California Employer Health Benefits Survey 2004 Health Benefits Survey CONTENTS Methods The California Employer Health Benefits Survey is a annually by HRET and the Kaiser Family Foundation. Methods joint product of the California HealthCare Foundation The U.S. results presented here are based on that Overview (CHCF) and Health Research and Educational Trust survey, and are available on the Foundation’s web Availability of Coverage (HRET). The survey was designed and analyzed by site at www.kff.org. Prior to 1999, the national survey Cost of Health Insurance researchers at HRET, and administered by National was conducted by KPMG Peat Marwick LLP. Research LLC (NR). Benefits and Cost Sharing The survey asked questions about the following Enrollment, Choice, and Type The findings are based on a random sample of 790 types of health plans: Health Maintenance interviews with employee benefit managers in Organizations (HMO), Preferred Provider Organiza- Retiree Coverage private firms in California. NR conducted interviews tions (PPO), and Point-of-Service (POS) plans. Employer Attitudes from May to September 2004. As with prior years, Conventional (fee-for-service) plans are generally About CHCF and HRET the sample of firms was drawn from the Dun & excluded from the plan type analyses because they Bradstreet list of private employers with three or comprise such a small share of the California market. more workers. The chart on the next page provides Important Note About Methodology: In prior an overview of the sample distribution by firm size. years, the sample of employers was post stratified The margin of error for responses among all using frequency distributions from Dun & Bradstreet. employers is ϩ/Ϫ3.5%; for responses among Concerns about the volatility of counts in recent employers with 3 to 199 workers is ϩ/Ϫ4.7%; years led Kaiser/HRET to use the Statistics of U.S. and among employers with 200 or more workers Businesses conducted by the U.S. Census as the is ϩ/Ϫ5.2%. Some exhibits do not sum to 100% basis for the post-stratification adjustment in 2003. due to rounding effects. Due to this change, Kaiser/HRET recalculated the The Kaiser Family Foundation sponsored this weights for survey years 1999 to 2002 and modified survey of California employers from 2000 to 2003. D O C U M E N T N AV I G AT I O N estimates published in the survey where appropriate. This contents sidebar serves as A similar employer survey was also conducted The majority of these estimates are not statistically a navigational tool. Click on a in 1999 in California, in conjunction with the Center different. However, please note that the survey category to access that page. for Health and Public Policy Studies at the data published from the old estimates in this chart University of California, Berkeley. This survey is pack may vary slightly from previously published based on a national employer survey conducted reports. © 2004 C ALIFORNIA H EALTH C ARE F OUNDATION 1 Health Benefits Survey CONTENTS Covered Workers, Workers, and Methods Employers, by Firm Size, 2004 Overview Sample Distribution by Firm Size Availability of Coverage Cost of Health Insurance Number of Workers Benefits and Cost Sharing 3–9 10–49 50–199 200–999 1,000 + Enrollment, Choice, and Type Retiree Coverage Covered Workers Employer Attitudes CA 6% 18% 16% 14% 46% Availability of Coverage Cost of Health Insurance U.S. 5% 14% 12% 14% 55% Benefits and Cost Sharing Enrollment, Choice, and Type Workers Retiree Coverage CA 9% 19% 16% 13% 43% Employer Attitudes About CHCF and HRET U.S. 8% 16% 14% 13% 49% Employers CA 58% 33% 7% 2, 1% U.S. 59% 31% 6% 2, 1% Note: Firms that employ more than 1,000 workers comprise less than 2% of the total number of firms. Sources: CHCF/HRET 2004 California Employer Health Benefits Survey; Kaiser/HRET Survey of Employer-Sponsored Health Benefits: 2004 © 2004 C ALIFORNIA H EALTH C ARE F OUNDATION 2 Health Benefits Survey CONTENTS Availability of Coverage Methods Overview ● The percentage of California employers offering health insurance to their workers Sample Distribution by Firm Size declined between 2003 and 2004, from 70% to 67%. As with prior years, firms cited the Availability of Coverage high cost of coverage as the primary reason they did not offer health benefits. Cost of Health Insurance ● The portion of California employers offering health insurance in 2004 was down three Benefits and Cost Sharing percentage points from 2003. This figure is slightly higher than nationally (63%) (Chart 1). Enrollment, Choice, and Type Retiree Coverage ● Nearly all large California employers — those with 200 or more workers — offered health Employer Attitudes insurance, although fewer small businesses do so. Fifty-five percent of the smallest companies, those with 3 to 9 workers, provided coverage in California in 2004. This is Availability of Coverage slightly higher than nationally (52%) (Chart 2). 1.Firms Offering Health Benefits 2.Employers Offering Coverage ● The most common reason cited by employers in California for not offering coverage was by Firm Size high premiums (77%). Employees having coverage elsewhere was also cited by employers 3.Firms Report “Very Important” as a main reason for not offering coverage (37%) (Chart 3). Reasons to Not Offer Coverage 4.Firms Offering Benefits to Part- ● Only 20% of California employers offered coverage to part-time employees, and a very time and Temporary Employees small percentage (5%) of firms offered coverage to temporary workers in 2004 (Chart 4). 5.Employee Eligibility, Take-up Rates, and Coverage ● Even in firms that offered health insurance in 2004, not all workers were covered. Cost of Health Insurance ● Overall, approximately two-thirds of workers (67%) in California firms that offered health insurance in 2004 actually received coverage from that firm. Seventy-nine percent of Benefits and Cost Sharing these workers were eligible for coverage offered by their firm, and 84% of those elected Enrollment, Choice, and Type to take it (Chart 5). Retiree Coverage Employer Attitudes About CHCF and HRET © 2004 C ALIFORNIA H EALTH C ARE F OUNDATION 3 Health Benefits Survey CONTENTS Cost of Health Insurance Methods Overview ● Health insurance premiums in California grew at a slower rate in 2004 than in 2003. Sample Distribution by Firm Size ● Premiums in California grew by 11.4% in 2004, a smaller increase than the 15.8% in 2003. Availability of Coverage It was the fourth consecutive year of double-digit premium increases. Premium increases Cost of Health Insurance in California in 2004 were over six times the California inflation rate of 1.7% (Chart 6). Small continued Benefits and Cost Sharing businesses (from 3 to 199 employees) experienced average premium increases of 10.9% Enrollment, Choice, and Type in 2004. Firms of all sizes experienced premium growth of at least 10% (Chart 7). Retiree Coverage ● In 2004, HMOs experienced slightly higher premium growth (12.3%) than did PPO plans Employer Attitudes (10.6%) or POS plans (10.1%) (Chart 8). In spite of this, HMOs remained the least expensive Availability of Coverage type of health plan, costing nearly 30% less for single coverage than PPO plans, which often provide greater choice of providers and fewer restrictions on access to care. HMO plans Cost of Health Insurance were, on average, less expensive in California than nationally (Chart 9). However, over the past 6.Increases in Premiums Compared to Other Indicators several years, premiums in California have steadily approached the U.S. average. This year, 7.Change in Premiums the average cost for a family PPO plan in California exceeds that in the U.S. by 15%. With 8.Increases in Premiums from the cost of HMO plans still lower than the U.S. average, the overall average premium in Previous Year, by Plan Type California is about the same as nationally. 