Health Plans Risk Losing Employer-Sponsored Group Business Unless Satisfaction Improves

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Health Care Service Corporation (HCSC) Ranks Highest in Satisfaction among Fully Insured Employers; Cigna Ranks Highest among Self-Funded Employers

WESTLAKE VILLAGE, Calif.: 27 June 2013 With such alternative healthcare purchasing choices as public and private exchangesor cutting coverage altogethertaking shape among employers, health plans risk losing group business unless they improve employer satisfaction, according to the J.D. Power 2013 Employer Health Plan StudySM released today.
Key Findings
  • HCSC ranks highest among fully insured employers with a score of 741; Cigna ranks highest among self-funded employers at 707.
  • Nearly one-fifth (15%) of employers say they "definitely will not" or "probably will not" continue sponsoring coverage in five years.
  • Among employers in both segments, there is a 90-point gap in overall satisfaction scores between employers that intend to offer coverage in the future and those that intend to discontinue coverage.

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

Among fully insured employers, satisfaction averages  709 (on a 1,000-point scale); among self-funded employers, satisfaction averages 696. Satisfaction across all factors among employers that do not intend to offer coverage five years from now is at least 76-points lower than employers who intend to offer coverage. 
"Health plans need to understand the importance of satisfaction in order to limit the erosion of their business from employer-sponsored coverage to alternative channels where employees have more choices," said Richard Millard, senior director of the healthcare practice at J.D. Power. "Those health plans that focus on closing the satisfaction gap across key performance factors are more likely to retain employer-sponsored group contracts."
In both the fully insured and self-funded segments, employer satisfaction with program offerings, such as preventive health programs, disease management or wellness initiatives, is a key area of differentiation between employers that intend to offer coverage in the future and those that intend to drop coverage.  In the program offerings factor, the gap in satisfaction scores between fully insured employers that intend to offer coverage in the future and those that intend to drop coverage is 104 points705 among employers that intend to offer coverage, compared with 601 among those that intend to drop coverage. Among self-funded employers, the gap in satisfaction scores between those that intend to offer coverage in the future and those that intend to drop coverage is also 105 points689 among employers that intend to offer coverage, compared with 584 among those that intend to drop coverage.
Cost is another important driver of satisfaction. Cost satisfaction among employers that indicate they intend to continue sponsoring coverage in the future is 106 points higher than among those that intend to drop coverage (696 vs. 590, respectively). Satisfaction with cost is improving as more consumer driven high-deductible plans are offered to employees, which 82 percent of employers indicate are controlling costs. 
"One way that health plans may improve employer satisfaction is by demonstrating they are making an impact on the health behavior of employees," said Millard. "How well health plans are able to do this may make a difference in determining whether an employer chooses to continue offering coverage or not."
Plan Satisfaction
Among fully insured employers, HCSC ranks highest with a score of 741, while Cigna ranks highest among self-funded employers with a score of 707. Both health plans perform particularly well in benefits design, problem resolution and account servicing.
The 2013 Employer Health Plan Study is based on responses from 5,857 employers, with quotas to assure an adequate distribution of small, medium and large companies. The study was fielded in April and May 2013. 
 

About J.D. Power

J.D. Power is a global marketing information services company providing performance improvement, social media and customer satisfaction insights and solutions. The company's quality and satisfaction measurements are based on responses from millions of consumers annually. Headquartered in Westlake Village, Calif., J.D. Power has offices in North America, Europe and Asia Pacific. For more information on car reviews and ratings, car insurance, health insurance, cell phone ratings, and more, please visit JDPower.com. J.D. Power is a business unit of McGraw-Hill Financial.

About McGraw Hill Financial

McGraw Hill Financial (NYSE: MHFI), a financial intelligence company, is a leader in credit ratings, benchmarks and analytics for the global capital and commodity markets. Iconic brands include: Standard & Poor's Ratings Services, S&P Capital IQ, S&P Dow Jones Indices, Platts, CRISIL, J.D. Power, McGraw Hill Construction and Aviation Week. The Company has approximately 17,000 employees in 27 countries. Additional information is available at www.mhfi.com. 

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