In this paper we explore trends in actuarial value — or relative generosity of health plans — in the employment-based health coverage market since the implementation of the major coverage provisions of the Affordable Care Act (ACA) in 2014. Because there is a concern that workers would migrate to lower actuarial value (AV) plans in the exchanges if the Biden Health Care Plan were adopted, it is also important to know whether workers are already enrolling in lower AV plans in the employment-based market as a result of the ACA. In our analysis, we observe:
- Both average and median AV were about 83 percent in each year from 2013 to 2019.
- There were differences in average AV by plan type. The average AV for enrollees in health maintenance organizations (HMOs)/exclusive provider organizations (EPOs) was highest. This was followed by the AV of enrollees in fee-for-service plans. Preferred provider organization (PPO) and point of service (POS) enrollees saw an average AV of 85 percent and 84 percent, respectively. Not surprisingly, plans linked to spending accounts had the lowest AVs.
- Average AV increased for every type of health plan between 2013 and 2019.
- We did not find that demographics significantly affected plan choice.
- We did find variation in AV by industry. Workers in retail trade, agriculture, forestry, fishing, construction, finance, insurance, and real estate are in the lowest AV plans.
As opposed to group coverage, health insurance purchased in the individual market tends to be somewhat less generous in benefits, on average.
This study was conducted through the EBRI Center for Research on Health Benefits Innovation (EBRI CRHBI), with the funding support of the following organizations: Aon, Blue Cross Blue Shield Association, ICUBA, JP Morgan Chase, Pfizer, and PhRMA.
Figure 15 Enrollment by Metallic Tier, Marketplace Exchange During 2021 Open Enrollment Figure 4 Figure 2 Figure 12 Distribution of Sample by Plan Member Age, 2019 Distribution of Sample by Plan Enrollment,* 2013–2019 w A Fi Da Onc V One V Ee g ndn ar ar ct ight ur t e uar of iat iat e a and M t he 8, o tto he ion i ion i tial D c sm e ov is lim s ta e rV lle ibut it rn A n A e a alue d e rt ions fir ion o t pho V V op m , s ula of by Plan T by ds f Sa t — he tthe ion tIn m he p rA g e dus le ov r sea C oup b e A y rra t , c s w y Sy ll h in rand t pe y av nt e he r et e rhis a tcic g rhe e e pG a a AV r tp e oup B e d r is ,ide is tc Size ot lose tha an l a , trH 20 llow tthe o e 19 79 alt e sm ................................ d p a he h Care e ll g ra clt e rh ca nt oup . Ot r m e P he ae lan rxp rk e te ha t ns m n t e a................................ s a y he not nd sm ha ta ot lle vaest l c b ost g er eoup n sh ad a s, t e ring qhe ............... ua w tav eely r ee r age 10 Paul Fronstin is Director of the Health Research and Education Program at the Employee Benefit Research Institute The More Things Change, Pt latin he um F M igure , 1%o 7re They Stay the Same: An Actuarial Value, by Enrollee Age, 2019 Catastrophic, 8% 80% Gold, 8% ® ® a c re a nd p lcrula e m sent e te dd ia e n for d.w P e e rr a ior e c h g vre erse ryou a tight r pc.h h Aly V w a cs found lus as t tehe red n ca t.ha tlc dula edtuc ed tible as t s in t he ra he tio sm of atll g otarl c oup ost m sh ara kreing t ard eiv hi ide ghe d rb y tha tot n d al a ed llow uctible ed he s in t alth ca he re (EBRI). Stuart Hagen is the Ma Dna istri g ing buti Do irn ec o tor f Sam of Hp ela e ltb h yP Iolic ndy u stry Ana ly otf icPo s alti cy the ho B ld lue er ,C 201 ross9 Blue Shield Association Thi W The We he s st da n th o vudy ma e fin re ad g A e v C a A Ar k V for ie p as us a tion in ss e e ed nr of in 201 olle AV b the es y I0, it B in indust MH b MOs/ r Ma oug ryr.k E W ht ePtor Os S actka te w e nrnt a s in a s highe ion to Com gm ric a e st ult cr tca ua ia ur t l C r 90 eia , la l va .4 for im p e lue s a e st rc r.nd y e Most , nt fis E (nc hin Fi of g ount g ur ,t he ea end 11 ra s t ). c ( te C onst Thi nt CA ion w s fin E ruc ) D td ion a aing ts c ab w e a is e nt se rnot e e r ain t e s w d s ur he on ep ll rlow tis a he s t ing eh he st e si a A nc ltV h e 90% Fi An gurea 9, lys Aveis rageo anf d t Me h de ian Ac Gen tuariae l Va ro lue s (it AV) y , of 2013 Employ –2019 ................................ ment-Ba ................................ sed Health .............. 11 5 1 ® ® la expe rgens gr eoup s. E a m ca h w rkeor t.k e Thi r (s and sugdg ee pst end s te ha nt t )A in t V in het he sy n sm the atll g ic g roup roup m w aa rk s ea t ss migne ay bde tlow he sa er m th ea A n w V. hat we found in the large H p IBM ( p B la la Th MOs ha Cns ns B eSA p t ( Ma ha 75 re ). mium rv t k Oliv p e w 30 e e t te r % S rc r ia a c e e is d a nt H it g n the iona oing op ) w B pp hil e e lly ric ne te is o e b fit tb a a hose oe la f P S offe tla e nc he nior n D e in t d he re e rd P he ae si lth olic la in t g ser n D tiv ins yhe e v Re a ura ly ic tnong a e sea gnc b e sect ane e rse c r p oup h An r or ous b o (B li cP w y e a D e ,xc ly ) r e w e .st n ha hic T e i n th he a fit nge h t s w B re C e s. C C fle B highe it A The SA h ti c Ets D . g the a Ja A st htC ta k e A A b e erV p a xp c Sp rse a ee tst la ie c ec te g r ns g ont ic or e d t l is a ( ions ize c a 85 o ins sd t p on o he Re m ef re c a the sea ut e m ltnt h p ili b r ce za )c o rh As la ( v tFi e e ion a ns nr re gur soc d ollm int e he nd o ia 14 a efour tp lth nt e ). r ov a inf ct a m ide E re or B e t r m RI sa elli a . rv tc Thi ion i ces s 70% Insurance, 2013–2019 65+, 1% 28% Figure 10, Average Actuarial Value (AV), by Plan Type, 2013–2019 ......................................................................... 