9.Average Monthly Premiums ● Annual premiums in 2004 for employer-sponsored health insurance in California averaged 10.Average Annual Worker and Employer Contributions $3,685 for single coverage and $10,013 for family coverage, compared with $3,695 for 11.Percentage of Premiums single coverage and $9,950 for family coverage nationwide (Chart 10). Paid by Workers 12.Worker Contribution to Premium 13.Employer Share of Premium Benefits and Cost Sharing Enrollment, Choice, and Type Retiree Coverage Employer Attitudes About CHCF and HRET © 2004 C ALIFORNIA H EALTH C ARE F OUNDATION 4 Health Benefits Survey CONTENTS Cost of Health Insurance, cont. Methods Overview ● The share of health insurance premiums paid by workers increased substantially in 2004, Sample Distribution by Firm Size a trend that is likely to continue as premiums rise. Availability of Coverage ● Nationally, workers contribute more for health coverage than workers in California — Cost of Health Insurance on average, $558 a year for a single policy and $2,661 for a family policy (Chart 10). continued Benefits and Cost Sharing ● On average, workers in California contributed $474 annually for single coverage and Enrollment, Choice, and Type $2,580 for family coverage in 2004, an increase of 13% and 5%, respectively, over 2003 Retiree Coverage contribution levels (Chart 11). Workers’ average share of the premium for single coverage Employer Attitudes in 2004 stayed relatively constant at 13%, while family coverage experienced a slight Availability of Coverage decline from 30% in 2003 to 27% in 2004 (Chart 11). Cost of Health Insurance ● About 30% of California workers are not required to contribute toward their monthly 6.Increases in Premiums premium for single coverage, while 22% contribute more than $60 per month. Workers Compared to Other Indicators in small firms are less likely to make any contribution towards single coverage than 7.Change in Premiums those in large firms, but much more likely to contribute substantially (more than $60 8.Increases in Premiums from Previous Year, by Plan Type per month) to family coverage (Chart 12). 9.Average Monthly Premiums ● The majority of California firms (52%) contribute between 75 and 99% of the single 10.Average Annual Worker and premium; small firms are more likely to pay the full premium for single coverage (39%) Employer Contributions than are large firms (25%), but are less likely to pay the full premium for family coverage 11.Percentage of Premiums Paid by Workers (9%) than are large firms (19%) (Chart 13). 12.Worker Contribution to Premium 13.Employer Share of Premium Benefits and Cost Sharing Enrollment, Choice, and Type Retiree Coverage Employer Attitudes About CHCF and HRET © 2004 C ALIFORNIA H EALTH C ARE F OUNDATION 5 Health Benefits Survey CONTENTS Benefits and Cost Sharing Methods Overview ● Employee costs have increased over the past year. Sample Distribution by Firm Size ● HMO copayments for office visits increased in 2004. The percentage of California HMO Availability of Coverage enrollees with a $5 per visit copayment for a physician office visit fell from 11% in 2003 to Cost of Health Insurance 7% in 2004, while the percentage of enrollees with a copayment of $15 per visit increased Benefits and Cost Sharing continued from 24% in 2003 to 27% in 2004 (Chart 14). In California, the most common copayment for Enrollment, Choice, and Type a physician office visit in 2004 was $10 (about 44% of HMO enrollees in California), while Retiree Coverage nationally the most common copayment in 2004 was $15 for a physician office visit (about Employer Attitudes 40% of HMO enrollees nationally). Availability of Coverage ● Twenty-seven percent of covered workers in large firms (200+ employees) had no out-of- pocket maximum in their health plans, compared with 18% of covered workers in all small Cost of Health Insurance firms (3 to 199 employees). Workers in HMO plans were the most likely to have no cap on Benefits and Cost Sharing their out-of-pocket expenditures, while those in PPO plans were the least likely (Chart 15). 14.HMO Enrollees with Specified Copayments per Office Visit ● Nearly half (49%) of all covered workers faced some form of cost sharing for hospital 15.Workers with Out-of-Pocket admissions in 2004. The most common was a deductible or copayment per admission Limits for Single Coverage (38% of covered workers), followed by coinsurance (8%). The average copayment per 16.Covered Workers with Select admission was $209 in 2004, while the average coinsurance rate was 16% (Chart 16). Hospital Cost Sharing Types 17.Workers Facing Cost Sharing Formulas for Prescription Drugs 18.Average Prescription Drug Copayments, by Drug Type 19.Firms Offering Employees a High- deductible Plan, by Firm Size Enrollment, Choice, and Type Retiree Coverage Employer Attitudes About CHCF and HRET © 2004 C ALIFORNIA H EALTH C ARE F OUNDATION 6 Health Benefits Survey CONTENTS Benefits and Cost Sharing, cont. Methods Overview ● While nearly all active workers with insurance coverage had drug coverage in 2004, many Sample Distribution by Firm Size faced tiered cost sharing, with higher copayments for brand name drugs than generics. Availability of Coverage ● The use of tiered copayments for prescription drugs grew rapidly in an attempt to control Cost of Health Insurance drug costs. The percentage of California workers in plans that used three-tiered drug Benefits and Cost Sharing continued benefits — with one copayment for generic drugs, a higher copayment for preferred drugs Enrollment, Choice, and Type (such as drugs in the formulary), and an even higher copayment for non-preferred drugs Retiree Coverage (drugs not in the formulary) — is now 46%. The percentage of covered workers with the Employer Attitudes same level of cost sharing regardless of drug type fell from 20% in 2003 to 11% in 2004. Despite the high rate of growth in tiered cost sharing, the percentage of California workers Availability of Coverage whose plans required three-tier payments for drugs in 2004 was lower than the national Cost of Health Insurance average (65% of workers) (Chart 17). Benefits and Cost Sharing ● Eighty-one percent of covered workers in California in 2004 were enrolled in a health plan 14.HMO Enrollees with Specified Copayments per Office Visit that used a two, three, or four tier cost sharing formula. Nationally, 88% enrollees in 2004 15.Workers with Out-of-Pocket were enrolled in a plan that used a tiered cost sharing formula (Chart 17). Limits for Single Coverage ● The average copayment for a non-preferred drug rose from $22.49 in 2003 to $25.90 in 16.Covered Workers with Select 2004, an increase of over 15% (Chart 18). Despite this increase, the average copayment in Hospital Cost Sharing Types California for a non-preferred drug was lower than the national average of $33 (not shown). 