Employers play a significant role in health insurance coverage – providing health benefits to about 158 million nonelderly people in America¹ – so their attitudes, knowledge, and experiences are important factors in health policy discussions.

This year’s survey asked employers how they view different approaches to containing cost increases and how they plan to change their health benefit plans in the near future. Employers also were asked about utilization management programs, how much they feel various factors are contributing to premium increases, whether they offer long-term care insurance, and whether they shopped for (or switched to) a new health plan, among other topics.

• All firms, including both those that offer and do not offer health benefits, were asked to rate how effective several different strategies are in reducing the growth of health care costs. In most instances, the percentages rating any of the suggested strategies as “very effective” at controlling costs are relatively low (between 12% and 28%). Larger percentages of firms (between 39% and 53%) report that each of the approaches we asked about were “somewhat effective” at controlling cost growth.
  
• • The approach perceived to be most effective by both small and large firms is disease management: 28% of small firms (3-199 workers) and 35% of large firms (200 or more workers) believe it to be “very effective” at controlling costs (Exhibit 12.1).
    
    
  • Similar percentages of employers report that tighter managed care networks (16%) and consumer-driven health plans (15%) would be “very effective” in reducing the growth of health care costs. However, more firms indicate that consumer-driven health plans would be “somewhat effective” than tighter managed care networks. Small firms (3-199 workers) are more likely than large firms (200 or more workers) to report tighter managed care networks as being “very effective” at controlling costs (16% vs. 4%) (Exhibit 12.1).
    
    
• Each year we ask employers whether they expect to change the employee premium contributions, cost sharing, or eligibility for health benefits in the next year.
  
• • Thirty-nine percent of large firms (200 or more workers) say that they are “very likely” to increase the amount employees pay for health insurance in the next year, compared to 21% of small firms (3-199 workers) (Exhibit 12.2). An additional 24% of all firms say they are “somewhat likely” to do so.
    
    
  • Relatively small percentages of firms say that they are “very likely” to increase employee cost sharing next year, with 12% saying that they are “very likely” to increase deductibles, 13% saying that they are “very likely” to increase copayments and coinsurance, and 11% saying that they are “very likely” to increase the amount that employees pay for prescription drugs. These responses vary little between small firms (3-199 workers) and large firms (200 or more workers) (Exhibit 12.2).
    
    
  • As observed in previous years, small percentages of employers report that they are likely to restrict eligibility or drop coverage altogether. Less than one percent of firms say that they are “very likely” to restrict eligibility for benefits in the next year. Similarly, about one percent of firms say that they are “very likely” to drop coverage in the next year (Exhibit 12.2).
    
    
• The factor most often cited by firms as contributing “a lot” to higher health insurance premiums is higher spending for prescription drugs (66%), followed by higher spending for hospital care (60%), an aging population (52%), higher spending for physician services (46%), and higher insurance company profits (45%) (Exhibit 12.3).
  
• • Small firms (3-199 workers) are significantly more likely than large firms (200 or more workers) to cite higher insurance company profits, higher spending for hospital care, and higher spending for physician services as contributing “a lot” to higher health insurance premiums (Exhibit 12.3). When those that report “a lot” and “somewhat” are combined, the differences between small and large firms are eliminated, with the exception of those reporting higher insurance company profits.
    
    
• About two-thirds (67%) of firms require pre-admission certification for inpatient hospital care in their health plan with the largest enrollment. Fifty-five percent of firms do so for outpatient surgery, and 48% include case management for large claims in their largest health plan. Large firms (200 or more workers) are significantly more likely than small firms (3-199 workers) to require preadmission certification for inpatient hospital care (78% vs. 66%) and case management for large claims in their health plan with the largest enrollment (82% vs. 46%) (Exhibit 12.4).
  
  

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