11 group market. I ass fte ue r the Br ie wfo w rka es w r’s c ro its te t n w sharing ith a (ss i.e is.,t acnc ope a 55 y fr me –om 64nts , 16% the , c o Iins nstura itut nc e’e s r , a end sea dre cd h a uctib nd leesd )it aor s ia wl st ell a asff the s. A a ny dminis viewtra s e tiv xpr e e co ss se tsd o in t f the his t ne a ie s w r tw s e or — ll a k p s. s la a P tinu d PjO udic m a, nd a gt old e Pd OS , inpa silv ene t rio re,lle nt ae nd a s sa nd brw out onze ap na .a tThe ie ve nt ra int m gee e d A nt ic V of a of l ala 85 nd b ep p lin e ha rg cr em he nt aa c a lt ynd h p cla 84 la im ns p s. eb rThe y c etnt he B , ir P r D e m spe c eont ta clli tiv acins e tlie y .d r H a w tRA a a s t on s ha o tm he da a k m n a ea it in v e ea ra sigeer 84.5% October 28, 2021 • No. 545 84.1% 85% Trends in AV 83.7% 83.4% 83.3% Figure 5 policy (enrollment, claims payment, etc.). Typically, workers and their employers purchase employment-based insurance A e for re le V of p m o cr onsu etnt 80 ar s of e p m e te hose rr he cs ent a to lt, of h p cw othil m he lap e n b a aH rut e e SA hor ne h- ee fit as, a ligib lt d h p e 83.0% nd si le la g he sh ns n, ould ainc in t lth p luding he not la e ns xc b e d ha ha ead d nge sc uc a rn a ibe ts. ibl P d v ela e s, c tro ta inu g toins he em A offic ur V of pla anc ns e76 re s, t ha rp av re tus e e r c s, c a tee n AV nt eop s, or . Ia tof y im s im ot 90 ehe nt p p s, a ror e sponsor rtca nd ent nt m , to g as of old not xim e u p E m ltB a ha ns RI out t , ha tE he -B of vR e- A I a V -n Paul Fronstin, Ph.D., Employee Benefit ReseFigure 14 arch Institute; Stuart Hagen, Ph.D., Blue Cross Figure 11, 25 Ac % tuarial Va 60lue % , by Enrollee Plan Type, 2019 .......................................................................................... 12 Finally, AV does not take into account the premiums that workers pay for their health coverage. In 2020, workers paid Distribution of Sample by Relationship to Policyholder, 2019 Both the average and median AV were about 83 percent in each year from 2013 to 2019 (Figure 9). Average AV together, with the worker paying 22% a relativ Actu ely ari sma al ll V fractio alue, n bo yf En ther o to llta ee l pIre nd mium ustry(,in 201 2020, 9 the worker share averaged 17 ERF, or their staffs. Neither EBRI nor EBRI-ERF lobbies or takes positions on specific policy proposals. EBRI invites A p for oc V of H ke SA t80 (-MOOP e p ligib erce le )nt a he , m sa ount ilv lth p er s. p lala ns ns d ha oev s not e an AV take of int 70 o a pc ecroun centt, aany nd eb m ronze ploye p r la cont ns ha ribut veions an AV to of a w 60 or k pe err'c se H nt SA (r.e gulations allows Blu e Shield Association; Olivia Hoppe, Blue Cross Blue Shield Association; and Jake Spiegel, 6 Fi on gur avee r12 ag, eA 17 ctua pe ria rcl Va ent lue of , the by p Ernr em olle ium e A for ge , e20 mp19 loy ................................ ee-only coverage and ................................ 27 percent for family ................................ coverage. The amount .. 13 increased for every type of health plan year over year (Figure 10). Despite rigorous requirements around what can be perce 80 nt) % and the employer paying for the remainder. t che om a m ce tua nt l AV on t his to a rp ep sea r50 oxim r % ch.a te the specified AV, so a silver plan may have an AV of 72 percent, for example). The ACA Employee Benefit Research Institute The More Things Change, the More They Stay the Same: An 20% that workers pay for premiums does not count toward the percentage of total spending on health care services paid by D ata from 2013 through 2019 were used for this study. In any given year between 2013 and 2018, the CCAE Database excluded from deductibles, average AV also increased in HSA-eligible health plans. The movement of workers from Under 26, 37% Services 84.7% r 2equired employers with 50 or more full-time-equivale 18% nt employees to offer health plans that provided a minimum value Figure 13, Actuarial Value, by Enrollee Gender, 2019 ............................................................................................. 13 The major provisions of the ACA that took effect in 2014 include the availability of health coverage through exchanges, Analysis of the Generosity of Employment-Based Health workers through various forms of cost sharing. P and POs t BPo DH cRA ont sa a in nd edH dSA a 40 ta % -e on ligib ble et w he ea elt n 23 a h plan nd s (25 Fig m urill eion w 2) wo ould rkerb s a e e nd xp te he ctir ed d teo pe low nde er nt ov s w erit ah e ll am veprloy age m a en nt d- b maesed dia n AV healt . h Yet Suggested citation: Fronstin, Paul, Stuart Hagen, Olivia Hoppe, and Jake Spiegel, “The More Things Change, the of at least 60 percent. In other words, these employers had to provide health plans with at least a 60 percent AV. subsid 75ie %s for people with family income below 400 percent of the federal poverty level who purchase coverage through 15% Bronze, 33% Figure 14, Actuarial Value, by Enrollee Industry, 2019 ............................................................................................ 14 Insura 15n % ce, 2013–2019 benefits. In 2019, the size of the database fell to 20 million workers and dependents. it doesn't appear to be the case that they did. Despite higher deductibles, employers may have enhanced health Introduction Mor e They Stay the Same: An Analysis of the Generosity of Employment-Based Health Insurance, 2013–2019,” EBRI These plans could Oil & not Gas E ex xc trac lude tion, Mi cov nine grage for inpatient or outpatient services. Other requirements had to 84.2% be met in exchanges, modified community rating of health insurance premiums, and guaranteed issue of exchange coverage. 