17.Workers Facing Cost Sharing Formulas for Prescription Drugs ● All small firms (3 to 199 employees) were more likely than other firm sizes to offer a 18.Average Prescription Drug high-deductible health plan — one with an annual deductible of more than $1,000 for Copayments, by Drug Type single coverage. Approximately 18% of all small firms offered a high-deductible health 19.Firms Offering Employees a High- deductible Plan, by Firm Size plan, compared with just 8% of all large firms (200+ employees) (Chart 19). Enrollment, Choice, and Type Retiree Coverage Employer Attitudes About CHCF and HRET © 2004 C ALIFORNIA H EALTH C ARE F OUNDATION 7 Health Benefits Survey CONTENTS Enrollment, Choice, and Type Methods Overview ● Health plan enrollment in California has shifted somewhat to PPOs over the past year. Sample Distribution by Firm Size The percentage of covered workers enrolled in HMOs in California was higher than the Availability of Coverage percentage nationally. Conversely, enrollment in PPOs in 2004 remained lower. Cost of Health Insurance ● The percentage of California workers enrolled in HMOs and of Point-of-Service (POS) plans fell Benefits and Cost Sharing slightly, while the market share of PPOs increased from 29% in 2003 to 36% in 2004 (Chart 20). Enrollment, Choice, and Type Retiree Coverage ● Enrollment patterns in California were very different from the rest of the country. Fifty percent Employer Attitudes of Californians were enrolled in HMOs in 2004, double the 25% national average, while only 36% of California workers were enrolled in PPOs, compared with 55% nationally (Chart 20). Availability of Coverage Cost of Health Insurance ● California employees were more likely than those nationally to have a choice of plans. Benefits and Cost Sharing ● In 2004, 93% of covered workers in large firms (200 or more workers) in California had a choice of health plans, compared with 82% of large employers nationally (Chart 21). Enrollment, Choice, and Type 20.Health Plan Enrollments for ● Both in California and nationally, workers in smaller businesses (3 to 199 workers) were much Covered Workers, by Plan Type less likely than those in larger firms to have a choice of health plans. In California, 64% of 21.Covered Workers with a Choice workers in small firms had a choice of health plans in 2004, versus just 27% nationally (Chart 21). of Health Plans, by Firm Size 22.Employees in Partly or Entirely ● California workers were much less likely than employees nationwide to be in “self-insured” Self-insured Plans, by Plan Type health plans, where the employer provides health coverage directly rather than purchasing Retiree Coverage it through an insurer or HMO. Employer Attitudes ● Thirty-one percent of Californians with employer-sponsored coverage were in a self-insured About CHCF and HRET plan in 2004, compared to 54% nationally (Chart 22). This difference results in large part from the fact that more Californians are enrolled in HMOs than employees nationally. HMOs are less likely than other types of plans to be self-insured. Since federal law prohibits states from regulating the practices of self-insured health plans, the number of workers enrolled in such plans determines the reach of state legislation governing patients’ rights and benefit requirements. © 2004 C ALIFORNIA H EALTH C ARE F OUNDATION 8 Health Benefits Survey CONTENTS Retiree Coverage Methods Overview ● Large firms in California (200 or more workers) were as likely as large firms nationally to Sample Distribution by Firm Size offer retiree health benefits. Smaller firms (3 to 199 workers) in California and nationally Availability of Coverage were less likely than large firms to offer retiree health benefits. Cost of Health Insurance ● Thirty-five percent of large firms in California offered retiree coverage in 2004, nearly Benefits and Cost Sharing identical to the percentage of large firms nationally (36%) (Chart 23). Enrollment, Choice, and Type Retiree Coverage ● Small businesses were much less likely than large firms to offer health benefits to Employer Attitudes retirees in 2004 (2% in California and 5% nationally). Availability of Coverage ● The proportion of firms offering retiree coverage in both California and the U.S. has held relatively steady over the last several years, showing little change since 2001. Cost of Health Insurance Benefits and Cost Sharing Enrollment, Choice, and Type Retiree Coverage 23.Firms that Offer Retiree Benefits Employer Attitudes About CHCF and HRET © 2004 C ALIFORNIA H EALTH C ARE F OUNDATION 9 Health Benefits Survey CONTENTS Employer Attitudes Methods Overview ● Nearly half of large employers (200 or more workers) reported that they were “very Sample Distribution by Firm Size likely” to increase the amount employees pay for premiums in the next year. In addition, Availability of Coverage 18% of California employers reported that they are very or somewhat likely to offer a Cost of Health Insurance high-deductible plan with a health reimbursement arrangement (HRA) within the next Benefits and Cost Sharing two years. Enrollment, Choice, and Type ● Forty-four percent of large employers in California reported that they were “very likely” Retiree Coverage to increase the amount employees pay for health insurance premiums in 2005, with Employer Attitudes continued another 33% being “somewhat likely” to do so. Fifteen percent of large employers cited that they were “very likely” to increase the amount employees pay for prescription drugs Availability of Coverage in 2005 (Chart 24). Cost of Health Insurance ● Ten percent of large firms reported that they were either very or somewhat likely to Benefits and Cost Sharing restrict employee eligibility for coverage, while virtually none reported they were likely Enrollment, Choice, and Type to drop coverage entirely (Chart 24). Retiree Coverage ● Twelve percent of employers reported that they were “very likely” to offer a high-deductible Employer Attitudes plan with an HRA in the next two years. Large firms were more likely to report being “very 24.Likelihood of Large Employers likely” to introduce such a plan than smaller firms (3 to 199 workers), at 20% versus 5% Making Select Changes in 2005 (Chart 25). 25.Firms Likely to Begin Offering a High-deductible Plan with HRA ● Many California firms that shopped for a new plan changed health plan types or insurance in the Next Two Years carriers in 2004. 