midwest* 17 37 24 22 0 South 29 44 17 11 0 West 15 47 29 9 0 I N D U ST RY Mining/Construction/Wholesale 27% 42% 23% 8% 0% Manufacturing* 39 38 20 3 0 Transportation/Communication/Utility NSD NSD NSD NSD NSD Retail 15 67 9 10 0 Finance* 11 70 12 7 0 Service 19 46 19 16 0 State/Local Government* 32 37 10 22 0 Health Care 32 35 26 6 0 High Tech* 13 19 58 10 0 A L L S MA L L F I R M S , R EG I O N S , A N D I N D U S T R I E S 23% 46% 20% 11% 0% ALL LARGE FIRMS (200 OR MORE WORKERS) Midsize (200-999 Workers) 17% 58% 17% 8% 0% Large (1,000-4,999 Workers) 16 62 17 6 0 Jumbo (5,000+ Workers)* 11 55 24 9 0 R EG I O N Northeast 16% 57% 18% 9% 0% Midwest 22 56 16 7 0 South* 10 65 17 8 0 Employer Insecurity About the Future West* 24 51 19 5 1 I N D U ST RY Mining/Construction/Wholesale 18% 51% 21% 9% 0% Manufacturing 18 52 19 11 1 Transportation/Communication/Utility* 43 28 16 12 1 Retail* 8 80 9 3 0 Finance 13 59 21 7 0 Service 17 61 14 7 0 State/Local Government* 19 41 26 12 2 Health Care* 18 38 38 6 0 High Tech* 13 42 34 11 0 ALL LARGE FIRMS, R EG I O N S , A N D I N D U S T R I E S 17% 59% 17% 7% 0% 16 section sixteen source: NSD: Not sufficient data. Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. * Distribution is statistically different from All Firms. 160 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 16.3 Percentage of Firms Worried about Various Issues: Firm Will Have to Switch Plans Because of Concerns about Quality of Care, by Firm Size, Region, and Industry, 1999 Very Somewhat Not Too Not At Don’t Worried Worried Worried All Worried Know ALL FIRMS 6% 20% 34% 39% 1% A L L S MA L L F I R M S (3-199 WORKERS) 5% 21% 34% 39% 1% R EG I O N Northeast 3% 17% 33% 46% 0% Midwest* 10 9 28 49 5 South 5 22 32 41 0 West* 4 31 44 20 0 I N D U ST RY Mining/Construction/Wholesale* 2% 29% 30% 35% 4% Manufacturing* 14 29 30 26 0 Transportation/Communication/Utility NSD NSD NSD NSD NSD Retail 4 9 31 57 0 Finance 11 14 27 49 0 Service* 4 14 47 34 0 State/Local Government* 19 13 31 37 0 Health Care* 10 34 15 41 0 High Tech* 8 14 21 57 0 A L L S MA L L F I R M S , R EG I O N S , A N D I N D U S T R I E S 5% 21% 34% 39% 1% ALL LARGE FIRMS (200 OR MORE WORKERS) Midsize (200-999 Workers) 8% 15% 34% 43% 0% Large (1,000-4,999 Workers)* 4 20 26 49 0 Jumbo (5,000+ Workers)* 33 15 25 27 0 R EG I O N Northeast* 10% 13% 19% 58% 0% Midwest* 4 13 29 53 0 South* 5 15 45 34 0 Employer Insecurity About the Future West* 21 27 24 28 0 I N D U ST RY Mining/Construction/Wholesale 10% 14% 33% 43% 0% Manufacturing* 9 16 45 29 0 Transportation/Communication/Utility* 6 16 53 25 0 Retail* 4 8 10 78 0 Finance* 23 17 29 31 0 Service 8 19 34 40 0 State/Local Government 7 17 36 41 0 Health Care* 5 16 46 32 0 High Tech* 5 31 25 39 0 ALL LARGE FIRMS, R EG I O N S , A N D I N D U S T R I E S 8% 16% 32% 43% 0% 16 section sixteen source: NSD: Not sufficient data. Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. * Distribution is statistically different from All Firms. 161 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 16.4 Percentage of Firms Worried about Various Issues: Firm Will Have to Switch Plans Because of Concerns about Costs, by Firm Size, Region, and Industry, 1999 Very Somewhat Not Too Not At Don’t Worried Worried Worried All Worried Know ALL FIRMS 27% 38% 20% 15% 1% A L L S MA L L F I R M S (3-199 WORKERS) 28% 38% 20% 14% 1% R EG I O N Northeast* 44% 20% 32% 3% 0% Midwest* 12 37 18 29 5 South 33 38 16 13 0 West* 19 52 15 14 0 I N D U ST RY Mining/Construction/Wholesale* 41% 29% 16% 10% 4% Manufacturing 39 27 23 11 0 Transportation/Communication/Utility NSD NSD NSD NSD NSD Retail* 14 62 16 7 0 Finance 20 42 21 17 0 Service* 19 37 23 21 0 State/Local Government 31 33 11 24 0 Health Care 33 38 18 12 0 High Tech 26 46 25 3 0 A L L S MA L L F I R M S , R EG I O N S , A N D I N D U S T R I E S 28% 38% 20% 14% 1% ALL LARGE FIRMS, (200 OR MORE WORKERS) Midsize (200-999 Workers)* 16% 51% 14% 19% 0% Large (1,000-4,999 Workers)* 14 28 45 12 1 Jumbo (5,000+ Workers)* 7 52 23 17 0 R EG I O N Northeast* 14% 27% 41% 18% 0% Midwest* 19 54 13 13 0 South* 10 54 12 24 0 Employer Insecurity About the Future West* 23 41 24 11 0 I N D U ST RY Mining/Construction/Wholesale 15% 48% 22% 15% 0% Manufacturing 14 54 22 10 0 Transportation/ Communication/Utility * 42 28 21 9 0 Retail * 7 12 40 41 0 Finance * 26 37 28 8 0 Service * 15 63 8 14 0 State/Local Government 17 34 23 25 0 Health Care * 16 34 34 15 0 High Tech * 11 32 23 34 0 ALL LARGE FIRMS, R EG I O N S , A N D I N D U S T R I E S 15% 47% 20% 18% 0% 16 section sixteen source: NSD: Not sufficient data. Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. * Distribution is statistically different from All Firms. 162 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 16.5 Percentage of Covered Workers in Firms Concerned that Costs Will Increase Faster Than Firm Can Afford, by Percentage of Workforce that is High and Low Income, 1999 Very Somewhat Not Too Not at All Don’t Know Worried Worried Worried Worried PERCENT OF WORKFORCE EARNING MORE THAN $75,000 PER YEAR 5% or less 24% 57% 15% 5% 0% More than 5% & less than 20%* 20 57 19 4 0 20% or more* 15 54 23 9 0 PERCENT OF WORKFORCE EARNING LESS THAN $20,000 PER YEAR 10% or less 18% 62% 14% 5% 0% More than 10% & less than 35% 21 56 15 8 0 35% or more* 24 51 22 3 0 Employer Insecurity About the Future source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. 16 * Distribution is statistically different from All Firms (All Firms data not shown). section sixteen 163 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 16.6 Percentage of Workers in Firms Concerned that Firm Will Have to Cut Back Scope of Benefits or Contribution Amount, by Percentage of Workforce that is High and Low Income, 1999 Very Somewhat Not Too Not at All Don’t Know Worried Worried Worried Worried PERCENT OF WORKFORCE EARNING MORE THAN $75,000 PER YEAR 5% or less* 20% 48% 24% 8% 0% More than 5% & less than 20%* 12 68 12 9 0 20% or more* 18 42 30 9 0 PERCENT OF WORKFORCE EARNING LESS THAN $20,000 PER YEAR 10% or less* 13% 57% 20% 10% 0% More than 10% & less than 35%* 19 44 28 9 0 35% or more* 22 55 15 7 0 Employer Insecurity About the Future source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. 16 * Distribution is statistically different from All Firms (All Firms data not shown). section sixteen 164 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 16.7 Percentage of Covered Workers in Firms Concerned that Firm Will Have to Switch Plans Because of Concerns about the Quality of Care, by Percentage of Workforce that is High and Low Income, 1999 Very Somewhat Not Too Not at All Don’t Know Worried Worried Worried Worried PERCENT OF WORKFORCE EARNING MORE THAN $75,000 PER YEAR 5% or less* 6% 20% 35% 39% 0% More than 5% & less than 20%* 29 18 21 32 0 20% or more* 7 21 39 34 0 PERCENT OF WORKFORCE EARNING LESS THAN $20,000 PER YEAR 10% or less* 19% 18% 33% 30% 0% More than 10% & less than 35%* 6 24 42 28 0 35% or more * 8 18 20 54 0 Employer Insecurity About the Future source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. * Distribution is statistically different from All Firms (All Firms data not shown). 16 section sixteen 165 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A LT H R E S E A R C H A N D E D U C A T I O N A L T R U S T Employer Health Benefits 1 9 9 9 A n n ua l S u rve y Exhibit 16.8 Percentage of Covered Workers in Firms Concerned that Firm Will Have to Switch Plans Because of Costs, by Percentage of Workforce that is High and Low Income, 1999 Very Somewhat Not Too Not at All Don’t Know Worried Worried Worried Worried PERCENT OF WORKFORCE EARNING MORE THAN $75,000 PER YEAR 5% or less* 18% 50% 17% 15% 0% More than 5% & less than 20% 13 49 27 12 0 20% or more* 11 41 28 21 0 PERCENT OF WORKFORCE EARNING LESS THAN $20,000 PER YEAR 10% or less* 11% 52% 21% 16% 0% More than 10% & less than 35% 17 52 18 13 0 35% or more* 21 41 23 14 0 Employer Insecurity About the Future source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999. 16 * Distribution is statistically different from All Firms (All Firms data not shown). section sixteen 166 T H E K A I S E R F A M I LY F O U N D A T I O N - A N D - H E A L T H R E S E A R C H A N D E D U C A T I O N A L T R U S T The Henry J. Kaiser Family Foundation 2400 Sand Hill Road Menlo Park, CA 94025 650-854-9400 Facsimile 650-854-4800 Washington Office: 1450 G Street NW, Suite 250 Washington, DC 20005 202-347-5270 Facsimile 202-347-5274 www.kff.org Additional copies of this publication (#1538) are available on the Kaiser Family Foundation website at www.kff.org or by calling the Kaiser Family Foundation’s Publication Request line at 1-800-656-4533. 99-KFF-06 October 1999