J.D. Power and Associates Reports: Amid Uncertainty, a Large Proportion of Employers Prepare to Pursue Alternate Health Coverage Offerings for Their Employees

WESTLAKE VILLAGE, Calif., June 18, 2012 /PRNewswire/ -- Amid uncertainty surrounding the future of employer-sponsored coverage, employers are preparing to pursue alternate methods of offering healthcare options to their employees -- such as defined contributions, vouchers, exchange purchasing -- or cutting coverage altogether, according to the J.D. Power and Associates 2012 Employer Health Plan Study^SM released today.

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The study, now in its third year, measures six key factors that affect employer satisfaction with health insurance carriers: employee plan service experience; account servicing; program offerings; benefit design; problem resolution; and cost. Health plans are ranked in two segments: fully insured plans (health plan assumes the risk of providing health coverage for insured events) and self-funded plans (employers bear the risk associated with offering health benefits).

The study finds that 47 percent of employers say they "definitely will" or "probably will" switch to a defined contribution model within a private exchange, allowing employees to select the coverage that best fits their needs, while also potentially saving the employer costs. In the J.D. Power and Associates 2012 Member Health Plan Study,^SM published earlier this year, 42 percent of respondents with employer-sponsored coverage expressed interest in the defined contribution model as well.

As other options become available, some employers may consider eliminating coverage altogether. Despite uncertainty regarding future costs and methods of covering healthcare, only 13 percent of fully insured employers and 14 percent of self-funded employers say  they "definitely will not" or "probably will not" continue to sponsor employee coverage at all.

"As the landscape of healthcare changes, employers face many choices in how to best serve their employees with competitive coverage at affordable costs," said Rick Millard, senior director of the healthcare practice at J.D. Power and Associates. "While some reports have predicted that a large number of employers might stop offering coverage, study findings indicate that a large majority won't walk away from offering coverage to their employees."

Cost is still a primary concern for both employers and employees, and has a greater impact on choosing a health plan than on the actual service experience. The perceived reasons for high healthcare costs vary among employers and employees. Employers view fees charged by doctors and hospitals as the top reason for high healthcare costs, while employees most frequently view health insurance companies' marketing or administrative costs as the primary reason for high costs.

Employer Health Plan Results
Among fully insured plans, Kaiser ranks highest in employer satisfaction with a score of 716 (on a 1,000-point scale). Kaiser performs particularly well in account servicing, problem resolution, program offerings, cost and employee plan service experience.    

Among self-funded plans, Aetna ranks highest in employer satisfaction, achieving a score of 680 and performs particularly well in account servicing.

The 2012 Employer Health Plan Study is based on responses from 6,579 employers, with quotas to assure an adequate distribution of small, medium and large companies. The study was fielded between April and May 2012.

About J.D. Power and Associates
Headquartered in Westlake Village, Calif., J.D. Power and Associates is a global marketing information services company operating in key business sectors including market research, forecasting, performance improvement, Web intelligence and customer satisfaction. The company's quality and satisfaction measurements are based on responses from millions of consumers annually. For more information on car reviews and ratings, car insurance, health insurance, cell phone ratings, and more, please visit JDPower.com. J.D. Power and Associates is a business unit of The McGraw-Hill Companies.

About The McGraw-Hill Companies
Founded in 1888, The McGraw-Hill Companies is a leading global financial information and education company that helps professionals and students succeed in the Knowledge Economy. With leading brands including Standard & Poor's, McGraw-Hill Education, Platts energy information services and J.D. Power and Associates, the Corporation has approximately 21,000 employees with more than 280 offices in 40 countries.  Sales in 2010 were $6.2 billion.  Additional information is available at http://www.mcgraw-hill.com.

Media Relations Contacts:
Jeff Perlman; Brandware Public Relations; Woodland Hills, Calif.; (818) 317-3070; [email protected]

John Tews; J.D. Power and Associates; Troy, Mich.; (248) 312-4119; [email protected]

No advertising or other promotional use can be made of the information in this release without the express prior written consent of J.D. Power and Associates. www.jdpower.com/corporate

SOURCE J.D. Power and Associates

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