26.Firms that Shopped for a New Plan, Changed Types or Carriers ● In 2004, 45% of firms in California shopped for a new plan. Of these, 22% changed plan 27.Opinions on Effectiveness of types and 24% changed insurance carriers. (Chart 26). Cost Containment Strategies 28.Firms That Use Select Contribution Incentives About CHCF and HRET © 2004 C ALIFORNIA H EALTH C ARE F OUNDATION 10 Health Benefits Survey CONTENTS Employer Attitudes, cont. Methods Overview ● Few firms viewed current strategies as highly effective at reducing premium increases. Sample Distribution by Firm Size ● Similar percentages (13% to 15%) of California firms reported that disease management, Availability of Coverage higher employee cost sharing, and tighter managed care networks were “very effective” Cost of Health Insurance at containing costs. Only 8% of firms believed consumer driven health plans were “very Benefits and Cost Sharing effective” at containing costs (Chart 27). In general, California firms seem more pessimistic Enrollment, Choice, and Type about the effectiveness of these cost containment strategies when compared to their Retiree Coverage opinions in 2003. Employer Attitudes continued ● For the first time, the survey asked employers about any incentives or contribution Availability of Coverage approaches they were using that might affect the take-up of family coverage. Cost of Health Insurance ● Thirteen percent of California firms reported that they vary the contribution for Benefits and Cost Sharing family coverage based on whether an employee’s family member has the option of obtaining coverage elsewhere. A similar percentage (12%) reported providing Enrollment, Choice, and Type additional compensation or benefits to employees if they elected not to participate Retiree Coverage in the firm’s health benefits. Very few firms (3%) provided additional compensation Employer Attitudes or benefits to employees if they selected single rather than family coverage (Chart 28). 24.Likelihood of Large Employers Making Select Changes in 2005 25.Firms Likely to Offer a High-deductible Plan with HRA in the Next Two Years 26.Firms that Shopped for a New Plan, Changed Types or Carriers 27.Opinions on Effectiveness of Cost Containment Strategies 28.Firms That Use Select Contribution Incentives About CHCF and HRET © 2004 C ALIFORNIA H EALTH C ARE F OUNDATION 11 Health Benefits Survey CONTENTS 1. Firms Offering Health Benefits Methods Overview Sample Distribution by Firm Size Availability of Coverage California U.S. Cost of Health Insurance Benefits and Cost Sharing Enrollment, Choice, and Type Retiree Coverage 70% 71% 70% 69% 68% Employer Attitudes 67% 66% 66% 67% 63% Availability of Coverage 1.Firms Offering Health Benefits 2.Employers Offering Coverage by Firm Size 3.Firms Report “Very Important” Reasons to Not Offer Coverage 4.Firms Offering Benefits to Part- time and Temporary Employees 5.Employee Eligibility, Take-up Rates, and Coverage Cost of Health Insurance Benefits and Cost Sharing Enrollment, Choice, and Type Retiree Coverage Employer Attitudes 2000 2001 2002 2003 2004 About CHCF and HRET Note: Tests found no statistically different estimates from the previous year. Sources: CHCF/HRET California Employer Health Benefits Survey: 2004; Kaiser/HRET California Employer Health Benefits Survey: 2000, 2001, 2002, 2003; Kaiser/HRET Survey of Employer-Sponsored Health Benefits: 2000, 2001, 2002, 2003, 2004 © 2004 C ALIFORNIA H EALTH C ARE F OUNDATION 12 Health Benefits Survey CONTENTS 2. Employers Offering Coverage, Methods by Firm Size Overview Sample Distribution by Firm Size Availability of Coverage Cost of Health Insurance California U.S. Benefits and Cost Sharing Enrollment, Choice, and Type 97% 98% 98% 99% Retiree Coverage 92% Employer Attitudes 89% Availability of Coverage 81% 1.Firms Offering Health Benefits 77% 2.Employers Offering Coverage, by Firm Size 67% 63% 3.Firms Report “Very Important” Reasons to Not Offer Coverage 55% 4.Firms Offering Benefits to Part- 52% time and Temporary Employees 5.Employee Eligibility, Take-up Rates, and Coverage Cost of Health Insurance Benefits and Cost Sharing Enrollment, Choice, and Type Retiree Coverage Employer Attitudes All Firms 3–9 10 – 49 50–199 200–999 1,000 + About CHCF and HRET Workers Workers Workers Workers Workers Note: Estimates for individual firm sizes are statistically different from All Firms for both California and the U.S. Sources: CHCF/HRET California Employer Health Benefits Survey: 2004; Kaiser/HRET Survey of Employer-Sponsored Health Benefits: 2004 © 2004 C ALIFORNIA H EALTH C ARE F OUNDATION 13 Health Benefits Survey CONTENTS 3. Firms Report “Very Important” Methods Reasons to Not Offer Coverage Overview Sample Distribution by Firm Size Availability of Coverage 59% Cost of Health Insurance 72% High Premiums Benefits and Cost Sharing 80% 77% Enrollment, Choice, and Type 29% Retiree Coverage Employees Covered 33% Employer Attitudes Elsewhere 29% 37% 2001 Availability of Coverage 31% 2002 1.Firms Offering Health Benefits Can Attract Good Employees 31% 2003 2.Employers Offering Coverage, Without Offering Insurance 33% 2004 by Firm Size 16%* 3.Firms Report “Very Important” 21% Reasons to Not Offer Coverage 25% 4.Firms Offering Benefits to Part- Administrative Hassle 15% time and Temporary Employees 11% 5.Employee Eligibility, Take-up 16% Rates, and Coverage 14% High Turnover Cost of Health Insurance 23% 11% Benefits and Cost Sharing 12% 8% Enrollment, Choice, and Type Too New 10% Retiree Coverage 14% Employer Attitudes Seriously Ill Employee About CHCF and HRET 12% 7% *Estimate is statistically different from the previous year. Source: CHCF/HRET California Employer Health Benefits Survey: 2004; Kaiser/HRET California Employer Health Benefits Survey: 2001, 2002, 2003. © 2004 C ALIFORNIA H EALTH C ARE F OUNDATION 14 Health Benefits Survey CONTENTS 4. Firms Offering Benefits to Part- Methods time and Temporary Employees Overview Sample Distribution by Firm Size Availability of Coverage Cost of Health Insurance Part-time Employees Benefits and Cost Sharing Enrollment, Choice, and Type California U.S. Retiree Coverage 26% 26% Employer Attitudes 24% Availability of Coverage 23% 22% 1.Firms Offering Health Benefits 21% 21% 2.Employers Offering Coverage, 20% by Firm Size 3.Firms Report “Very Important” Reasons to Not Offer Coverage 4.Firms Offering Benefits to Part- time and Temporary Employees 5.Employee Eligibility, Take-up Rates, and Coverage Temporary Employees Cost of Health Insurance Benefits and Cost Sharing 5% 5% Enrollment, Choice, and Type 4% 4% 3% Retiree Coverage 2% 2% 1% Employer Attitudes 2001 2002 2003 2004 2001 2002 2003 2004 About CHCF and HRET Note: Tests found no statistically different estimates from the previous year. Sources: CHCF/HRET California Employer Health Benefits Survey: 2004; Kaiser/HRET California Employer Health Benefits Survey: 2001, 2002, 2003; Kaiser/HRET Employer Health Benefits Survey: 2001, 2002, 2003, 2004 © 2004 C ALIFORNIA H EALTH C ARE F OUNDATION 15 Health Benefits Survey CONTENTS 5. Employee Eligibility, Take-up Methods Rates, and Coverage Overview Sample Distribution by Firm Size Availability of Coverage Cost of Health Insurance Benefits and Cost Sharing Firms Offering Coverage California U.S. Enrollment, Choice, and Type Retiree Coverage Employer Attitudes 84% 82% 79% 80% Availability of Coverage 1.Firms Offering Health Benefits 2.Employers Offering Coverage, 67% 67% by Firm Size 3.Firms Report “Very Important” Reasons to Not Offer Coverage 4.Firms Offering Benefits to Part- time and Temporary Employees 5.Employee Eligibility, Take-up Rates, and Coverage Cost of Health Insurance Benefits and Cost Sharing Enrollment, Choice, and Type Retiree Coverage Employer Attitudes Eligible Employees Eligible Employees Employees Covered Who Accept Coverage About CHCF and HRET Note: Tests found no statistically different estimates between California and the U.S. Sources: CHCF/HRET California Employer Health Benefits Survey: 2004; Kaiser/HRET Survey of Employer-Sponsored Health Benefits: 2004. © 2004 C ALIFORNIA H EALTH C ARE F OUNDATION 16 Health Benefits Survey CONTENTS 6. Increases in Premiums