Personalized Benefits Statements Best Way to Communicate Employee Health Plans Says New Study
April 12 2005 - 12:00PM
PR Newswire (US)
Personalized Benefits Statements Best Way to Communicate Employee
Health Plans Says New Study BPS&M and Acordia Find Access to
Essential Employee Information, Like Comparative Quality of Care,
Increases with Employers Size and Willingness to Use Internet
CHICAGO, April 12 /PRNewswire-FirstCall/ -- A new national survey,
citing a slowdown in the increase of healthcare costs (down to less
than 12 percent in 2004, from 15 percent in 2003), also named key
information like real costs, quality of care, and communication
tools as factors that determine employees' comprehension of their
healthcare benefits. The study, "2005 Trends in Employer Sponsored
Health Benefits Survey Analysis," attributes the slowdown in costs
to a combination of factors such as cost saving measures and market
response after years of rapidly increasing prices. It also found
that personalized benefits statements contributed greatly to
employee comprehension of their plans. The survey was conducted by
Wells Fargo companies Acordia, Inc and Bryan, Pendleton, Swats
& McAllister (BPS&M, a Wells Fargo Institutional Trust's
benefits consulting group). "It's clear our respondents are using
cost-containment strategies to meet today's challenges, but do so
more now by shifting to higher copays, coinsurance, and
out-of-pocket user costs," said Dennis Donahue, Acordia's national
benefits practice leader. "Respondents also appear cautious about
adopting Consumer Driven Health Plans (CDHPs), citing issues
ranging from the complexity of communicating the plans, the lack of
attractive pricing, and the concerns about their own HRIS
capabilities. However, interest is certainly gaining momentum." The
study concludes that if employers hope to create informed
healthcare consumers, they must show employees what healthcare
benefits really cost, information on the quality of healthcare
providers, and the tools needed to make wise healthcare buying
decisions. Key findings include: Communication Methods -- How
employers communicate about healthcare plans influences how well
employees understand the true cost of their benefits. Meetings were
given the highest value ranking as a communication method among
employers. "The Internet is a good resource for information but
nothing is more effective than employee meetings for effective
health plan enrollment," said Donahue. "During the enrollment
process, employees benefit most by receiving initial information on
the Internet, but they need the personal touch through group or
person-to-person meetings to ensure that they understand their
benefits." The study found, however, that employees better
understood the value of their benefits when their employer used
personalized benefits statements or the Internet as the primary
means of communicating with employees. Personalized benefits
statements may well be the best way to help employees understand
the dollar value of their health plans. "Personalized benefits
statements -- or total compensation statements -- seem to be the
best way to let employees know how much a particular benefit costs,
but they don't provide detailed plan information. For that, you
need a summary plan description, which could be available in print
or online," said Kathie Tange-duPre, BPS&M Communications
Consultant. "Making summary plan descriptions and forms available
online is cost-effective for employers because they don't need to
spend money on inventory and storage -- and convenient for
employees and HR." Cost of Poor Quality Care -- Since the cost of
poor quality care is a "major driver" of healthcare costs, an
important step in empowering employees to make wise purchasing
decisions is to provide them with comparative information about the
quality of different providers. Yet, less than half of employers
surveyed requested quality of care data from their broker or
consultant on networks and physicians. Fewer than four percent
ranked healthcare quality issues as a "major issue" and only one in
four considered it a significant one. "New data mining tools,
benchmarks and technology are just now helping to get our arms
around the real cost drivers of continued medical inflation," said
Donahue. Tools for Educating Employees -- Larger organizations are
more willing to educate employees on healthcare costs. Respondents
with more than 500 employees were more than twice as likely to
provide employee education in print media. Size is also a factor in
an organization's reliance on the Internet to communicate.
Respondents with more than 500 employees were four times more
likely to provide Internet-based media than those with 500 or fewer
employees. "Smaller employers simply may not be giving enough
credit to the impact of the Internet," said Donahue. "We know that
young, computer-savvy individuals are entering the workforce every
day. The number of Internet users is growing. Within a few years,
employers will be hiring young people who will not know what it was
like to live without the Internet," said Tange-duPre. The tenth
employee benefits survey conducted by BPS&M surveyed 414
employers representing 378,631 employees, of whom 339,105 are
eligible for healthcare benefits. Respondents represent a variety
of organizations of all sizes and from all regions of the U.S.,
with a concentration among private employers with 1 to 500
employees. Wells Fargo Institutional Trust Services (ITS) provides
benefits consulting, health benefit services, investments,
retirement plan management and comprehensive trust and custody
solutions for institutional clients. Its benefits consulting group,
BPS&M, provides a full range of services focusing on the
design, implementation, administration and communication of
retirement plans, health and welfare programs and nonqualified
deferred compensation plans. Acordia, Inc., a subsidiary of Wells
Fargo & Company, is the world's fifth largest insurance
brokerage and the largest bank-owned insurance broker in the U.S.,
with over 150 offices in 38 states. Its 4,500 insurance
professionals place in excess of $8.5 billion of risk premiums with
expertise in property, casualty, benefits, international, personal
lines and life products. Wells Fargo & Company is a diversified
financial services company with $428 billion in assets, providing
banking, insurance, investments, mortgage and consumer finance to
more than 23 million customers from more than 6,000 stores and the
Internet (wellsfargo.com) across North America and elsewhere
internationally. Wells Fargo Bank, N.A. is the only bank in the
United States to receive the highest possible credit rating, "Aaa,"
from Moody's Investors Service. For complete survey results: Amanda
Kelly at 615-665-5345, . DATASOURCE: Wells Fargo & Company
CONTACT: media, Susan Stanley of Wells Fargo, +1-415-947-3994 Web
site: http://www.wellsfargo.com/
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