30% benefits just enough to see AV increase if they were doing so to be competitive in a tight labor market. Issue Brief, no. 545 (October 28, 2021). a H Fid e gd a ur it ltion to th e h insu 15, E ra nr nc eollm A eV r pe la nt ens q uir b c yom e Me m Chi e et nt la d/Other in m lli . cE Tier m a, ny p 34% lo , d y Ma iff ere s rr kt e e ha nt tpt la sh fa ca e ile p E e dxc s a to ha np d nge r ov size ide Dsur , su ing bot ch p h in 20la 21 ns te Op r m we e s of n Enr re su how b ollm je c ctost e t nt o sh a ................................ a fin ring ancis ia l p dee sina gne ltyd. as .... we ll 15 By Paul Fronstin, Ph.D., Employee Benefit Research Institute; Stuart Hagen, Ph.D., Blue Cross C 3 onclusion Healt 70 h P % lan Enrollment – About one-half of 10% the sample (48 percent) were enrolled in a preferred provider organization See Figure 6.1 in https://www.kff.org/report-section/ehbs-2020-section-6-worker-and-employer-contributions-for- 45–54, 16% 10% as other plan features. Deductibles, copayments, and coinsurance are forms of patient cost sharing that often vary in a Transportation, Communications, Utilities 84.1% Blue Shield Association; Olivia Hoppe, Blue Cross Blue Shield Association; and Jake Spiegel, 20% Appendix Figure 1, Explanation of Benefits ............................................................................................................ 16 (PPO) in 2019 (Figure 1). Health maintenance organizations (HMOs) and exclusive provider organizations (EPOs) p A re ccmiums ording /.t o our analysis, employment-based health benefits have not declined in value since enactment of the ACA. If Copyright Information: This report is copyrighted by the Employee Benefit Research Institute (EBRI). You may copy, There was concern when the ACA passed that the requirement that employers offering health coverage provide plans Figure 11 c omplex way that makes it difficult for workers and their families to compare and evaluate their health plan options. Employee Benefit Research Institute 5% a any ccount thing e, dA for V ha 15 s p im ep rcre ov nte.d P sl oint ight -of ly- ser ovevric A tc e he tu ( a Pint ria OS) p e l r Vvae lue la nin ns , g by a y c E e count a nroll rs. e H ee d ow Pfor la en v 10 e Try, pe p w e ,* e r c 2 d e 0o nt 19 fin . H de v aa ltrh iap tion in lans coup AV, in led pw ait rth a icula he r, ab lty h print, or download this report solely for personal and non Fc ig om ure m 9 ercial use, provided that all hard copies retain any and w 4 ith at least 60 percent AV would incentivize employers to reduce the generosity of their plans to the 60 percent floor. 65% Silver, 51% Another limitation of the BPD database is that cost-sharing information for prescription drugs is not available. Other plan features may vary as well, such as the breadth and depth of provider networks, and the list of prescription Ma 5% nufacturing, 10 N% ondurable Goods Policyho83.4% lder, 49% reimbursement arrangement (HRA) accounted for 12 percent. Health savings account (HSA)-eligible health plans industry. Those industries with lower AV may not be in a position to improve health benefits and may question the a ll copyright and other applicable notices contained therein, and you may cite or quote small portions of the report Using 95d %ata from mostly the large group market, this paper will show that this has not happened. A similar concern Average and Median Actuarial Value (AV), 2013–2019 drugs (known as a formulary) and other health care services that may or may not be covered benefits. 5 1% See Figure 7.3 in https://www.kff.org/report-section/ehbs-2020-section-7-employee-cost-sharing/. a va cc lue ount in p edr ov for iding 13 p su erc ch b ente . ne Fefit e-s w for-ese rer v the icer e p la a ns via only ble aaltce crona unt tiv ee d. for 2 percent of health plan enrollment. 1% 1% provided that you do so verbatim and with proper citation. Any use beyond the scope of the foregoing requires EBRI’s exists today that the proposed Biden Health Care Plan would lead workers to drop employment-based coverage for ACA 0% 90.4% A T A G L A N C E 60% Manufacturing, Durable Goods 2013 2014 2015 2016 2017 2018 82.6% 2019 0% 6 90% prior express permission. For permissions, please contact EBRI at permissions@ebri.org. e xc Seha e Fi nge gure cov 6.e 1 ra in ge http and/or s://w w ww ould .kff. o lerg ad /re ep m op rtloy -see crtio s t n/ o est hb op s- 2020 offer-ing sectio trand -it 6iona -work l he er-a alt nd h b -emp ene loy fits b er-c eocntrib auseution of thr s-fo ee r- About Actuarial Value Fee-for-Service 1% 2% 2% 2% 2% 2% 2% Coverage provided through employers is the most A cv om era m go en for AV m of coverageM fo erd A iam ne A rV icans under age 65. While ACA Figure 1 HMO/EPO p pre rov miums isions/:. 17% 13% 12% 12% 12% 14% 15% 84.9% indiv idual market covera Wg hol e es hal ae T s g rad arenered a lot of attention sinc 84.1% e it was first offered in the exchanges beginning in 2014, Source: “Marketplace Plan SelectionD s i bstri y Meta bl u Le ti ve o l.” nKa o isf er Sam Familyp Fo le unb day tio Plan n, Open En Enror llo ml el nme t 202n 1. t, htt 201 ps://w9 ww.kff.org/health-re 80.8% form/state- Report ava PP il O a /P bil OSity: This rep70 or% t is availab69 le% on the inte 67 rne % t at www 64 .e %bri.org 61% 60% 58% 55 85% % 2013 82.9% 83.5% Actuarial value (AV) is a summary measure that may be used by consumers and regulators to compare the indicator/marketplace-plan-selections-by-metal-level-2/ 7 See https:HRA //www.ebri.org/docs "/ 6% Th defaul e fu t-ture sourc9% ea /fas in’t t-facts wha /ff 11 t -% 319 it u-s he ea d lthtre to be 11% nds.