Human Resources: Mercer sees health care claims advocacy services as valuable but underutilized benefit

Norwood, MA, January 11, 2010
With employer-sponsored health benefit plans in the social and public-policy spotlight, Mercer is urging many of its clients to consider offering health care claims advocacy services for its employee plan participants. With layoffs, benefit reductions and salary freezes dominating news headlines since the beginning of the recent economic turmoil, many employers should look at what kind of relatively small investments, like a health care claims advocacy service, they can make to re-engage employees and add further value to their total benefits offering.

“Employers have had to take often painful steps to navigate through the recent challenging economy,” said Sander Domaszewicz, Principal with Mercer’s health and benefits consulting business and national health consumerism leader. “The net effect in many firms may be a workforce that is less engaged and more distracted by concerns over job security and the related loss of employer-subsidized health coverage. Adding a health care claims advocacy service to the benefit plan is one of many levers companies could choose to start to reverse this trend.”

Offering some type of health care advocacy service as part of an employer’s benefits package has been gaining momentum. According to the 2009 Mercer National Survey of Employer-Sponsored Health Plans, 53 percent of large employers (500 or more employees) stated that they offer health advocacy services as part of their benefits package, up from 47 percent in 2008. This adoption rate, however, lags far behind similar services such as health risk assessments and case management (see Figure 1).

At the same time, employers have increasingly shifted more of the cost burden of health care to their employees. For example, from 2004 to 2009 the average individual deductible for in-network services in a PPO rose from $686 to $1,096. And this trend is likely to continue; more than two-thirds of US employers (69 percent) will shift more health benefit cost to employees in 2010 via increased premiums and/or by raising deductibles, copays/coinsurance, out-of-pocket maximums and other methods (source 2009 Mercer National Survey of Employer-Sponsored Health Plans).

“Employers are increasingly asking employees to become more active and accountable for their health and their use of health services,” said Mr. Domaszewicz. “One of the many benefits of a health care claims advocacy service is that it provides a balance to this requirement for increased responsibility with additional support when employees need it the most. It sends an empowering message that an employee doesn’t have to completely ‘go it alone’ when navigating the health care system.”

“Mercer and others in the benefits administration outsourcing business have traditionally ‘marketed’ our advocacy services in terms of how it can make the HR function more efficient and effective by having dedicated health plan experts deal with time-consuming health care-related disputes and research,” said Rich VanThournout, Health & Benefits Business Leader for Mercer’s outsourcing business. “While this is still a compelling value proposition for increasingly lean HR departments, the trend of increased employee cost sharing and looming health care reform make the modest investment in a health care claims advocacy service all the more compelling and attractive to employers and employees alike.”

Figure 1 – Health care advocacy services lag other similar services within benefit plans of large employers

Type of service   Percentage large U.S. employers offering - 2008   Percentage large U.S. employers offering - 2009
Health risk assessment   65%   73%
Disease management program   65%   71%
Behavior modification   39%   51%
Health advocate services   47%   53%
Nurse advice line   76%   78%
Case management   79%   82%

Source – 2009 Mercer National Survey of Employer-Sponsored Health Plans. Large employers defined as those with 500 or more employees.

About Mercer
Mercer is a leading global provider of consulting, outsourcing, and investment services. Mercer works with clients to solve their most complex benefit and human capital issues, designing and helping manage health, retirement, and other benefits. It is a leader in benefits outsourcing. Mercer’s investment services include investment consulting and multi-manager investment management. Mercer’s 18,000 employees are based in more than 40 countries. The company is a wholly owned subsidiary of Marsh & McLennan Companies, Inc., which lists its stock (ticker symbol: MMC) on the New York, Chicago, and London stock exchanges. For more information, visit www.mercer.com.