Aon Survey: Employers Split on the Impact that Carrier Consolidation Will Have on Their Health Strategies

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Jul 15, 2015, 09:13 ET

LINCOLNSHIRE, Ill., July 15, 2015 /PRNewswire/ -- In the wake of the proposed Aetna and Humana merger, a new pulse survey from Aon (NYSE: AON) reveals that companies have varying opinions on the impact that existing and future health insurer consolidation will have on their organization's health and benefits strategy.

On July 8, Aon conducted a brief pulse survey of approximately 100 companies to gauge their initial reactions to current and future carrier consolidation. Twenty-one percent said carrier consolidation will provide greater cost efficiencies that will be reflected in better cost management. Forty-six percent, however, believe it will result in fewer health plan options for them and their employees. One-third said it will not greatly impact their organization or employees.

Despite these differences of opinion, 44 percent of companies do not expect to make any meaningful changes to their overall health strategies. The remaining 54 percent said they are considering a few options. These include:

Reassessing their current vendor within the next two years (38 percent)
Adopting third-party vendor solutions, such as telemedicine or transparency to supplement what the health plan provides (13 percent)
Supplementing national carriers with regional/local players (5 percent)

Companies share a similar sentiment on their future retiree health strategies. More than three-quarters (76 percent) said that consolidation will not impact their decision-making in the short term. Fourteen percent said the potential market disruption will encourage them to take a "wait and see" approach regarding custom group or exchange-based strategies, and just 10 percent said it will provide an opportunity to make changes and leverage the potential for new market efficiencies.

"Despite whether employers think merger consolidation is good or bad for the industry, most do not feel the need to wait to see how the market shakes out before moving forward with the analysis and implementation of their longer-term health care strategies," said Tucker Sharp, global chief broking officer of Aon Health. "Employers know they need to take action now to address the impact of inevitable premium increases and the upcoming 2018 Affordable Care Act excise tax."

Further information

For further information, please contact the Aon Hewitt PR team: Amy Kaleniecki, 847-771-4225 or Maurissa Kanter, 847-442-0952.

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