-"6d - eY 26 c18. o –34 g 13 p i , % 15% d B f?e srra fvrs n=f69 11%73e2f_2 fo12 r 2013 % –2017 it still covers a relatively small proportion of the under-65 U.S. population. Employer coverage is more generous and, 35–44, 16% • Increasing the A2014 CA’s premium subsidies and 8e 2xpa .8%nding subsidy eligibili8 ty 3.. 1 % relative generosity of health plans. Actuarial value is the percentage of covered, allowed health care expenses 80.0% HSA-Eligible Health a Tabl nd auth 60 e% o o r f esC tima ont tee s fo nt r s 2018 –2019. 6% 8% 8% 10% 11% 12% 13% consi80 de %ring the employer contribution, a very good value for most workers. Employer coverage is also very stable, with Finance, Insurance, Real Estate 79.6% Plan Spouse, 17% that is paid by the pla 2015 n. “Covered” health care cost 82.s a 9%re defined as costs for 8 3ser .0% vices and products that are I n th50 is % paper we explore trends in actuarial value — or relative generosity of health plans — in the employment-based Introduction .......................................................................................................................................................... 4 76.0% t he p •e rce Ant “a pg ublic e of o Ap m tion” eric ah ns ea hold lth ping lan.t his type of coverage increasing from 70.5 percent to 72.7 percent between 2013 Source: Employee Benefit Research Institute estimates based on administrative enrollment and claims data. Under 26 26–34 35–44 45–54 55–64 65+ covered by the health insurance policy. “Allowed” health care costs are the total payment amount upon which 2016 82.9% 83.2% Source: Employee Benefit Research Institute estimates based on administrative enrollment data. health cov *He MrO a g = e he a m ltham rk aie nte t nsi annc ce o erg t ahe niza tiim on. p EPO lem =e ent xcla ustiion o ve provf th ider oe rg am niza aj tior on. PPO cov e = r pa reg fee rre p d r pov roviis deions r orga nof izatit ohe n. PO AS = ffor pod ina t-b ofle -se rv Cia ce re Act (ACA) in Limitations of the Analysis 7 75% and 2019. plan. HRA = health reimburs Re em tai eln Tr t aad rrae ngement. HSA = health savings account. 77.3% Actuarial Value, the ACA, and the Biden Health Care Plan ......................................................................................... 5 Source: Employee Benefit Research Institute estimates based on administrative enrollment and claims data. the 50 % health insurer will apply the benefits design. 48% The remainder of the allowed health care expenses is called cost 2017 82.9% 82.4% 2014. Because there is a concern that workers would migrate to lower actuarial value (AV) plans in the exchanges if the • A Medicare “buy-in” program for 60- to 64-year-olds There are a number of limitations with using AV in order to evaluate health plan generosity. First, AV does not take into sharing and is paid by the enrollee. For example, an enrollee visits the doctor for a routine physical exam, which Data and Methods ................................ 2018 ................................ 83.3% ................................ 83.2%................................................. 6 Biden Health Care Plan were adopted, it is also important to know whether workers are already enrolling in lower AV 70% While the ACA ultimately did not cause many employers to drop or reduce the value of the coverage they offered, other account he Soa urc lt eh p : Emla plon ne yee Betnw efior t Re ks sea a rc nd h In sp tir tue tesc esrtiipti mate on s bad serdug on afor dmim nisula trativreie en s. ro llTo ment td he ata .degree providers are not included in a network Source: Employee Benefit Research Institute estimates based on administrative enrollment data. Agriculture, Forestry, Fishing, Construction 74.8% is a covered benefit of this plan. The doctor bills $150 for this office visit, but the contractually set rate is $100, The American Rescue Plan Act of 2021 included the first provision of the Biden Health Care Plan. It eliminated the 2019 83.5% 83.1% plans in the employment-based market as a result of the ACA. In our analysis, we observe: policy actions could do so — even though employers appear reluctant to stop offering such coverage. Lawmakers will Va or rpia re tion in 40 sc% ription AV b my e d Gic roup ines a Siz re e not ................................ included in a formula ................................ ry, plan members us ................................ e out-of-network or non ................................ -formulary 10 Relation to Policyholder – One-half (49 percent) of the sample were policy holders in 2019 (Figure 5). Spouses so the “allowed” cost is $100 and the remaining $50 is w Figure rit3 ten off by the physician (Appendix Figure 1). Under inc om 65e % limit on subsidies, allowing individuals in families with incomes above 400 percent of the federal poverty level Figure 13 Source: Employee Benefit Research Institute estimates based on administrative have to balance the value of helping people obtain a sufficient level of health insurance in the ACA market while medications, and the claims for whic 50h a % re not 55 su % bmitte 60 d % for reim 65 b% ursement 70% , the cost 75 % sharing 80 for % those 85ser % vices 90 is % not represented 17 percent of the sample, and dependent children (and other dependents) represented one-third (34 Distribution of Sample by Plan Member Gender, 2019 Tr ends in AV ........................................................................................................................................................11 t •he p Bla ot n’ h a s b ve ene rag fit es, v and is it m s t ed o ia tn AV he pr A im w ctu earreari y acb al aout re V alu p 83 hye, si pc e b ia ry cn r e En nt e q rin e o uir llee e a ca h ye Gen copaa d ry er fr m,om e 201 nt 20 of 913 $2 t0. o 20 Thus 19., the enrollee pays $20 (FPL) to be eligible for sueb nsi rod llize men dt he anda c ltlh insu aims da rta anc . e coverage in the ACA exchanges. It also increased subsidies for preserving the incentives that help to shore up enrollment in employer coverage. Policy proposals under consideration c ounted toward AV. Furthermore, even if plan members did not use out-of-network providers or non-formulary percent) of the sample. Figure 8 Source: Employee Benefit Research Institute estimates based on administrative enrollment and claims data. a 60 nd % the physician receives $80 from the plan for a total of $100. AV may range from as low as 60 percent for a 90 30 %% families with incomes between 100 percent and 400 percent of the federal poverty level. However, both provisions are Variation in AV by Plan Type .................................................................................................................................12 to help the individual market should consider potential unintended consequences in the employment-based health medications, such limits that affect their use is a form of plan generosity that is not being measured. • There were differences in average AV by plan type. The average AV for enrollees in health maintenance Distribution of Sample by Synthetic Group Size, 2019 health benefits design that will pay just over one-half of the cost of covered, allowed health care expenses to as only in effect for 2021 and 2022. Figure 6 Employment Status of Policyholder – Most of the sample were either full-time workers or their dependents (78 percent) insurance market. Variation in AV by Worker Demographics ................................................................................................................12 organizations (HMOs)/exclusive provider organizations (EPOs) was highest. This was followed by the AV of 55% high as 100 percent for a plan that is designed to completely pay for covered, allowed health care expenses. Distribution of Sample by Employment Status of Policyholder, 2019 AV does not take into account employer contributions to either an HRA or HSA. In some cases, the employer in 201 859 ( % Figure 6). Very few were either part-time workers, early retirees, or COBRA beneficiaries. The remainder (17 83.6% Plan Choice in the ACA Exchanges 20% 83.3% enrollees in fee-for-service plans. Preferred provider organization (PPO) and point of service (POS) enrollees The VariaB tion in iden He AV b alth C y Ia ndust re Plr ay n ................................ proposes permanently ................................ increasing the ACA’s p ................................ remium subsidy leve................................ ls. It also includes sev .... er14 al Figure 10 Distribution Average Median c ontribution to an HRA is structured in a way that the account must be used first, and, therefore, cost sharing is 15% percent) were not determined. 50% As opposed to group coverage, hea Alt ve h insu rage A ra cnc tua eria pur l Vc aha lue se (A dV in t ), by he P la indiv n Tyidua pe,* l ma 2013r– k2 e0 t 1t9 e nds to be somewhat less AV is m sawe a asu n a re vd e ron agea A st V of anda 85 rd p p eop rce ula ntt a ion b nd 84 asi p s.e r For cent e, xa re m sp ple ec, tiin a vely . he Na ot lt h p surla pn risw ingly ith a , n pla AV of ns lin80 ke d p etr o ce spe nt, nding the p lan provisions that are not in the O the Am r/Unk eric no a w n Re n, 17% scue Plan Act of 2021. For instance, it would expand who is eligible for Number of of Plan Number of Distribution Actuarial 13% Actuarial 12% P Ala ppendi n Choice x in t he HM O A/C EP AO Exchanges ................................ POS ................................ PPO ................................ HRA HSA-Eligi ......................... ble Health Plan 14 negated. If the HRA is structured that way, the employer HRA contribution is accounted for in AV. However, if workers 100% 80% 10% genew rous in b ould expe ene ctfit to s, on pay a 80 ve p ra eg rc ee . nt W hil of et he AV a expe verns agees of s aba o ut st a83 nd a pred r cp eop nt ula in e tion, mploy whic me h is g nt-baesed ner a hlly ea lt mh p eant lans to arc ecflect ordin the g t o accounts had the lowest AVs. subsidized health insurance Pl . a Mor n M ee spe mbe cifi rscally M , e the mb p ela rsn would G rao llow ups workeo rf s t Go rog uep t ssubsidize Va dl uce overage in t Vahe lue ACA Industry – The distribution of the sample by industry is shown in Figure 7. Manufacturing and services made up 60 10% can tap the HRA when they want to either pay for health care directly or reimburse themselves for payments they Limitations of the Analysis .....................................................................................................................................15 Source: Employee Benefit Research Institute estimates based on administrative enrollment and claims data. the calculations in this study, plans purchased in the individual market average an actuarial value of 76 percent, based demographics and health status distribution of the people who will be covered by the plan, and on average, the COBRA Continuee, 1% exchanges even if they are offered what is considered affordable health insurance coverage through their