Pennsylvania Employers Look to Health Benefit Plan Design Changes to Reduce Rising Costs

Conrad Siegel’s Annual Medical & Rx Drug Survey Reveals Spousal Coverage Provisions, High Deductible Plans Are Among Leading Methods to Contain Costs

Conrad Siegel, delivering comprehensive employee benefits and investment advisory services, has announced the findings of its annual Medical and Prescription Drug Survey. The survey reports and analyzes employer healthcare trends across Central Pa.

The survey results reveal changes employers are making in medical plan design to contain rising costs, including a continued shift towards high deductible plans, increased limits around spousal coverage and financial incentives to waive coverage or participate in worksite wellness programs.

“Over the past few years, we’ve seen more employers shifting to these tactics to manage rising healthcare costs,” said Rob Glus, Partner at Conrad Siegel and Chair of the Health and Welfare committee. “This year’s survey results come as no surprise, in keeping with the trend toward consumer-driven and high deductible plans. We also see employers taking a proactive approach with wellness programs to reduce high costs further down the road.”

Employers Limit Spousal Coverage, Offer Financial Incentives to Waive Coverage

Over the past few years, employers have implemented tighter restrictions on spousal coverage to reduce overall costs. The survey showed that 45 percent of respondents have a spousal coverage provision for medical and prescription drug insurance. Of those, 35 percent require a surcharge to cover a spouse. Another 50 percent of respondents do not allow coverage if the spouse has access to coverage through their own employer. The remaining 15 percent have special agreements with unions or rules that include spousal coverage counting as the primary insurance.

In a continued effort to reduce costs, 42 percent of companies surveyed offer cash compensation to employees who waive medical and prescription drug insurance, an increase from 41 percent the previous year and 33 percent in 2015. The average cash compensation amount is $2,054.

High Deductible Plans Rise Slowly

Of the plans surveyed, 89 percent require an individual deductible and 65 percent of these plans have deductibles that are $500 or more. The number of plans requiring a deductible has steadily grown – in 2014, 79 percent of plans required a deductible; in 2015, the number grew to 83; and in 2016, 87 percent of plans required a deductible.

Health Savings Accounts (HSAs) have grown as well, with 33 percent of respondents offering them to employees, up from 26 percent in 2016.

Rx Co Payments Remain Relatively Unchanged

Prescription drug copayments have largely remained consistent over the past few years. Responses show that the average price of generic, formulary and nonformulary prescription drug copayments has remained almost the same for retail and mail order drugs. Copayment prices average at $10 for retail generic drugs, $32 for retail formulary and $54 for retail nonformulary. Copayment prices average at $21 for mail order generic drugs, $64 for mail order formulary and $108 for mail order nonformulary.

“Employers recognize that offering reasonable prescription drug copayments is an important aspect of their health plan. They do not want to price people out of being able to afford prescription drug coverage,” said Glus. “Instead, employers have implemented drug management programs to help manage costs. These plan provisions require people to choose more cost-effective drugs to keep co-payments low and drive savings and efficiencies.”

Financial Incentives Offered for Wellness

As a part of worksite wellness programs, 17 percent of respondents report offering financial incentives through lower premium sharing for participants. This has decreased from 2016, when 20 percent of respondents offered the incentive.

The survey was conducted in December 2017 and reflects responses from over 100 companies of all sizes and across multiple industries.

Conrad Siegel maintains one of the largest, most comprehensive regional employee benefit databases available in central Pennsylvania. For more information about Conrad Siegel’s health and welfare services, please visit