PLANSPONSOR - September 2017 - 30

creating another. "
Health Care Applications
Data analytics can also play a role in employers' decisions about
health benefits. Some ways they may utilize it include:
* Modifying health plan design. Employers contemplating
health coverage changes can, via data analytics, learn how
such changes could affect employees' usage of the plan and
the employer's costs. " We look into, what is driving the [cost]
trend? " Kaplan says, adding that 95% of Segal's clients are selfinsured.
" We [evaluate] an employer's overall cost per employee
this year vs. last year: What is trending at higher rates than [for]
the employer's peers? " Sometimes that analysis uncovers a plandesign
flaw that needs to be fixed, he says. Or it may lead an
employer to introduce a high-deductible health plan (HDHP)
with a health savings account (HSA).
For employers considering adding an HDHP and HSA, data
analytics can project how many employees would move to that
option based on different scenarios of premiums and employer
HSA contributions-and how that would affect the employer's
health care costs. " You have to price [the high-deductible
premium] to get the right mix of claims, " Kaplan says. Segal can
do projections based on analyzing employee demographics by
factors such as age and sex. " That will show, what will the impact
on the employer's costs be if 5% of employees come in? What will
the impact be if 10% of employees come in? We use modeling to
help set the 'price tags' for the employer to incent employees to
go into a high-deductible plan. "
An employer's corporate culture also plays a big role in the
decisions it makes about health plan design for the next year,
says Denise Mirtich, director of informatics and technology at
Oswald Companies, an insurance brokerage and risk management
firm in Cleveland. She recalls one paternalistic client
that faced steadily rising health care costs but still recently
opted against adding a spousal surcharge-i.e., for premiums
including employee spouses not covered by other insurance-to
help curb expenses.
" You have to find the right balance between the health plan
design and the employer's culture, " Mirtich says. When talking
about requiring employees to shoulder more of their health care
costs, she observes, " Some employers say, 'Yes, I realize that we
need to shift more costs to employees, but we just can't do all of it
this year.' So we [present] a three-year strategy plan: We explain,
'Here is what you can do, step by step, to get you there.' "
* Designing wellness program incentives. Now that many
employers' wellness program has been in place for several years,
they have the opportunity to analyze its effectiveness and how to
improve it, says Paul Fronstin, director of the health research and
education programs at the Employee Benefit Research Institute
(EBRI) in Washington, D.C. " We can start looking at the longerterm
impact of these programs, " he says. " Wellness programs
have taken a beating on their ROI [return on investment]: There
have been many claims that there isn't enough of an ROI for
30 PLANSPONSOR.com September 2017
employers. But, for the most part, the analysis so far has focused
on what happens to health care expenses in the first year of a
wellness program. And the first year may not be enough to see
the changes in things such as someone's cholesterol level or BMI
[body mass index]. "
Now the opportunity exists to examine wellness program
data alongside several years of claims data, both for a specific
employer and a broader database of many employers. The
resulting insights can help employers decide if they want to introduce
new incentives, such as an HSA contribution, the following
year to encourage participation. " You can do an analysis to see,
does doing that increase participation in the wellness program? "
Fronstin says. " If so, which employee groups are likely to participate
in the wellness program? And is that participation then likely
to have an impact on their use of health care? "
Data analytics also can help an employer plan a more tailored
wellness communications program for the next year, Mirtich says.
" A key component to wellness programs' success is engagement,
and making the program personalized, " she says. " So we use data
to drive specific messages to employees that are relevant to them. "
Rather than a generic email encouraging wellness participation,
for example, data analytics can identify diabetic employees, and an
employer can then send a message to these employees explaining
how the program specifically can benefit them.
* Evaluating HSA usage. Some employers have facilitated
access to HSAs for several years now, and Vance says that the
multi-year data is clarifying how employees use them. " The
analytic that is most popular with employers is [the one examining],
are people just putting money in and then taking it out
that same year? " she says. " We analyze the data by different
employee demographic segments and look at which employee
segments are just taking the money out? Among employers,
there's a lot of focus now on, 'How can we encourage employees
to keep money in their HSA and not just spend it every year?' "
An employer can use the insights gained from the data to plan
targeted education for the next year, for instance.
Many employers still are " sitting on the sidelines " rather
than trying to migrate employees to high-deductible plans and
HSAs, Fronstin says. Corporate culture may be coming into play
as employers see research by EBRI and others on the impact-
both positive and negative-of employees switching to highdeductible
plans and bearing more of the cost burden.
EBRI for instance, utilizing data from multiple employers,
did a study that found the migration was followed by lower medication
adherence and more emergency room visits.
Another study found that lower-income workers' health care
usage was affected more than higher-paid workers'. " I had an
employer who called me up after that report came out and said,
'That had a real impact on us. We changed our HSA contribution
so that now we give it all on January 1, instead of spread
throughout the year,' " Fronstin says. " That employer decided
that, for its lower-income people, it needed to do something
more. " -Judy Ward
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