job. Total 19,966,383 100% 7,223 100% 83.5% 83.1% percent of *Fe the e-fo rsa -sem rvicp e le ex. c luded because category comprises only about 2 percent of enrollees. m ade for health care, then the employer contribution is not counted in AV. Employer contributions to HSAs are never • Average AV increased 95 for % every type of health plan between 2013 and 2019. HMO = health maintenance organization. EPO = exclusive provider organization. PPO = preferred provider organization. POS = point-of-service plan. HRA on ac w ov ee ig re ht de indiv d ave idua rage ls in t of the he p prla on w portould ion o p f p ayla tns he p re um rca ha ini sed ng b 20 p y meertcaelnt lic a les c veost l — sh caa ta ring. strop Of cour hic (50se, pe b rceecnt aus Ae V) p , eborp onze le 2% Conclusion ...........................................................................................................................................................16 75% Under 50 35,667 0.2% 3,598 50% 75.7% 80.1% = health reimbursement arrangement. HSA = health savings account. counted toward AV. To the degree employers make HRA or HSA contributions that workers can use to offset cost Workers may leave employment-based plans for a number of reasons. Even if they are offered affordable coverage (60 per 0% cent AV), silver (70 percent AV), gold (80 percent AV), and platinum (90 percent AV) — and the three cost- have different health conditions with varying health care needs, any particular plan member may pay more or Two limitations of the CC EA arly E Reti Dat ree ab , a 3% se and BPD are that (1) there is no group identifier, and (2) the plan’s actuarial 50–99 24,472 0.1% 347 5% 80.0% 81.9% Appendix .............................................................................................................................................................16 sharing, • W those e dFee id cont not -for-r S ibut fin ervid cions e tha tw dould em HM og O inc r /E aP rpe Ohic ase s si AV if th gnificae P ny Pt O ly w e arff ee inc ctelude d pla dn ch .P OSoice. HRA HSA-Eligible Health Female, 51% 90% Appendix Figure 1 from their employer, under the Biden Health Care Plan, they would qualify for subsidized coverage in the ACA sharing reduction levels (available to individuals with incomes below 250 percent FPL) — 73 percent, 87 percent, and less than 20 percent of their own covered health care expenses. value is not provided. We came up with a method to create groups and AV. Plan Active Part Time or 100–499 349,468 2% 1 ,309 18% 82.3% 84.2% 70% Male, 49% Endnotes .............................................................................................................................................................17 exchanges if they met the income requirements, which may drive them away from employment-based plans, especially 94 perce Snt ea. s oOv nal, e2% r 90 percent of exchange enrolle Ex ep s c lahose natio an si o lvfe B r ( e51 ne p fietr scent), bronze (33 percent), or catastrophic (8 Source: Employee Benefit Research Institute estimates based on administrative enrollment data. AV d •oe s not We d ne id ce fin ssda r vily ar ip at rion in edict tA he V b pe yr indust centagre y . of Wtor otkael he rs in r alth ca etail t rer a spe de, nding agric ult tha ur t e a, nfor y pe ast rtric yula , fis r hin indiv g, idua const l w ruill c tsp ion, end out 85% 500–999 396,653 2% 549 8% 82.1% 83.5% HMO = health maintenance organization. EPO = exclusive provider organization. PPO = preferred provider organization. POS = point-of-service plan. Although AV does not measure the premium nor the percentage of the premium that workers may be required to if a In o p rd ublic er to -op ca tion he lculatea a ltn AV h pla n for is ele ass ch p expe olicns yhold ive e ars w (and ell. tFu herir the ass rm oc or ia et, ee dm dp eloy pende ers m nts) ay, st thop e sa offe mprle ing wc aov s d eiv raide ged if t int he o percent) metallic tier (Figure 15). HRA = health reimbursement arrangement. HSA = health savings account. of pocketfin . A aV is nce, cins alcur ula atnc ed e , on and the re b aa l si es of statet he ar ec ov in t ehe red low pop eula st A tion V p.la Ins ndivi . dual plan members may spend a greater or 1 1,000–4,999 2,390,239 12% 857 12% 82.6% 83.9% pay as their employee contribution, premiums are often correlated with AV. Plans with a higher AV will almost p sy riv nta he tet ic he “aclt oh p verla ed ns p op the ul ya offe tion” r cgarnnot oups cus om ing petthe e w inf ith th ormea t pion o ublicn p opla tion. n d e Their sign in wor the ke r Bs Pm D a dya tparb ea fe se. r A These CA exc s ha ynt nge he tic 65% lesser percentage out of pocket relative to their total health care spending. For example, plan members with very high 80% Figur 5,0e 0s 0 –9,999 1,795,527 9% 244 3% 82.3% 83.3% Several factors may explain the somewhat-lower AV typically seen in the individual market. First, consumers probably always have higher premiums than lower AV plans unless there is a significant difference in other aspects of the SERVICE HEALTH COVERAGE BENEFITS APPLIED PATIENT RESPONSIBILITY c gov roup era s w ge eov ree b r a esed mp loy on m the ent v -a braious sed p uni lans que if it com is b le ina ss te ions xpe ns of iv cost e a-nd/or sharing mor va er ia ge bne les. rous. The se variables included individual As opposed to group coverage, health insurance purchased in the individual market tends to be somewhat less spending may pay a smaller percentage out of pocket relative to their total use of health care, because they may have 1 m 0or ,00 e0 c o hoic r Mo ere s in the indiv idua 14,97 l ma 4,35r7 ket than would 75% typ ically be 319 offered by an em 4% ployer, and 83t.ha 9%t includes b 83e .1 ne %fit plan, such as benefits covered, extent of the network, characteristics of the drug formulary, or restrictions on a nd family deductibles; copayments for emergency department visits, inpatient stays, primary care physician office generous in benefits, on average. Figure 1, Distribution of Sample by Plan Enrollment, 2019 ........................................................................................ 