Compared Methods to Other Indicators Overview Sample Distribution by Firm Size Availability of Coverage Cost of Health Insurance Benefits and Cost Sharing Enrollment, Choice, and Type 15.8%* Retiree Coverage Employer Attitudes 13.4%* Availability of Coverage 11.4%* Cost of Health Insurance Health Insurance 6.Increases in Premiums Premiums 10.0%* Compared to Other Indicators 7.Change in Premiums 8.Increases in Premiums from Previous Year, by Plan Type 6.7% 9.Average Monthly Premiums 4.8% Overall 10.Average Annual Worker and California Inflation Employer Contributions 4.3% 3.5% 11.Percentage of Premiums 2.8% 2.8% Paid by Workers 2.7% 1.7% 12.Worker Contribution to Premium 13.Employer Share of Premium 1999 2000 2001 2002 2003 2004 Benefits and Cost Sharing Enrollment, Choice, and Type Retiree Coverage *Estimates are statistically different from the previous year. Employer Attitudes Sources: CHCF/HRET California Employer Health Benefits Survey: 2004; Kaiser/HRET California Employer Health Benefits Survey: 1999, 2000, 2001, 2002, 2003; Bureau of Labor Statistics, Consumer Price Index, U.S. City Average of Annual Inflation (April to April) 1999–2004; Bureau of Labor Statistics, Seasonally Adjusted About CHCF and HRET Data from the Current Employment Statistics, 1999–2004. © 2004 C ALIFORNIA H EALTH C ARE F OUNDATION 17 Health Benefits Survey CONTENTS 7. Change in Premiums, Methods by Firm Size, 2004 Overview Sample Distribution by Firm Size Availability of Coverage Cost of Health Insurance Benefits and Cost Sharing All Firms 11.4% Enrollment, Choice, and Type Retiree Coverage 3–9 Workers 10.2% Employer Attitudes Availability of Coverage 10–49 Workers 12.0% Cost of Health Insurance 6.Increases in Premiums 50–199 Workers 10.0% Compared to Other Indicators 7.Change in Premiums All Small 8.Increases in Premiums from (3–199 Workers) 10.9% Previous Year, by Plan Type 9.Average Monthly Premiums 200–999 Workers 10.6% 10.Average Annual Worker and Employer Contributions 1,000+ Workers 11.9% 11.Percentage of Premiums Paid by Workers All Large 12.Worker Contribution to Premium (200+ Workers) 11.6% 13.Employer Share of Premium Benefits and Cost Sharing Enrollment, Choice, and Type Retiree Coverage Employer Attitudes Note: Tests found no statistical difference between estimates for individual firm sizes and those for All Firms. About CHCF and HRET Source: CHCF/HRET 2004 California Employer Health Benefits Survey © 2004 C ALIFORNIA H EALTH C ARE F OUNDATION 18 Health Benefits Survey CONTENTS 8. Increases in Premiums from Methods Previous Year by Plan Type Overview Sample Distribution by Firm Size Availability of Coverage 6.3% 2000 Cost of Health Insurance 10.0%* 2001 Benefits and Cost Sharing 13.4%* 2002 All Plans Enrollment, Choice, and Type 2003 15.8%* Retiree Coverage 2004 11.4%* Employer Attitudes 6.5% Availability of Coverage 9.3%* Cost of Health Insurance HMO 13.0%* 6.Increases in Premiums Compared to Other Indicators 15.6%* 7.Change in Premiums 12.3%* 8.Increases in Premiums from Previous Year, by Plan Type 6.6% 9.Average Monthly Premiums 9.9%* 10.Average Annual Worker and PPO 13.7%* Employer Contributions 15.8% 11.Percentage of Premiums 10.6%* Paid by Workers 12.Worker Contribution to Premium 7.6% 13.Employer Share of Premium 12.0%* Benefits and Cost Sharing POS 13.8% 16.6% Enrollment, Choice, and Type 10.1%* Retiree Coverage Employer Attitudes *Estimates are statistically different from the previous year. Note: Data on premium increases reflect the cost of health insurance premiums for a family of four. About CHCF and HRET Sources: CHCF/HRET California Employer Health Benefits Survey: 2004; Kaiser/HRET California Employer Health Benefits Survey: 2000, 2001, 2002, 2003 © 2004 C ALIFORNIA H EALTH C ARE F OUNDATION 19 Health Benefits Survey CONTENTS 9. Average Monthly Premiums, Methods by Plan Type, 2004 Overview Sample Distribution by Firm Size Availability of Coverage Cost of Health Insurance Family Benefits and Cost Sharing $981 Enrollment, Choice, and Type Retiree Coverage California U.S. $874 $851 Employer Attitudes $834 $829 $818 $792 Availability of Coverage $721 Cost of Health Insurance 6.Increases in Premiums Compared to Other Indicators 7.Change in Premiums 8.Increases in Premiums from Single Previous Year, by Plan Type 9.Average Monthly Premiums $374 10.Average Annual Worker and Employer Contributions $307 $308 $317 $288 $300 $302 11.Percentage of Premiums $261 Paid by Workers 12.Worker Contribution to Premium 13.Employer Share of Premium Benefits and Cost Sharing Enrollment, Choice, and Type All Plans HMO PPO POS All Plans HMO PPO POS Retiree Coverage Employer Attitudes Note: Estimates for HMOs and PPOs are statistically different from All Plans, for both Single and Family coverage. About CHCF and HRET Source: CHCF/HRET California Employer Health Benefits Survey: 2004; Kaiser/HRET Survey of Employer-Sponsored Health Benefits: 2004 © 2004 C ALIFORNIA H EALTH C ARE F OUNDATION 20 Health Benefits Survey CONTENTS 10. Average Annual Worker and Methods Employer Contributions Overview Sample Distribution by Firm Size Availability of Coverage California Cost of Health Insurance Worker Contribution Employer Contribution Benefits and Cost Sharing Enrollment, Choice, and Type Single Retiree Coverage 2003 $418 $2,683 $3,101 Employer Attitudes 2004 $474 $3,211 $3,685 Availability of Coverage Family Cost of Health Insurance 6.Increases in Premiums 2003 $2,452 $6,052 $8,504 Compared to Other Indicators 7.Change in Premiums 2004 $2,580 $7,433 $10,013 8.Increases in Premiums from Previous Year, by Plan Type U.S. 9.Average Monthly Premiums Worker Contribution Employer Contribution 10.Average Annual Worker and Employer Contributions Single 11.Percentage of Premiums Paid by Workers 2003 $508 $2,875 $3,383 12.Worker Contribution to Premium 2004 $558 $3,137 $3,695 13.Employer Share of Premium Family Benefits and Cost Sharing 2003 $2,412 $6,656 $9,068 Enrollment, Choice, and Type 2004 $2,661 $7,289 $9,950 Retiree Coverage Employer Attitudes Sources: CHCF/HRET California Employer Health Benefits Survey: 2004; Kaiser/HRET California Employer Health Benefits Survey: 2003; About CHCF and HRET Kaiser/HRET Employer Health Benefits Survey: 2003, 2004 © 2004 C ALIFORNIA H EALTH C ARE F OUNDATION 21 Health Benefits Survey CONTENTS 11. Percentage of Premiums Paid Methods by Workers Overview Sample Distribution by Firm Size Availability of Coverage California Cost of Health Insurance 10% 2000 Benefits and Cost Sharing 10% 2001 2002 Enrollment, Choice, and Type Single 13% 2003 Retiree Coverage 14% 2004 Employer Attitudes 13% Availability of Coverage 23% 25% Cost of Health Insurance Family 26% 6.Increases in Premiums 30%* Compared to Other Indicators 27% 7.Change in Premiums 8.Increases in Premiums from Previous Year, by Plan Type U.S. 9.Average Monthly Premiums 14% 10.Average Annual Worker and 14% Employer Contributions Single 16% 11.Percentage of Premiums 16% Paid by Workers 16% 12.Worker Contribution to Premium 13.Employer Share of Premium 26% 26% Benefits and Cost Sharing Family 28% Enrollment, Choice, and Type 27% 28% Retiree Coverage Employer Attitudes *Estimate is statistically different from previous year. Sources: CHCF/HRET California Employer Health Benefits Survey: 2004; Kaiser/HRET California Employer Health Benefits Survey: 2000, 2001, 2002, 2003; About