The health and wellness of a company's employees is the greatest indicator of health care costs, not the actual cost of the health insurance plan itself. And regardless of the size of the company or the insurance plan, health insurance premiums cost an average of 10.1 percent of payroll. These data are according to a new survey released by the Vermont Business Roundtable.
The chief executives of Vermont’s leading businesses conducted a survey to gather relevant information regarding health care benefits and costs in order to contribute meaningfully to the current discussion around reform measures. The Vermont Business Roundtable engaged Public Assets Institute to assist with the development of the survey and the analysis and reporting of the results. The survey, which was completed between October and December 2011 and enjoyed a response rate of 80 percent, was released today by Vermont Business Roundtable Chair Steve Voigt, CEO, King Arthur Flour and President Lisa Ventriss.
According to Roundtable President, Lisa Ventriss, ‘This survey is important because for the first time we now have a baseline of data from an important segment of Vermont employers, including some of the state’s largest and most iconic private and not-for-profit sector companies, which can be used to evaluate the impacts of various health care reform proposals as they emerge over the coming months and years. The findings should be of much interest to policymakers throughout Vermont.’
Chair Steve Voigt said ‘Our motivation for conducting the survey was to help our CEO members understand if forthcoming reform proposals were going to be additive or detrimental to what are our current policies and practices. Information regarding the amount that member businesses spend on health insurance in total and as a percentage of payroll; the percentage of their employees that are covered; how much employees pay for their coverage; and, the value of the insurance plans that are offered will help us understand those potential impacts.’
Key among the survey findings:
·95 percent of Roundtable members offer either ‘Gold’ or ‘Platinum’ insurance plans, where the employer covers, respectively, at least 80 or 90 percent of the policyholders’ average annual health care expenditures. The weighted average is 92 percent.
·As a group, the participating employers spent roughly $177 million in the most recent fiscal year on health insurance premiums; representing a median employer cost of 10.1 percent of payroll, regardless of size.
·Results showed that while both enrollment and richness of plans correlate to costs, they are in fact weak predictors of costs. The health and wellness of the employees is the strongest indicator of costs.
The complete report and copy of the questionnaire may be found on the Roundtable’s WEB SITE.
Executive Summary
With an interest in contributing its knowledge, experience, and data to Vermont’s current
discussion about health care reform, the Vermont Business Roundtable (VBR) decided in the fall
of 2011 to survey its members about the coverage and cost of health care insurance plans they
currently offer their employees. The VBR contracted with Public Assets Institute in Montpelier
to collect and analyze data from its members to establish a baseline of what VBR members are
paying for health insurance and what they are getting for their money.
The results of the survey show that VBR members’ costs for health insurance plans vary from
less than 5 percent of payroll to more than 25 percent. However, when looking at the companies
with the majority of the employees, most of them of have health insurance costs that are greater
than 10 percent of payroll. Employees’ share of health insurance costs ranged from nothing to
almost 6 percent of total payroll with 90 percent working for companies where the employees’
cost is more than 2 percent of payroll. Ninety-five percent of VBR members offer either ‘Gold’
or ‘Platinum’ insurance plans’that is, plans where the insurer covers, respectively, at least 80
percent or at least 90 percent of the policy holder’s average annual health care expenditures.
Vermont is still in the early stages of reforming its health care system, so at this point there
is nothing to compare with what VBR members are now paying or with the coverage they
are now providing to their employees. Although legislation was enacted in the spring of 2011
to move Vermont toward a single-payer health care system with universal coverage for all
residents, decisions about how to fund this new system are still a couple of years away. To help
shape those decisions, this VBR study can provide policy makers with real world information
about the cost and quality of health insurance offered by an important segment of Vermont’s
business community.
About 80 percent of VBR members participated in the survey, and almost two-thirds
provided enough detailed information to make comparisons with other companies. The
participants represented a good cross section of the full VBR members in terms of size,
location, and industry.
Survey Results: Opinions
In addition to providing data about the coverage and cost of their health insurance plans, survey
participants answered questions about their views on the current state of health care and health care
reform. Their responses follow:
1. To what extent is it important to your company to provide employee health insurance coverage as a matter ofprinciple or employer philosophy? (81 responses).
a. Most important’34.
b. Very important’36.
c. Important’11.
d. Somewhat important’0
e. Not at all important’0
2. Among all of the benefits your company offers, including wages, how important is health insurance to yourability to recruit and retain employees? (82 responses).
a. Most important’16.
b. Very important’56.
c. Important’8.
d. Somewhat important’2
e. Not at all important’0
3. In deciding to be self-insured, how important were financial considerations? (18 responses).
a. Most important’12.
b. Very important’5.
c. Important’1.
d. Somewhat important’0
e. Not at all important’0
4. In deciding to be self-insured, how important was avoiding state mandates? (16 responses).
a. Most important’1.
b. Very important’1.
c. Important’3.
d. Somewhat important’1
e. Not at all important’10
5. To what extent is the continuing increase in cost of providing employee health care insurance a concern to yourcompany? (81 responses).
a. Major concern’64.
b. Moderate concern’16.
c. Minor concern’1.
d. No concern at all’0
6. Thinking about the state’s long-term health reform efforts and the possibility of having the health caresystem funded in part with a payroll tax, what effect do you think reform will have on where your company willlocate employees in the future? Would you say your company isâ ¦ (83 responses).
a. Much more likely to move employees to offices in other states’5.
b. Somewhat more likely to move employees to offices in other states’6 .
c. No effect either way’30.
d. Somewhat more likely to move employees from offices in other states to Vermont’1.
e. Much more likely to move employees from offices in other states to Vermont’0.
f. N/A: No offices outside of Vermont’30.
g. Not sure’11.
7. In exchange for giving up your current coverage, which of the following options would you support? (Pleasecheck all that apply.) (21 responses).
a. Less expensive than my current plan, less comprehensive benefits’2.
b. Less expensive than my current plan, but comparable or better benefits’16.
c. More expensive than my current plan, but better benefits’3.
d. Other’0.
The Roundtable is a nonprofit, nonpartisan organization of 118 CEOs of Vermont's top private and nonprofit employers, representing geographic diversity and all major sectors of the Vermont economy, with an aggregate, global economic impact of $292 billion, over $1.8 billion in corporate philanthropy, and employing more than 10 percent of the state’s workforce. The Roundtable is committed to sustaining a sound economy and preserving Vermont’s unique quality of life by studying and making recommendations on statewide public policy issues.
Source: VBR 3.19.2012