EXECUTIVE SUMMARY - "Just In Time Benefits Survey"

Annually we conduct a 62-question survey and distribute it to 39 Human Resources professionals at small (10-20 employees) to large (500+ employees) companies in the greater Philadelphia area. These companies were primarily in the biotechnology and pharmaceutical industry, and the survey focused on their past, present and future employee benefit strategies. A total of 38% (15/39) of the targeted companies responded in part or in full to the survey. Sixty-seven percent identified themselves as medium-size employers (10-100 employees). While the total number of respondents may limit the interpretation of some of the reported differences, clear trends, common strategies and relationships can be identified. A majority of the companies offered their employees choices between HMO, POS (Point of Service) and PPO (Preferred Provider Plan) plans. The most commonly offered plan was a PPO (80%) followed by POS (67%) and HMO (60%). The most common plan in which employees were enrolled was evenly distributed between a PPO and POS plan (46%). Almost all respondents replied that they offer some prescription drug plan and dental plan. While there was a range of employee contributions reported, the most common employee contribution by plan type is 25-30% of premium rate for PPO, 20% for POS and 15-20% for HMO. There appears to be an increase in the employee contribution rate, particularly for PPO plans. The average projected percentage increase for 2007 was 15.4%. The most common tactics to accommodate this increase were to increase employee contributions and co-pays, and offer incentives for employees to use less costly plans. There continues to be considerable heterogeneity in 2006 in the valued-added services (no cost) provided by individual brokers. The most common services provided (>80%) were benefit strategic planning and advocacy of employees for claims. Again, many services some of which may often lead to the cost containment were far less common and were reported by less than 1/3 of the respondents, e.g. premium audits, employee eligibility management, monthly employee meetings, employee satisfaction surveys, benefits website, and on-line enrollment. In addition, only 53% of the respondents indicated that their present broker assists in FSA or Section 125 discrimination testing.

The overall strategies of the respondents in this survey were often as common as they were divergent. Most are moderately satisfied with their existing carriers and brokers. However, there seems to continue to be a diverse set of value added services provided by brokers as reported in this survey, many of which may be helpful in health benefits cost containment. The major strategies that appear to be favored for cost containment in light of the projected 10-20% increase in premiums are to increase employee contributions and co-pays with or without changes in the respective plans.

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