Benefits plans stable amid health-care turbulence

With the nation's health-care system in legislative flux, employers are maintaining the status quo when it comes to designing employee benefits.

"Very few employers are making major plan changes [for 2010]. That would be premature," said Jennifer Calhoun, a principal in Mercer L.L.C.'s health- and benefits-consulting office in Philadelphia.

Calhoun is one of the analysts involved in the annual survey of national employer-sponsored health plans done by Mercer, a global human-resource consulting company specializing in health and retirement benefits.

"When we are having strategy conversations, they are asking: 'How is [the health overhaul] going to impact my 2011 strategy and beyond?' " she said. "Employers are educating themselves about the key messages" in the bills.

Senate Majority Leader Harry Reid (D., Nev.) has said he wants to begin deliberations on health-care legislation Monday and bring the matter to a vote by the end of December.

Employers can afford a breather as the legislation churns through Congress. Even though the cost of health benefits rose faster than the rate of inflation in 2009, the 5.5 percent year-to-year increase was the smallest in a decade. (In 2002, health-benefit costs rose 14.7 percent in a year, according to Mercer's survey.)

Today, 65 percent of all employers offer health plans, but among large employers, health benefits are nearly universal.

One question outstanding is how the pending legislation will affect employers' willingness to offer health coverage as part of their compensation plans.

Calhoun said some employers had complained, for example, that they are manufacturers, not health insurers.

" 'This isn't my core competency. Why am I focusing on this?' " she said, quoting them.

But the majority of employers still want to stay in the game, Calhoun said, and if the government will give them a tax credit per employee covered, as proposed in some of the legislation, they will be even more committed to providing health coverage.

In the three-state Philadelphia region, she said, employers tend to offer a richer benefits package.

Workers here would prefer to pay more to keep a good plan than to have a lesser plan for less money, according to the Mercer survey.

For example, nationally, large employers offer a median deductible of $400. In Philadelphia, the median is $250.

Health coverage costs more in Philadelphia, an average of $10,723 per employee, compared with $8,945 nationally. The disparity is particularly evident for smaller employers, those with 10 to 499 employees. The average tab is $8,452 nationally, compared to $11,235 in Philadelphia.

Nationally, large employers (500 or more employees) estimated that their 2010 costs would rise 5.6 percent. Large employers in the area predict a cost increase of 7 percent.

Enrollment in health-management plans, or HMOs, is higher here, 27 percent compared with 21 percent nationally, according to the Mercer survey.

Local employers have been slower to impose "consumer-driven health plans," the industry term for high-deductible plans that have grown more popular since 2004.

Enrollment in these plans is about 9 percent nationally; here, it is 7 percent, according to Mercer data. The plans tend to have lower premiums, and sometimes employers help employees cover part of the deductible.

But small employers, among the most likely to offer the high-deductible plans, are also the least likely to contribute toward the deductible, Calhoun said.