Release 3/5/2019

DirectPath and Gartner Unveil 2019 Medical Trends and Observations Report

DirectPath, the company who guides employees to make better health care decisions, today unveiled its annual Medical Trends and Observations Report. Created in collaboration with Gartner, the 2019 report indicates that employers are increasingly designing benefits strategies that deliver the personalized options employees expect in today’s competitive marketplace, while containing health care costs at both the individual and organizational level.

As part of their personalization efforts, employers are increasingly offering and expanding voluntary benefits options. The 2019 report shows that, more and more, employers are broadening their offerings to include financial protection and lifestyle benefits – likely to cater to Gen X, Millennial and Gen Z employees who are typically not as focused on health-related benefits. Seventy-five percent of employers now offer supplemental life insurance (up from 45 percent last year) and 60 percent offer Accidental Death and Dismemberment (AD&D) insurance (up from 30 percent in 2018). For the first time, the analysis also shows employers offering adoption assistance (19 percent), backup child care (7 percent) and financial wellness checks (7 percent) as voluntary benefits.

The 2019 Medical Trends and Observations Report – based on an analysis of more than 1,000 employee benefits plans from nearly 200 companies – also reveals that employers are:

  • Investing heavily in HRAs and HSAs: Fifty-one percent of all employers offer tax-advantaged reimbursement accounts in conjunction with their high deductible health plans (HDHPs). Of these employers, the vast majority (79 percent) offer Health Savings Accounts (HSAs), while only 21 percent offer Health Reimbursement Arrangements (HRAs). Roughly 10 percent of employers offer both, because they sponsor more than one HDHP. While the average “base” employer contribution to these accounts has declined – for HRAs, contributions decreased 13 percent for individuals and 15 percent for families year-over-year – this appears to be because more employers are providing employees with the opportunity to “earn” additional contributions by participating in specified wellness behaviors.
  • Rewarding more wellness initiatives: Forty-two percent of employers are offering wellness incentives, up from 20 percent last year. Biometric screenings and health risk assessments remain the most rewarded wellness behaviors, with 30 percent and 28 percent of employers offering them, respectively. Interestingly, employers are now expanding the definition of wellness – rewarding employees who get a dental checkup, obtain a second opinion, use a center of excellence or who seek to improve the “wellness” of their community by donating blood or volunteering.
  • Revisiting HDHPs: HDHPs now account for 41 percent of all offered plans – after several years of holding steady at around 30 percent. This increase may reflect a desire by employers to offer a range of plans to meet the diverse needs of their multigenerational workforce and an increased focus on – and interest in – HRAs and HSAs by employers of all sizes as a tool for saving for the future as well as for meeting immediate health care costs.
  • Covering preventive drugs: Twelve percent of employers are covering preventive drugs at no cost and a handful are covering them at a lower cost (lower copay or higher coinsurance level) than generic medications. With Americans on average filling over 12 prescriptions per year, this too may be tied to the uptick in HDHPs – the high deductibles can also make some participants hesitant to fill prescriptions, including those for medications (such as blood pressure, cholesterol and diabetic medications) that can prevent or delay the onset of conditions that can become costly to treat.
  • Foregoing telemedicine: Forty two percent of employers offer telemedicine as a health care delivery option – down from 55 percent last year. While this may be due to the relatively low utilization rates of these types of plans, employers may want to reconsider this strategy – and beef up their communications promoting the program – as recent research indicates that millennials are increasingly electing “on demand” health care in place of a primary care physician.

“Employers are diversifying their benefits options and employees are taking note,” said Brian Kropp, group vice president of Gartner’s HR practice. “Our data suggests that voluntary benefits, in particular, have a significant impact on employees’ perceptions of their health care benefits – which could suggest that organizations are on the right track with their 2019 strategies.”

Kim Buckey, VP of client services at DirectPath, added: “For years, we’ve encouraged employers to design creative health care benefits strategies that cater to each employee’s unique needs while controlling health care-related costs. The results of our 2019 report findings suggest that employers are striving to do just that. Organizations are taking steps to provide employees with more options than ever before – whether that’s through an expanded voluntary benefits package or rewards for a broader range of wellness behaviors. The key now is to educate employees on the value of these offerings so they can best utilize them – and ultimately drive down health care costs for themselves and for their employers.”

To download the full 2019 Medical Trends and Observations report, please visit this page. DirectPath will present the report findings in a webinar today, March 5 at 11:00 AM EST. To register for the webinar, “Pulse on Medical Plan Trends and Observations,” please visit here.

Research Methodology

The report is based on an analysis of more than 1,000 employer health plans drawn from The Lab®, the industry’s only medical health plan benchmarking database, powered by DirectPath and Gartner research. The Lab supplies real-time access to in-depth plan and pricing information, helping benefits teams compare their plans with other organizations by industry, geography and company size. DirectPath offers companies the ability to benchmark their plans against industry comparisons in The Lab.