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Converging complex forces are influencing employers to rethink their health care strategies and tactics to achieve a high-performance benefit portfolio. Employers are making sure their health plans are aligned, affordable, efficient and engaging.

Employers

Cost

m

anag

emen

t

Changing

employee value

proposition

Technology

andengagement

Health caretransformation

Generational

shifts

Workforce

health

Legi

slat

ive

unce

rtai

nty

Align plans with broader goals and needs

of employers report health care benefits will be a key part of their total rewards package and employee value proposition in 2015.

of employers expect to make changes for full-time active

employee plans.

of employers expect to make changes for part-time

employee plans.

Align programs with business objectives, competitive needs and federal health

reform regulation.

81%

68%

87%87%

81%

68%

87%

69% 81%

68%

87%

81%

4% after changes

Make plans affordable for the business and employee

5.2% without changes

2015 health care costs are projected to increase. Without changes to medical and pharmacy plan designs, vendors, provider networks or other features, the increase would have been more.

73% are concerned they will trigger the excise tax if they maintain the plan designs currently offered.

The 2018 excise tax on high-cost health plans adds to the cost pressures, with companies noting that making changes to avoid this business risk is the top priority.

of CEOs and CFOs are more involved in decision making than three to five years ago.

Escalating costs make health care strategy a business imperative top executives cannot ignore.

2/3

Employers’ share$10,233

Employees’ share$2,804

Total per-employee costs are expected to average$13,037 =

Projected increase

Plan year 2015

Plan year2016

24%14%66% of employers will adopt eligibility and/or utilization restrictions by 2015 to improve plan efficiency and achieve greater value in cost and treatment effectiveness. 58% will evaluate specialty pharmacy spend within the medical benefit by 2015.

Employer confidence builds in private exchanges as a viable alternative for company-sponsored coverage.

Exchange-Based Benefits

By 2017, 63% of companies expect to use spousal exclusions or surcharges when a spouse can obtain health coverage elsewhere, and 52% are considering making a significant reduction in employer subsidies for employees’ family members.

Spouse and Dependent Subsidies Value-Based Payment Methods

Specialty Pharmacy Strategy

Leverage efficient strategies and tactics

29% of employers want to work with health plan partners that use value-based payment methods focused on efficiency, quality and outcomes rather than reimbursing providers for each unit of service.

16% of plan sponsors expect to use a DC approach by 2015.

Another 30% are considering this solution for 2016 or 2017.

76%56%

54%

activity tracking

health care delivery

price/quality transparency tools

Engage employees in accountability for their own health

49% of companies expect to offer an ABHP as their only plan option by 2017.

Account-Based Health Plans (ABHPs)

Defined Contribution (DC)

Implementation of telemedicine is expected to reach 37% by 2015 with another 34% considering the option by 2017.

Technology

Companies are exploring mobile apps and fitness wearables for three primary uses:

Employer interest

in telemedicine is growing, and implementation is expected to reach 37% by 2015, with another 34% considering the option by 2017.

About the SurveyTowers Watson’s 2014 Health Care Changes Ahead Survey was completed online by 379 employee benefit professionals from midsize to large companies across a variety of industries.

Insights From the 2014 Health Care Changes Ahead Survey

Optimizing Employers’

Health Program Performance