In 2008, PriceWaterhouseCoopers' research team surveyed senior executives at more than 100 large US-based multinational companies and more than 250 privately held small companies. The large companies each have an average of 8,000 employees and revenue of about $3 billion. The small employers each have a workforce of about 200 and less than $50 million in revenue. In addition, PwC surveyed more than 500 human resources executives separately on benefit plan design issues. This white paper discusses the results of this survey.

Executive Summary

     In the United States, employers have had an 80-year relationship with health insurers, and it’s been a long learning curve for both. In 2008, the relationship is entering one of its most challenging eras. Health benefit costs are outstripping wage growth, and some policy leaders are questioning the wisdom of the employer-based model itself. About 160 million workers and their dependents, or two-thirds of the non-elderly population, depend on their employers for health benefits.¹ Studies show that most of them are satisfied with their coverage and that many employers want to continue providing health benefits. However, employers’ expectations of their health insurers are changing. While many studies examine the relationship between employees and their employer-sponsored benefits, less is known about employers and what they want from insurance carriers.
     PricewaterhouseCoopers’ Health Research Institute analyzed the needs, wants, and satisfaction levels of employers regarding health insurance and benefits so as to identify and understand emerging themes from an employer’s perspective. What Employers Want from Health Insurers—now provides an inside look at how employers view employee benefit service offerings, emerging trends, and strategic priorities. The report also makes recommendations regarding how insurers can better deliver services to their clients.

Key Findings

• Employers reported mixed satisfaction ratings of insurer-provided services, thereby indicating opportunities to improve service.
• Levels of satisfaction were lower among smaller employers (under 250 employees) for all of the 12 insurer-provided or related services studied in the survey. Other studies have shown that small businesses pay more for health insurance and have been the most likely to drop it in recent years.
  
• Large employers rated wellness services nearly as high in importance as the basic functions of accurate claims processing and provider discounts. However, the biggest gap in level of importance between small and large employers was in wellness services. Nearly 80% of large employers said they were important compared with 50% of small employers.
  
• Employers are recognizing that wellness programs must be coupled with employee financial incentives. Two-thirds of the employers surveyed said they see value in offering incentives to employees for participation in wellness or disease management programs or for responsible health behavior.
  
• Employers reported that workers are two to four times more likely to enroll in wellness programs if they receive positive incentives such as gift cards or premium reductions. Incentives clearly matter, but more is not always better.
  
• Employers want more-meaningful data from their health benefit programs, and they see an increasing need to measure and manage the costs and value of those programs. That situation is increasing the expectations for data warehouse managers to effectively integrate data related to employee conditions, utilization, and outcomes. Employers are also focusing on using data to help monitor employee productivity.
  
• Employers would forgo customized health benefits in exchange for significant, direct cost savings. Customization of healthcare plans adds to administrative cost, particularly among providers, and the majority of employers said they would be willing to accept less customization if insurers were to offer a reduction in administrative fees. Smaller employers were seeking a greater reduction in fees or premiums in exchange for less customization.
  
• Employers increasingly want to work with fewer vendors to manage all of their health-related benefits; insurers need to be ready to respond to that request.