2014 UBA Health Plan Survey United Benefit Advisors (UBA) is pleased to present the results of the 2014 UBA Health Plan Survey. The survey was conducted from June 2013 to June 2014, through the joint effort of 118 of the nation’s premier independent benefit advisory firms who comprise UBA. UBA Partner Firms, in conjunction with existing clients, completed responses. Additional area employers were invited to complete the web-based surveys, as well. UBA obtained plan data for a total of 16,467 plans from 9,950 employers. The purpose of the survey is to provide employers with comparative data regarding plan costs, employee contributions, and plan designs that will allow them to benchmark their plan against those of similar employers. That evaluation can be based on employers with similar numbers of employees, employers in a similar industry, or employers in a similar geographic area. The survey focuses solely on active employee and retiree health plans and directly related benefits (prescription drugs, HRA/HSA, and Section 125 plans) in order to derive the most useful results possible. A significant strength of this study is its unique ability to support subgroup analyses. The national scope of the survey allows for regional, industry-specific, and employee size differentials to emerge from the data. In addition, the exceptionally large number of plans included allows for both a broader range of categories than normally reported and a larger number of respondents in each category. This is especially true for the small and mid-size companies who comprise the overwhelming majority of health plans in the country. We once again extend our thanks to all of the participating company representatives and benefits professionals who provided data for this report. Their efforts resulted in the largest number of employer-based plan cost/plan design benchmarks available in the marketplace. We trust you will find the information presented in this report to be of value in reviewing your existing programs and in charting your organizations future health plan strategy.

2014 health plan survey – inside the numbers 9,950 employers 118 Partners contributed Nearly 6 million lives touched

Percentage of grandfathered plans Only 1,342 plans out of 16,467 were grandfathered.

DECEMBER RENEWALS December renewals increased 322% from December 2012 to December 2013. Presumably, this was to delay PPACA changes. “We’re seeing little change in premium rates and benefit plans, and that’s because many employers renewed twice in 2013 to delay the effects of PPACA,” says Carol Taylor, Chairwoman of the UBA Client Compliance Solutions Committee and a Benefits Advisor with D & S Agency, a Virginia-based insurance firm and UBA Partner. “In the category of employers with 50 or fewer employees, the results are staggering: in 2012, there were 507 employers with a December 1st renewal date. In December 2013, that number was more than five times (412.4%) higher at 2,598 employers. This is going to have a ripple effect for years to come in the small group market.” Les McPhearson, CEO of UBA, says, “This trend shows overwhelmingly that the full impact of PPACA compliance and its effect on health insurance costs is still unknown, but paints a gray picture of what’s ahead for employers.”

Plan Type Distribution PPO plans continue to lead the market in participation. Fee-for-Service plans are effectively no longer in the market place. CDHP plans continue to hold onto second in popularity.

PREVALENCE OF PLAN TYPE BY REGION (CDHP) CDHPs remained constant from last year in distribution. The Northeast region of the country has the largest concentration of CDHPs (30.2%), followed by the North Central and Southeast region with 29.3% and 26.3% respectively.

Total Monthly Premiums – All Plans Total monthly premiums have remained fairly constant, growing at the 2% to 3% range.

Average Annual Cost per Employee – CDHP 3.7% 2.1% 2.3% 3.6% Average cost per employee increased at roughly the same rate of all plans.

PERCENTAGE of Employees Enrolled by Type of Plan Of all the plan types offered by employers, PPO plans have nearly two-thirds of all enrolled employees (59.5%). Of all covered employees, nearly half (47.8%) elected to cover their dependents in addition to themselves. These ratios are very comparable to the results of the last four years of UBA Health Plan Survey.

Changes to Total Premiums The average increase for all plan types after carrier negotiations and all plan changes in 2014 was 5.6%. This is in contrast to the initial renewal offer of 10.6%  a 47% reduction from the first renewal offer. 25th Percentile Median 75th Percentile Average

Full-Time Employee Waiting Period Only 2.2% of employees had waiting periods of 180 days or longer. Nearly one-fourth (24.2%) of full-time employees have no waiting period. Immediately Following First of Month Following

In-Network Out-of-Pocket Maximums While average in-network deductibles remained fairly level at $1,901, out-of-pocket maximums (OOP maximums) increased more than 6% in 2014. The median single OOP maximum increased $500 to $3,500 and median family OOP maximum increased $1,000 to $8,000, which is more than double the increase in the average OOP maximum. 25th Percentile Median 75th Percentile Average

2014 UBA Health Plan Survey Across the board, there is a trend toward greater employee participation when it comes to health care decisions and financial contribution. Employees are taking more control over health care expenditures by increasing participation in CDHPs. The previous summary is only a sampling of the key benchmarking data reveled in this year’s survey. For specific benefit plan information and to compare how your plan stacks up against the competition by region, industry and company size, contact your local UBA Partner Firm. UBA also conducts an employer survey that serves as a companion piece to the 2014 UBA Health Plan Survey. The 2014 UBA Benefit Opinions Survey reports employer opinions on key topics surrounding employee communications, plan design, philosophy, plan management, and more. We encourage you to visit our website, www.ubabenefits.com, to learn more about these surveys as well as locate a UBA Partner Firm near you.