CHCF and HRET Kaiser/HRET Employer Health Benefits Survey: 2000, 2001, 2002, 2003, 2004 © 2004 C ALIFORNIA H EALTH C ARE F OUNDATION 22 Health Benefits Survey CONTENTS 12. Worker Contribution to Monthly Methods Premium, by Firm Size, 2004 Overview Sample Distribution by Firm Size Availability of Coverage Cost of Health Insurance Benefits and Cost Sharing No Contribution $1–30 $31–60 $61+ Enrollment, Choice, and Type Retiree Coverage Single Employer Attitudes All Firms 30% 20% 28% 22% Availability of Coverage Cost of Health Insurance Large Firms 25% 26% 30% 19% 6.Increases in Premiums Compared to Other Indicators Small Firms 39% 10% 25% 26% 7.Change in Premiums 8.Increases in Premiums from Previous Year, by Plan Type No Contribution $1–180 $181–360 $361+ 9.Average Monthly Premiums 10.Average Annual Worker and Family Employer Contributions 11.Percentage of Premiums All Firms 15% 34% 33% 18% Paid by Workers 12.Worker Contribution to Premium Large Firms 19% 43% 29% 9% 13.Employer Share of Premium Small Firms 9% 20% 40% 31% Benefits and Cost Sharing Enrollment, Choice, and Type Retiree Coverage Employer Attitudes About CHCF and HRET Sources: CHCF/HRET California Employer Health Benefits Survey: 2004 © 2004 C ALIFORNIA H EALTH C ARE F OUNDATION 23 Health Benefits Survey CONTENTS 13. Employer Share of Premium, Methods by Firm Size, 2004 Overview Sample Distribution by Firm Size Availability of Coverage Cost of Health Insurance Benefits and Cost Sharing 0–49% 50–74% 75–99% 100% Enrollment, Choice, and Type Retiree Coverage Single Employer Attitudes All Firms 3% 14% 52% 30% Availability of Coverage Cost of Health Insurance Large Firms 2% 12% 61% 25% 6.Increases in Premiums Compared to Other Indicators Small Firms 6% 16% 40% 39% 7.Change in Premiums 8.Increases in Premiums from Previous Year, by Plan Type Family 9.Average Monthly Premiums All Firms 15% 31% 38% 15% 10.Average Annual Worker and Employer Contributions Large Firms 8% 21% 52% 19% 11.Percentage of Premiums Paid by Workers 26% 47% 18% 9% 12.Worker Contribution to Premium Small Firms 13.Employer Share of Premium Benefits and Cost Sharing Enrollment, Choice, and Type Retiree Coverage Employer Attitudes Note: Numbers may not add up to 100% due to rounding. About CHCF and HRET Sources: CHCF/HRET California Employer Health Benefits Survey: 2004; Kaiser/HRET Employer Health Benefits Survey: 2004 © 2004 C ALIFORNIA H EALTH C ARE F OUNDATION 24 Health Benefits Survey CONTENTS 14. HMO Enrollees with Specified Methods Copayments per Office Visit Overview Sample Distribution by Firm Size Availability of Coverage 30% 2001 Cost of Health Insurance 14%* 2002 Benefits and Cost Sharing $5 per Visit 2003 11% Enrollment, Choice, and Type 2004 7% Retiree Coverage Employer Attitudes 42% Availability of Coverage 48% $10 per Visit 40% Cost of Health Insurance 44% Benefits and Cost Sharing 14.HMO Enrollees with Specified 15% Copayments per Office Visit 25%* 15.Workers with Out-of-Pocket $15 per Visit 24% Limits for Single Coverage 27% 16.Covered Workers with Select Hospital Cost Sharing Types 3% 17.Workers Facing Cost Sharing Formulas for Prescription Drugs 6% $20 per Visit 18.Average Prescription Drug 16%* Copayments, by Drug Type 14% 19.Firms Offering Employees a High- deductible Plan, by Firm Size 10% 7% Enrollment, Choice, and Type Other 8% Retiree Coverage 8% Employer Attitudes About CHCF and HRET *Estimate is statistically different from previous year. Source: CHCF/HRET 2004 California Employer Health Benefits Survey © 2004 C ALIFORNIA H EALTH C ARE F OUNDATION 25 Health Benefits Survey CONTENTS 15. Workers with Out-of-Pocket Methods Limits for Single Coverage, 2004 Overview Sample Distribution by Firm Size Availability of Coverage Cost of Health Insurance Annual Out-of-Pocket Limits Benefits and Cost Sharing < $1,000 $1,000–1,999 $2,000–2,999 $3,000 + No Limit Enrollment, Choice, and Type Retiree Coverage Employer Attitudes Small Firms (3–199 Workers) Availability of Coverage All Plans 4% 40% 34% 15% 18% Cost of Health Insurance HMO 2% 45% 16% 10% 28% Benefits and Cost Sharing PPO 7% 31% 29% 23% 9% 14.HMO Enrollees with Specified Copayments per Office Visit POS 8% 34% 25% 26% 6% 15.Workers with Out-of-Pocket Limits for Single Coverage 16.Covered Workers with Select Hospital Cost Sharing Types Large Firms (200 + Workers) 17.Workers Facing Cost Sharing All Plans 25% 32% 8% 8% 27% Formulas for Prescription Drugs 18.Average Prescription Drug HMO 10% 48% 5% 2% 35% Copayments, by Drug Type PPO 33% 31% 12% 18% 6% 19.Firms Offering Employees a High- deductible Plan, by Firm Size POS 12% 20% 9% 14% 46% Enrollment, Choice, and Type Retiree Coverage Employer Attitudes About CHCF and HRET Notes: Numbers may not add up to 100% due to rounding. $3,000+ includes any fixed out-of-pocket cost above that amount. No Limit indicates no limit on out-of-pocket costs. Source: CHCF/HRET 2004 California Employer Health Benefits Survey © 2004 C ALIFORNIA H EALTH C ARE F OUNDATION 26 Health Benefits Survey CONTENTS 16. Covered Workers with Select Methods Hospital Cost Sharing Types, Overview Sample Distribution by Firm Size by Plan Type, 2004 Availability of Coverage Cost of Health Insurance Benefits and Cost Sharing Enrollment, Choice, and Type Deductible Retiree Coverage or Copay Charge Annual PLAN per Admission Coinsurance Both per Day Deductible None Employer Attitudes Availability of Coverage HMO 38% 2% 0% 2% 0% 58% Cost of Health Insurance PPO 32% 17% 5% 0% 1% 46% Benefits and Cost Sharing 14.HMO Enrollees with Specified POS 25% 6% 3% 1% 1% 65% Copayments per Office Visit 15.Workers with Out-of-Pocket Limits for Single Coverage All Plans 38% 8% 2% 1% 0% 51% 16.Covered Workers with Select Hospital Cost Sharing Types Among workers with a deductible or copay, the average across all plans is $209. 17.Workers Facing Cost Sharing Formulas for Prescription Drugs Among workers with coinsurance, the average across all plans is 16%. 18.Average Prescription Drug Copayments, by Drug Type 19.Firms Offering Employees a High- deductible Plan, by Firm Size Enrollment, Choice, and Type Retiree Coverage Employer Attitudes About CHCF and HRET Source: CHCF/HRET 2004 California Employer Health Benefits Survey © 2004 C ALIFORNIA H EALTH C ARE F OUNDATION 27 Health Benefits Survey CONTENTS 17. Workers Facing Cost Sharing Methods Formulas for Prescription Drugs Overview Sample Distribution by Firm Size Availability of Coverage Cost of Health Insurance Cost Sharing Formula Benefits and Cost Sharing Cost sharing the same regardless of drug type Enrollment, Choice, and Type Two Tier: One payment for generic drugs and one for name brand Retiree Coverage Three Tier: One payment for generic drugs, another for preferred drugs, Employer Attitudes and a third for non-preferred drugs Availability of Coverage Four Tier: Three tier plus a fourth tier for lifestyle or other specified drug Cost of Health Insurance Other Benefits and Cost Sharing California 14.HMO Enrollees with Specified Copayments per Office Visit 2003 20% 38% 42% 1% 15.Workers with Out-of-Pocket Limits for Single Coverage 2004 11% 34% 46% 1, 7% 16.Covered Workers with Select Hospital Cost Sharing Types U.S. 17.Workers Facing Cost Sharing Formulas for Prescription Drugs 2003 13% 23% 63% 2% 18.Average Prescription Drug Copayments, by Drug Type 2004 10% 20% 65% 3, 1% 19.Firms Offering