Wyatt Identifies Seven Trends for 2005
New Plan Designs, Significant Benefit Changes During Open
WASHINGTON, September 27, 2004
workers can expect to see major changes in their employer-sponsored
health benefits coverage during the upcoming open enrollment
season, according to benefits consultants at Watson Wyatt
with rising health costs, employers are making several changes
to their benefit programs that employees should anticipate
seeing in their enrollment packages," said Tom Billet,
a senior benefits consultant with Watson Wyatt. "And,
with workers assuming more responsibility for making health
care decisions, they'll need to carefully evaluate their
Here are seven major trends that benefits experts at Watson
Wyatt, which consults with large employers on their health
care benefit and open enrollment programs, have identified
for this year's season.
· New plan designs, but fewer options.
Many employers are adding consumer-driven health plans to
their offerings this season, as options rather than replacements
for traditional plans. Consumer-driven health plans, which
combine high deductibles with personal health accounts,
have lower premiums but emphasize greater individual accountability
for one's health care. Employers are also reducing the number
of HMOs they offer workers, while employees who opt for
preferred provider organizations (PPOs) may see smaller
networks with fewer choices of doctors. Some employees,
especially those in smaller companies, may have an opportunity
to participate in a health savings account (HSA). HSAs,
which allow workers to set aside funds in pretax dollars
for out-of-pocket medical expenses, were created as part
of the Medicare law enacted in December 2003.
· Increased focus on disease management.
Most large employers now offer disease management programs
to help workers better manage chronic illnesses such as
diabetes and heart disease. To encourage workers to participate
in a disease management program, some employers may offer
cash incentives or a discount on premiums.
· Higher costs for doctor, hospital visits.
Some employees will see increases in copayments to visit
a doctor or hospital and higher deductibles for inpatient
hospital care. Costs for prescription drugs are also increasing
this year, with some employers raising copayments for generic,
brand and formulary drugs.
· Surcharge for spousal coverage. One way
employers are attempting to contain costs is to limit the
number of participants in their plans, especially for married
workers. A growing number of companies this fall will impose
a surcharge on employees who opt to include their spouse
in the benefit program if the spouse has coverage elsewhere.
· More voluntary benefits. Employers are often
able to offer ancillary benefits to workers at a much lower
rate than employees would have to pay if they were to purchase
the benefits themselves. At a time when some companies are
scaling back benefits, the good news is that more employers
are making voluntary benefits available to workers for purchase
during enrollment season. Employees may be offered homeowners,
automobile and life insurance; low-rate mortgages and fitness
· Greater access to decision-support tools.
Most employers are now using self-service, web-based tools
that give workers greater control at each stage of health
care decision-making, from plan selection to treatment.
At their computer keyboards, employees can compare the costs
of health plans, determine how much to contribute to a flexible
spending account, check the status of claims, find information
on medical specialists, create personal health records to
keep track of their medications, and visit web sites for
information on specific diseases and wellness topics. Tools
are available in several languages to serve increasingly
· Enhanced employer communication. Employees
are receiving more information to help them navigate the
overall health care system and understand the new health
plan designs. They are also receiving guidance on how to
develop personal criteria for making critical health care
decisions, including choices about their lifestyle and behavior
that could have a significant impact on their short- and
"The decisions employees and their families make during
open enrollment season have clearly become much more complex,"
says Billet. "The good news is that employers are communicating
more effectively with workers about open enrollment. Employers
are also making it easier for employees to evaluate all
of the information, so that they can make the best decisions
for themselves and their families."
Attention Editors: Tom Billet is available to discuss the
upcoming open enrollment season. Please contact Ed Emerman
at Eagle Public Relations, 609-452-5967, email@example.com,
or Ben Taylor at Watson Wyatt Worldwide, 202-715-7550, Benjamin.Taylor@watsonwyatt.com,
to schedule an interview.
About Watson Wyatt Worldwide
Watson Wyatt Worldwide is a global human capital consulting
firm that provides services in the areas of employee benefits,
human capital strategies and related technology solutions.
Watson Wyatt & Company is the primary subsidiary of
Watson Wyatt & Company Holdings (NYSE: WW). The firm
is headquartered in Washington, D.C., and has 3,900 associates
in 61 offices in the Americas and Asia-Pacific. Together
with Watson Wyatt LLP, a leading European-based consulting
partnership, the firm operates globally as Watson Wyatt
Worldwide. Watson Wyatt Worldwide has more than 6,000 associates
in 88 offices in 30 countries.
Ed Emerman, 609-452-5967, firstname.lastname@example.org
Ben Taylor, 202-715-7550, Benjamin.Taylor@watsonwyatt.com
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