Data and Study Sample Figure 1 ® ® This study makes use o A fv te he ra IB ge M a Ma nd rke Me tSc dia ann C A om ctu ma er ria cial l C Va lalue ims a , 2 n0 d Encou 13 –2019 nters Database (CCAE) as ® ® well as the IBM MarketScan Benefit Plan Design Database (BPD). The CCAE database contains member January 6, 2022, #418 2013 2014 2015 2016 2017 2018 2019 enrollment information as well as adjudicated inpatient and outpatient medical and pharmacy claims. The 90% BPD contains data on the main elements of health plan benefit design, including deductibles, coinsurance 83.5% 83.5% 83.3% 83.1% 83.2% 83.2% 83.1% 82.9% 82.8% 82.9% 82.9% 82.9% 83.0% 85% 82.4% rates, copayments, and maximum out-of-pocket (MOOP) amounts. 80% Generosity of Employment-Based Health Insurance Data from 2013 through 2019 were used for this study. In any given year between 2013 and 2018, the 75% CCAE Database and BPD contain data on between 23 and 25 million workers and their dependents with Unchanged Since 2013 70% employment-based health benefits. In 2019, the size of the database fell to 20 million workers and 65% dependents. When the Patient Protection and Affordable Care Act (ACA) was passed in 2010, some voiced concern about a 60% r ace to the bottom when it came to actuarial value (AV) of employment-based health care plans. That’s because While the ACA ultimately did not cause many employers to drop or reduce the value of the coverage they offered the ACA required that employers offering health coverage provide plans with at least 60 percent actuarial value. 55% to look more like the individual market, other policy actions could do so — even though employers appear The fear was that the new law would cause employers to reduce the generosity of their plans to the 60 percent 50% reluctant to stop offering such coverage, especially in today’s labor market. Lawmakers will have to balance floor. However, recent research from the Employee Benefit Research Institute (EBRI) shows that this has not Average AV Median AV Average Actuarial Value Median Actuarial Value keeping insurance affordable for those without an offer of employer coverage in the ACA market without been the case. jeopardizing the long-standing incentives that help to shore up enrollment in employer coverage. Policy Source: Employee Benefit Research Institute estimates based on administrative enrollment and claims data. proposals under consideration to help the individual market should consider potential unintended consequences in the employment-based health insurance market. About Actuarial Value Still, there were differences in average AV by plan type. The average AV for enrollees in health maintenance About EBRI: The Employee Benefit Research Institute is a private, nonpartisan, nonprofit research institute organizations (HMOs)/exclusive provider organizations (EPOs) was highest. This was followed by the AV of based in Washington, DC, that focuses on health, savings, retirement, and economic security issues. EBRI does Actuarial value (AV) is a summary measure that may be used by consumers and regulators to compare the enrollees in fee-for-service plans. Preferred provider organization (PPO) and point of service (POS) enrollees not lobby and does not take policy positions. The work of EBRI is made possible by funding from its members relative generosity of health plans. Actuarial value is the percentage of covered, allowed health care saw an average AV of 85 percent and 84 percent, respectively. Not surprisingly, plans linked to spending and sponsors, which include a broad range of public, private, for-profit and nonprofit organizations. For more expenses that is paid by the plan. accounts had the lowest AVs. information go to www.ebri.org or connect with us on Twitter or LinkedIn. AV is measured on a standard population basis. For example, in a health plan with an AV of 80 percent, A Thank You To Members: This study was conducted through the EBRI Center for Research on Health Figure 2 the plan would expect to pay 80 percent of the expenses of a standard population, which is generally meant Benefits Innovation (EBRI CRHBI), with the funding support of the following organizations: Aon, Blue Cross Average Actuarial Value (AV), by Plan Type,* 2013 –2019 to reflect the demographics and health status distribution of the people who will be covered by the plan, and Blue Shield Association, IC 10 U 0% BA, JP Morgan Chase, Pfizer, and PhRMA. on average, the covered individuals in the plan would pay the remaining 20 percent as cost sharing. Of course, because people have different health conditions with varying health care needs, any particular plan 95% ### member may pay more or less than 20 percent of their own covered health care expenses. 90% Although AV does not measure the premium nor the percentage of the premium that workers may be 1 required to pay as their employee contribution, premiums are often correlated with AV. Plans with a higher 85% AV will almost always have higher premiums than lower AV plans unless there is a significant difference in other aspects of the plan, such as benefits covered, extent of the network, characteristics of the drug 80% formulary, or restrictions on utilization of high-cost services. 75% 70% 2013 2014 2015 2016 2017 2018 2019 Key Findings: Fee-for-Service 82.4% 83.5% 85.0% 85.6% 86.2% 88.1% 89.7% HMO/EPO 89.7% 89.6% 89.9% 89.5% 89.3% 89.1% 90.4% The research shows that both average and median AV were about 83 percent in each year from 2013 — prior to PPO/POS 83.1% 83.4% 83.6% 83.7% 83.8% 84.0% 84.2% the implementation of the major coverage provisions of the ACA — to 2019. HRA 78.0% 78.4% 79.0% 79.1% 79.6% 80.0% 80.0% HSA-Eligible Health Plan 72.7% 73.6% 74.2% 75.2% 75.5% 76.0% 76.0% Source: Employee Benefit Research Institute estimates based on administrative enrollment and claims data. *HMO = health maintenance organization. EPO = exclusive provider organization. PPO = preferred provider organization. POS = point-of-service 1 The premiu plam n. HR isA th = e hep alr thice reimo bu f rs th em e eh nt ea arra lth ng ein mes nu t. r HSA = anceh p eao lth licy sav, in wh gs ac ich cou nr t.eflects the expected cost of the covered health care services after the worker’s cost sharing (i.e., copayments, coinsurance, and deductibles) as well as the administrative costs of the Nonetheless, average AV increased for every type of health plan between 2013 and 2019 — in fact, if anything, policy (enrollment, claims payment, etc.). Typically, workers and their employers purchase employment-based insurance AV improved slightly over the intervening years. together, with the worker paying a relatively small fraction of the total premium (in 2020, the worker share averaged 17 percent) and the employer paying for the remainder. 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