Employees a High- deductible Plan, by Firm Size Enrollment, Choice, and Type Retiree Coverage Employer Attitudes Note: Numbers may not add up to 100% due to rounding. About CHCF and HRET Sources: CHCF/HRET California Employer Health Benefits Survey: 2004; Kaiser/HRET California Employer Health Benefits Survey: 2003; Kaiser/HRET Employer Health Benefits Survey: 2003, 2004 © 2004 C ALIFORNIA H EALTH C ARE F OUNDATION 28 Health Benefits Survey CONTENTS 18. Average Prescription Drug Methods Copayments, by Drug Type Overview Sample Distribution by Firm Size Availability of Coverage Cost of Health Insurance 2001 Benefits and Cost Sharing $7.42 2002 Enrollment, Choice, and Type $8.13 Retiree Coverage Generic 2003 Employer Attitudes $8.97* 2004 Availability of Coverage $9.41 Cost of Health Insurance Benefits and Cost Sharing $12.53 14.HMO Enrollees with Specified Copayments per Office Visit $14.10* 15.Workers with Out-of-Pocket Preferred Limits for Single Coverage $16.71* 16.Covered Workers with Select Hospital Cost Sharing Types $18.36* 17.Workers Facing Cost Sharing Formulas for Prescription Drugs $14.82 18.Average Prescription Drug Copayments, by Drug Type $19.01* 19.Firms Offering Employees a High- Non-Preferred deductible Plan, by Firm Size $22.49* Enrollment, Choice, and Type $25.90* Retiree Coverage Employer Attitudes About CHCF and HRET *Estimate is statistically different from previous year. Sources: CHCF/HRET California Employer Health Benefits Survey: 2004; Kaiser/HRET California Employer Health Benefits Survey: 2001, 2002, 2003 © 2004 C ALIFORNIA H EALTH C ARE F OUNDATION 29 Health Benefits Survey CONTENTS 19. Firms Offering Employees a High- Methods deductible Plan* by Firm Size Overview Sample Distribution by Firm Size Availability of Coverage Cost of Health Insurance High Deductible Plan High Deductible Plan with an HRA** Benefits and Cost Sharing Enrollment, Choice, and Type Retiree Coverage 18% 18% Employer Attitudes Availability of Coverage Cost of Health Insurance Benefits and Cost Sharing 14.HMO Enrollees with Specified Copayments per Office Visit 15.Workers with Out-of-Pocket Limits for Single Coverage 16.Covered Workers with Select 8% Hospital Cost Sharing Types 17.Workers Facing Cost Sharing Formulas for Prescription Drugs 18.Average Prescription Drug Copayments, by Drug Type 19.Firms Offering Employees a High- deductible Plan, by Firm Size 2% 1% 1% Enrollment, Choice, and Type All Firms Small Firms Large Firms (3–199 Workers) (200+ Workers) Retiree Coverage Employer Attitudes *Defined as having a deductible greater than $1,000 for single coverage. **Health Reimbursement Arrangement About CHCF and HRET Note: Tests found no statistical difference between estimates for individual firm sizes and those for All Firms. Sources: CHCF/HRET California Employer Health Benefits Survey: 2004. © 2004 C ALIFORNIA H EALTH C ARE F OUNDATION 30 Health Benefits Survey CONTENTS 20. Health Plan Enrollments for Methods Covered Workers, by Plan Type Overview Sample Distribution by Firm Size Availability of Coverage Cost of Health Insurance Conventional HMO PPO POS Benefits and Cost Sharing Enrollment, Choice, and Type California Retiree Coverage Employer Attitudes 2001 ** 54% 25% 21% Availability of Coverage 2002* 1% 54% 30% 16% Cost of Health Insurance 2003 1% 52% 29% 17% Benefits and Cost Sharing 2004* 1% 50% 36% 12% Enrollment, Choice, and Type 20.Health Plan Enrollments for Covered Workers, by Plan Type U.S. 21.Covered Workers with a Choice 2001 7% 24% 46% 23% of Health Plans, by Firm Size 22.Employees in Partly or Entirely 2002* 4% 27% 52% 18% Self-insured Plans, by Plan Type 2003* 5% 24% 54% 17% Retiree Coverage Employer Attitudes 2004 5% 25% 55% 15% About CHCF and HRET *Distribution is statistically different from previous year. **California conventional plan enrollment in 2001 was less than 1%. Note: Numbers may not add up to 100% due to rounding. Sources: CHCF/HRET California Employer Health Benefits Survey: 2004; Kaiser/HRET California Employer Health Benefits Survey: 2001, 2002, 2003; Kaiser/HRET Employer Health Benefits Survey: 2001, 2002, 2003, 2004 © 2004 C ALIFORNIA H EALTH C ARE F OUNDATION 31 Health Benefits Survey CONTENTS 21. Covered Workers with a Choice of Methods Health Plans, by Firm Size, 2004 Overview Sample Distribution by Firm Size Availability of Coverage Cost of Health Insurance California U.S. Benefits and Cost Sharing Enrollment, Choice, and Type Retiree Coverage Employer Attitudes 93% Availability of Coverage 82% 82% Cost of Health Insurance Benefits and Cost Sharing Enrollment, Choice, and Type 65% 64% 20.Health Plan Enrollments for Covered Workers, by Plan Type 21.Covered Workers with a Choice of Health Plans, by Firm Size 22.Employees in Partly or Entirely Self-insured Plans, by Plan Type Retiree Coverage 27% Employer Attitudes About CHCF and HRET All Firms Small Firms Large Firms (3–199 Workers) (200+ Workers) Note: Individual firm size estimates are statistically different from All Firms. Sources: CHCF/HRET 2004 California Employer Health Benefits Survey; Kaiser/HRET Survey of Employer-Sponsored Health Benefits: 2004 © 2004 C ALIFORNIA H EALTH C ARE F OUNDATION 32 Health Benefits Survey CONTENTS 22. Employees in Partly or Entirely Methods Self-insured Plans, 2004 Overview Sample Distribution by Firm Size Availability of Coverage Cost of Health Insurance Benefits and Cost Sharing California U.S. Enrollment, Choice, and Type Retiree Coverage Employer Attitudes 64% Availability of Coverage 58% Cost of Health Insurance 54% Benefits and Cost Sharing 46% Enrollment, Choice, and Type 43% 20.Health Plan Enrollments for Covered Workers, by Plan Type 21.Covered Workers with a Choice 31% of Health Plans, by Firm Size 29% 22.Employees in Partly or Entirely Self-insured Plans, by Plan Type 20% Retiree Coverage Employer Attitudes 9% NSD About CHCF and HRET All Plans* Conventional HMO* PPO POS* *Estimate is statistically different between California and the U.S. Notes: There are not enough employees enrolled in conventional plans in California to break out enrollment by self-insured plans (NSD=not sufficient data). Self-insured plans are plans where an employer assumes responsibility for paying health care claims rather than buying coverage from an insurer. Sources: CHCF/HRET 2004 California Employer Health Benefits Survey; Kaiser/HRET Survey of Employer-Sponsored Health Benefits: 2004 © 2004 C ALIFORNIA H EALTH C ARE F OUNDATION 33 Health Benefits Survey CONTENTS 23. Firms that Offer Retiree Benefits Methods Overview Sample Distribution by Firm Size Small Firms (3–199 Workers) Availability of Coverage 3% 2001 Cost of Health Insurance 5% 2002 Benefits and Cost Sharing CA 8% 2003 Enrollment, Choice, and Type 2% 2004 Retiree Coverage Employer Attitudes 4% Availability of Coverage 5% U.S. Cost of Health Insurance 10% Benefits and Cost Sharing 5% Enrollment, Choice, and Type Large Firms (200+ Workers) Retiree Coverage 23.Firms that Offer Retiree Benefits 36% Employer Attitudes 37% CA About CHCF and HRET 39% 35% 37% 36% U.S. 38% 36% Sources: CHCF/HRET California Employer Health Benefits Survey: 2004; Kaiser/HRET California Employer Health Benefits Survey: 2001, 2002, 2003; Kaiser/HRET Survey of Employer-Sponsored Health Benefits: 2001, 2002, 2003, 2004 © 2004 C ALIFORNIA H EALTH C ARE F OUNDATION 34 Health Benefits