Human Resources: Watson Wyatt Identifies Major Benefit Trends During Open Enrollment Season

WASHINGTON, September 24, 2007 – Millions of U.S. workers are getting ready
to make important decisions about their health care benefits as this year’s
open enrollment season rapidly approaches. With companies seeking to
improve employee health and control rising health care costs, employees
should take the time to review and evaluate the benefit choices employers
are offering for next year, according to experts at Watson Wyatt Worldwide,
a leading global consulting firm.

“Open enrollment is a much more active process than it was just a few years
ago,” said Ted Nussbaum, North America director of group and health care
consulting at Watson Wyatt. “With some employers making significant changes
to their benefit offerings, employees will need to pay closer attention to
their options than ever before. And that will require time to ensure they
receive the benefits they want for next year.”

Here are some of the major trends that benefits experts at Watson Wyatt,
which consults with large employers on their open enrollment programs, have
identified for this year’s season:

Incentives/penalties for healthy/unhealthy behaviors. Companies recognize
that having a healthy workforce can help control rising health care costs
and increase worker productivity. More companies are offering financial
incentives to employees who have healthy lifestyle habits or who
participate in wellness and fitness programs. A forthcoming survey by
Watson Wyatt and the National Business Group on Health (NBGH) shows that 46
percent of employers currently offer economic incentives and another 26
percent plan to do so in 2008. A few companies take the opposite approach
and penalize workers for unhealthy choices, such as smoking, by charging
them higher premiums. Many companies give workers a financial incentive to
complete a health risk assessment.

Full coverage for preventive care benefits. More employers are covering
preventive medical care and even preventive drugs at 100 percent and not
subjecting these to a deductible. Often included in these fully paid
benefits are vaccinations, exams and screenings for early diagnosis of and
intervention in breast, colon and cervical cancer. Many employers also
provide coverage or partial reimbursement for blood pressure and
cholesterol checkups as well as flu shots.

Health coaches/onsite health centers. A growing number of employers offer
workers access to health coaches and advocates. These experts provide
individualized advice to workers on personal health care needs and can
educate workers about best care and what questions to ask their health care
providers. Another survey by Watson Wyatt and NBGH shows that 44 percent of
large employers offer health coaches and another 13 percent plan to offer
them next year. Additionally, nearly one-fourth of employers have onsite
health centers and another 6 percent plan to open them next year.

More choice to meet individual needs. Employers are offering workers a
variety of benefit options to help meet personal and family needs. Some of
these options are voluntary benefits, such as homeowners, automobile and
group life insurance and discounts on vision and dental care, massage
therapy, chiropractic care, weight-management programs and fitness club
memberships.

More communication/more tools. Employers are enhancing their communication
with workers and providing online tools to help them evaluate and estimate
their health care expenses and needs and manage their personal health care.
The use of corporate portals has become increasingly popular, giving
workers easy access to a wide range of Web-based health care information
that they can use during open enrollment and throughout the year.

More health savings accounts/fewer plan options. Employer interest in
consumer-directed health plans (CDHPs) with health savings accounts (HSA)
continues to grow. Watson Wyatt research shows that 40 percent of companies
will offer workers an HSA next year. At the same time, to reduce
administrative costs, employers are cutting back on the number of health
plan options they will offer workers. More employers plan to offer a
consumer-directed health plan as their only option. The Watson Wyatt/NBGH
survey found that 5 percent of employers now offer a CDHP on a total
replacement basis and another 4 percent plan to do so in 2008.

Scrutiny of spousal/dependent coverage. Companies are paying closer
attention to workers who enroll their spouses and dependents in their
health benefits. Some companies require employees to pay higher premiums
for spousal coverage when their spouse is eligible for other health care
coverage. And some companies are conducting eligibility audits and asking
workers to provide proof that the dependents they enroll in the health plan
are considered legal dependents.

About Watson Wyatt Worldwide

Watson Wyatt (NYSE: WW) is the trusted business partner to the world’s
leading organizations on people and financial issues. The firm’s global
services include: managing the cost and effectiveness of employee benefit
programs; developing attraction, retention and reward strategies; advising
pension plan sponsors and other institutions on optimal investment
strategies; providing strategic and financial advice to insurance and
financial services companies; and delivering related technology,
outsourcing and data services. Watson Wyatt has 7,000 associates in 31
countries and is located on the Web at www.watsonwyatt.com.