6 e The xcete 60 rd e % nd theha ir s b ded euc en tible awa a ynd/ froor m 75 r % P eP aO/P ch th OS eire nr out ollm -of- ep nt oc a knd et m tow axim ardum HRA . In con s and tr H aSA st, -e pligib lan me le he mb alt er h p s w la ho ns.us Be e tv w ee ry e n 2013 few he a alt nd h The question then becomes what health plans do if workers lose their employer offering and must obtain coverage offerings with lower actuarial values. Second, while the tax credit is linked to the consumer’s income, it is also based on utilization of high-cost services. Source: Employee Benefit Research Institute estimates based on administrative enrollment and claims data. visits, and specialty physician office visits; and coinsurance for emergency department visits, inpatient stays, and office 20 c ar19 e , ser the vic p ee s w rceill nt p aa gy e a of highe plan rp p ae rtric ce ipa nta nt gs in a e, espe PP cO/P iallyOS if tp he layn fe do ll fr notom re a70 ch th per ecir e nt de t do uc 58 tible pe.r c Ee ss nt e nt (Fi ia glly ur, ep 2 la ). n me Enrollm mbee rnt s in AMOUNT DISCOUNTS AMOUNT COPAY TOTAL t Fi hr goug ure 4 h a 2, D n e istxc ribut hange ion o . On f Satm hep le one by ha Plnd, an Enr wor ollm kers w ent, ould 2013 lose –2019 em p ................................ loyer subsidies for cov ................................ erage. In 2020, work............... ers paid on 7 t he second-lowest-cost silver policy, meaning that it is a fixed number of dollars. Consumers can use their tax credit to visits. Workers who all had the same set of benefits were plaH cE ed A L in t THhe PL sa AN m e “cD ov Ee DrU eC d T pIop BLula E tion group.” In addition 70% H V wS RA ho ar ER s a d iat V o Ind C not ion i EH SA re B a-n A Ic e Lh th ligib LEV De le ir Bby Wo Y he d ea dlt uh p ctible la rA ke ns N m D r d a oub yDe be lem p da o fr y C om ing gr OV aphi 10 6 p ER0 p E er Dce cs ernt c e nt ea of ch tin 201 heir he 3 t alt o h ca 12 p re e rccost ent s, a fornd HRA the s a P he nd Aa ID lt13 h p BY p la en rc is e Pnt A pT afor Iy Eing N T 3 2013 2014 2015 2016 2017 2018 2019 55% The avera pg ur ep 17 ose p e of rctehis nt of pap the er is pr e to me ium xplor for e term en pd loy s in eea -only ctua rc ia olv v ea ra lue ge (a And V) 27 in t p he er c ee m nt p loy form fa em ntily -b acsed ove rm ag ae rk .e tThi sinc s m e a the y le ad p urchase a policy of any metal tier, and while many choose R siE lvS eP r, Oa N si SIza BIb Lle IT Y numbe ArM pO ur Uc N ha Tse bronze because the to covered benefits, the covered population groups included the same plan type (HMO, PPO, etc.), industry, and union Figure 3, Distr Pibut ROV ion o IDER f Sam Rp Ele D U bC y T PIlO aN n M S em(b Ae LrL G Oe W nd ED er ), 2019 ................................................................ Active Full Time P , A 78% TIENT ................ COST 7 Fee-for-Service 82.4% 83.5% 85.0% 85.6% 86.2% 88.1% 89.7% ze HSA ro -e pligib ercele nt .he (Som alth p e la ser ns v.ic es, such as preventive care, are covered in full without the deductible applying.) 2 Different workers may choose different types of health plans depending on their needs. For example, older workers im the pm le Thi m to e s st nt choo a udy w tion o se le a f th ss s c c e oos nduc mta lyj or teexc d c ov ha the nge roug rag e he h th parlt ov eh p E isB ions la RI ns C , in ew nt thic he erh te P fo art nd ie Re nt sea t o Prha rocth o v ee c tlow n He ion a er a nd lt Ah B Vs Aff .e or On ne dfit a tb he s I le nnov ot Ca he rera A t ha ion (E ctnd, (A C m B ARI or ) in 201 eC g Re Hne B4 Ir).o , us To premium after applying the tax credit is often zero, or close to it. Third, because the tax credit is based on a silver V sta ar tus iat . ion in A HMOV /EP O by Group Size 89.7% 89.6% 89.9% 89.5% 89.3% 89.1% 90.4% Fi mg aur y b ee 4, mD or iset rlik ibut ely ion o than younge f Sample rb y w o Prla kn M ers t eo mc bhoose er Age m , 20 ore 19 c om ................................ prehensive plans be................................ cause they expect to ..................... use more 8 ADULT su beb ttsi e w d r it ie unde h th s tha e r st tfun a and r Pd e P ing O ttie /P he O dsu S rtis o pp kt or he of t second w of or the ker follow s -low 83 m .1% igra est ing -tc ing ost org t 83 o g aniz old .4% low a p e tions la r A n V p a : 83 s op Ala on, .6% ns p ose B in t lue d he C t83 o re oss .7% txc he ha B second lue nge Shie s, it 83.8% -l ow ld is A im es st soc p-or cost 84 ia ta .0% tnt ion, silv to eIrk C now UB pla 84 A n ma .2% , w JP he yt h m ee r an policy with an actuarial value of 70 percent, it is typically the case that the consumer purchases either a silver policy or 50% G Sim ende ilarr ta o nd out A-g of e- – ne Ptlw an me ork pm rob ve ide rs rw s, A ere V d split oe s not evenly ta k be e tint weo en ma account les a spe nd nding fema lon es in 201 health ca 9 (Fi reg ur ser ev 3 ic). e s t Wha hetn loo are k eing xclude at d With the possible exception of small groups (firms with fewer than 50 employees), AV was remarkably consistent across OFFICE EBRI Is $150 sue Brief is regi$50 