Survey CONTENTS 24. Likelihood of Large Employers Methods Making Select Changes in 2005 Overview Sample Distribution by Firm Size Availability of Coverage Cost of Health Insurance Very Somewhat Not Too Not at All Don’t Benefits and Cost Sharing Likely Likely Likely Likely Know Enrollment, Choice, and Type Retiree Coverage Increase Employee Employer Attitudes Cost for… Availability of Coverage • Premium 44% 33% 12% 11% 1% Cost of Health Insurance Benefits and Cost Sharing • Coinsurance or Copay 11% 42% 26% 19% 1% Enrollment, Choice, and Type Retiree Coverage • Prescription 15% 42% 24% 17% 1% Drugs Employer Attitudes 24.Likelihood of Large Employers Making Select Changes in 2005 • Deductibles 15% 42% 20% 22% 2% 25.Firms Likely to Begin Offering a High-deductible Plan with HRA Restrict Employee in the Next Two Years Eligibility 3, 7% 34% 57% 1% 26.Firms that Shopped for a New Plan, Changed Types or Carriers Drop Coverage 27.Opinions on Effectiveness of Entirely 1, 8% 91% Cost Containment Strategies 28.Firms That Use Select Contribution Incentives About CHCF and HRET Notes: Less than 1% of Large Firms reported that they were “Very Likely” to Drop Coverage Entirely. Numbers may not add up to 100% due to rounding. Source: CHCF/HRET California Employer Health Benefits Survey: 2004 © 2004 C ALIFORNIA H EALTH C ARE F OUNDATION 35 Health Benefits Survey CONTENTS 25. Firms Likely to Begin Offering a Methods High-deductible Plan* with HRA Overview Sample Distribution by Firm Size in the Next Two Years Availability of Coverage Cost of Health Insurance Benefits and Cost Sharing Very Likely Enrollment, Choice, and Type Retiree Coverage Somewhat Likely 20% Employer Attitudes Availability of Coverage Cost of Health Insurance Benefits and Cost Sharing Enrollment, Choice, and Type 12% Retiree Coverage 5% Employer Attitudes 24.Likelihood of Large Employers Making Select Changes in 2005 12% 25.Firms Likely to Begin Offering a High-deductible Plan with HRA in the Next Two Years 8% 26.Firms that Shopped for a New Plan, Changed Types or Carriers 6% 27.Opinions on Effectiveness of Cost Containment Strategies 28.Firms That Use Select All Firms Small Firms Large Firms Contribution Incentives (3–199 Workers) (200 + Workers) About CHCF and HRET *Defined as having a deductible greater than $1,000 for single coverage. Source: CHCF/HRET 2004 California Employer Health Benefits Survey © 2004 C ALIFORNIA H EALTH C ARE F OUNDATION 36 Health Benefits Survey CONTENTS 26. Firms that Shopped for a New Methods Plan, Changed Type or Carrier Overview Sample Distribution by Firm Size Availability of Coverage Cost of Health Insurance Shopped for Among Shoppers, Among Shoppers, Benefits and Cost Sharing New Plan Changed Plan Type Changed Carrier Enrollment, Choice, and Type Retiree Coverage 53% Employer Attitudes Availability of Coverage 45% 45% 44% Cost of Health Insurance Benefits and Cost Sharing Enrollment, Choice, and Type Retiree Coverage 30% Employer Attitudes 24.Likelihood of Large Employers 24% 24% 22% 22% Making Select Changes in 2005 19% 25.Firms Likely to Begin Offering a 17% High-deductible Plan with HRA in the Next Two Years 14% 26.Firms that Shopped for a New Plan, Changed Types or Carriers 27.Opinions on Effectiveness of Cost Containment Strategies 28.Firms That Use Select All Firms Small Firms Midsize Firms Large Firms Contribution Incentives (3–199 Workers) (200–999 Workers) (1,000–4,999 Workers) About CHCF and HRET Note: Tests found no statistical difference between estimates for individual firm sizes and those for All Firms. Source: CHCF/HRET 2004 California Employer Health Benefits Survey © 2004 C ALIFORNIA H EALTH C ARE F OUNDATION 37 Health Benefits Survey CONTENTS 27. Opinions on Effectiveness of Methods Cost Containment Strategies, 2004 Overview Sample Distribution by Firm Size Availability of Coverage Effectiveness Cost of Health Insurance Very Somewhat Not Too Not at All Don’t Know Benefits and Cost Sharing Enrollment, Choice, and Type Disease Management Retiree Coverage Employer Attitudes 2003 20% 51% 13% 6% 10% Availability of Coverage 2004 13% 38% 15% 18% 15% Cost of Health Insurance Higher Employee Cost Sharing Benefits and Cost Sharing 19% 43% 19% 14% 5% Enrollment, Choice, and Type 2003 Retiree Coverage 2004 15% 29% 22% 25% 9% Employer Attitudes 24.Likelihood of Large Employers Consumer Driven Health Plans* Making Select Changes in 2005 2003 20% 48% 15% 7% 9% 25.Firms Likely to Begin Offering a High-deductible Plan with HRA in the Next Two Years 2004 8% 39% 16% 17% 20% 26.Firms that Shopped for a New Plan, Changed Types or Carriers Tighter Managed Care Networks 27.Opinions on Effectiveness of Cost Containment Strategies 2003 5% 47% 25% 15% 8% 28.Firms That Use Select Contribution Incentives 2004 14% 29% 25% 11% 21% About CHCF and HRET *For example, a high-deductible plan with an HRA. Source: CHCF/HRET 2004 California Employer Health Benefits Survey © 2004 C ALIFORNIA H EALTH C ARE F OUNDATION 38 Health Benefits Survey CONTENTS 28. Firms That Use Select Methods Contribution Incentives, 2004 Overview Sample Distribution by Firm Size Availability of Coverage Cost of Health Insurance Benefits and Cost Sharing Enrollment, Choice, and Type Vary Contribution for Family Coverage Based on Whether an Employee's Retiree Coverage 13% Employer Attitudes Family Member Has the Option of Obtaining Coverage Elsewhere Availability of Coverage Cost of Health Insurance Benefits and Cost Sharing Provide Additional Compensation or Enrollment, Choice, and Type Benefits to Employees if They Elect Not 12% Retiree Coverage to Participate in Firm's Health Benefits Employer Attitudes 24.Likelihood of Large Employers Making Select Changes in 2005 25.Firms Likely to Begin Offering a Provide Additional Compensation or High-deductible Plan with HRA Benefits to Employees if They Elect 3% in the Next Two Years Single Coverage Rather Than 26.Firms that Shopped for a New Family Coverage Plan, Changed Types or Carriers 27.Opinions on Effectiveness of Cost Containment Strategies 28.Firms That Use Select Contribution Incentives About CHCF and HRET Source: CHCF/HRET 2004 California Employer Health Benefits Survey © 2004 C ALIFORNIA H EALTH C ARE F OUNDATION 39 Health Benefits Survey CONTENTS About the Foundation About HRET Methods The California HealthCare Foundation, based in The Health Research and Educational Trust (HRET) Overview Oakland, is an independent philanthropy committed is a private, not-for-profit organization involved in Availability of Coverage to improving California’s health care delivery and research, education, and demonstration programs financing systems. Formed in 1996, our goal is to addressing health management and policy issues. Cost of Health Insurance ensure that all Californians have access to afford- Founded in 1944, HRET collaborates with health care, Benefits and Cost Sharing able, quality healthcare. government, academic, business, and community Enrollment, Choice, and Type organizations across the United States to conduct For more information about CHCF, visit us online at Retiree Coverage research and disseminate findings that help shape www.chcf.org. Employer Attitudes the future of health care. About CHCF and HRET More information about the trust can be found at www.hospitalconnect.com/hret/about. © 2004 C ALIFORNIA H EALTH C ARE F OUNDATION 40