stered in the U.S. Pat$100 ent and Trademark Offic $80 e. ISSN: 0887 –137X/90 $0 0887 –137X/90 $$20 .50+.50 $20 HRA 78.0% 78.4% 79.0% 79.1% 79.6% 80.0% 80.0% health care services. We do not find such sorting to be the case. Younger workers were in plans with an average AV of Male Female su The tha cth a Mor tw ot or d ag l num k ow a en C rnw s aha b a re e rd se, rm of tr or e Pc nd e fiz ov lik e e in A re r, e ly adnd V tp o is op P p a hRMA ur ula lrc eha taion d.se y oc ghigh roup cure rs c ing r ArV p e in t atla ehe d ns re ,a m nge orp p loy lfr am ns om e w nt 2,20 it -h baa 0 t sed n AV o m 3,00 a tha rk0, d e t tis . Thi e closer pe s p nding a tp o e w ron a ha lstto he is e xa y ty ep m aic rine .a Most lly s ho offe w plr aA en d V a bronze and only rarely trades up to a gold policy. Fourth, even under the American Rescue Plan Act of 2021 (ARPA) Source: Employee Benefit Research Institute estimates based on administrative enrollment data. Figure 5, Distribution of Sample by Relationship to Policyholder, 2019 ....................................................................... 9 e fir frnr om mollm si cze ov e.nt e The r abgye la a e g rnt g ee , irst 37 ely fir .p m e For rs h ce e nt a xa d w m te he p rle e m , und som oste g re e a p ne gla er ns ous b 26 d , o 15 e not – n16 e fit c ov p s, b ee rr cut eser nt the v w ic e AV ers e lik for in ee tc ahi hir ch o s g op rf r oup t ahe ct or av 26 ser e –r34 av gic , e35 e ds or only –44 inf , 1.5 p 45 er– tili 54 e ty r, c d a er nd nt ugs ag 55 eor –64 VISIT HSA-Eligible Health Plan 72.7% 73.6% 74.2% 75.2% 75.5% 76.0% 76.0% © 2021, Employee Benefit Research Institute –Education and Research Fund. All rights reserved Note: Not shown on figure are Medicare-eligible retirees, retiree (status unknown), long-term disability, and surviving spouse/dependent, because each 83 percent, while older workers were in plans with an average AV of 84 percent (Figure 12). Similarly, there was little in e v m ae rm ie m s b bpeloy rys w So v m a ue e r rc nt ious ree : - Em p ba a pw r sed loto y eof rek Be c eg ov r nr eoup d fie t er Re m as w g sog ee a. rcr it hah 10,00 In pshic titute s ea sti nd 0 o mate r indust s m baor sede r o y nc .a ov dThe me inr ise tra ne dti vliv xt e ee nsect s. rol lm The eion d nt ansi d ze is clac i m us of s d ses t ahe ta. how grou a pcs t tua ende rial va d tlue o b e b e la cragm er e. tH o ow bee ver, credits but certainly under the original ACA tax credit income levels, some people simply did not qualify for a tax credit Source: Employee Benefit Research Institute estimates based on administrative enrollment data. category makes up less than 0.5 percent of the sample. treatments. The spending on these services would not be counted when AV was calculated. a pg oint e gs m roup ors, a e tha ndn th 1 pe e rov cee nt ra w ll e av ree r65 ag e o.r A old s e expe r (Fi cg te ur de , t4 he ). smallest groups tended to have slightly lower AVs, but our Source: Employee Benefit Research Institute estimates based on administrative enrollment and claims data. Figure 6, Distribution of Sample by Employment Status of Policyholder, 2019 ............................................................ 9 d iff erence in average AV by gender (Figure 13). t khe now dis n in tribut the ion b ACA y a gnd roup its r sie ze le v w aas nc e m tor o e the ev e pnly rop ose distd ribut Bide ed n He (Fig aur lth C e 8a ).r e Plan. The following section discusses data and and had to pay the entire amount of the premium. They may have been more likely to purchase a lower-AV policy. *HMO = health maintenance organization. EPO = exclusive provider organization. PPO = preferred provider organization. POS = point-of-service sample size is too small for this group size for us to be very confident of this result. The data shown in Figure 8 are plan. HRA = health reimbursement arrangement. HSA = health savings account. methods. After that we present our main findings. Figure 7, Distribution of Sample by Industry of Policyholder, 2019 .......................................................................... 10 weighted by plan members, which is skewed to larger firms. When the data are weighted by group — giving more e e e e e e e e e e e e e e e eb b b b b b b b b b b b b b b br r r r r r r r r r r r r r r ri. i. i. i. i. i. i. i. i. i. i. i. i. i. i. i.o o o o o o o o o o o o o o o or r r r r r r r r r r r r r r rg g g g g g g g g g g g g g g g IIIIIIIIIIIIIIIIs s s s s s s s s s s s s s s ss s s s s s s s s s s s s s s su u u u u u u u u u u u u u u ue e e e e e e e e e e e e e e e B B B B B B B B B B B B B B B Br r r r r r r r r r r r r r r rief ief ief ief ief ief ief ief ief ief ief ief ief ief ief ief A re • • • • • • • • • • • • • • • • s e O O O O O O O O O O O O O O O Oa c c c c c c c c c c c c c c c crttttttttttttttttc o o o o o o o o o o o o o o o oh b b b b b b b b b b b b b b b b e e e e e e e e e e e e e e e e re r r r r r r r r r r r r r r r r p 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2o 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8r,,,,,,,,,,,,,,,,t 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 fr0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 o2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 m 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 t h • • • • • • • • • • • • • • • • e N N N N N N N N N N N N N N N N E o o o o o o o o o o o o o o o o................B 545 545 545 545 545 545 545 545 545 545 545 545 545 545 545 545 RI E ducation and R esearch Fund © 2021 Employee Benefit Research Institute 10 16 17 11 14 13 15 12 6 5 4 2 7 9 8 3