Small firms want individualized attention

September 1, 2011

Health plans that want to please employers need to understand that cost is only one factor in determining employer satisfaction.

IT'S NOT JUST about money. Health plans that want to please employers need to understand that cost is only one factor-and not even the primary one-in determining employer satisfaction, according to the second annual J.D. Power and Associates U.S. Employer Health Insurance Plan Study.

The study examines overall satisfaction with contracted health plans and is based on responses from more than 7,000 small, medium and large employers. The study measures five key factors that influence employer satisfaction with carriers: employee plan service experience; account servicing; product offering/benefit design; problem resolution; and cost management.

In the fully insured plan segment, Kaiser Permanente ranked highest in employer satisfaction with a score of 714 on a 1,000-point scale. Among self-insured plans, UnitedHealthcare came out on top with a score of 665. But that doesn't necessarily mean they were the most affordable plans on the block.

Indeed, having a plan representative who understands the employer's specific business needs; customized cost management solutions and feedback on their performance; and accurate and efficient claims processing were key factors in employer satisfaction.

Employers don't want a one size fits all solution, Millard says. They want a plan representative who understands and works to address the needs of their unique employee populations.

That might seem like a no-brainer, but only 56% of fully insured companies said their carrier representative understood their specific business needs, Millard says. Satisfaction was particularly low among small employers who feel plans ignore their individual needs and lump them into a "small business" category. While one might expect companies with self-funded plans to feel better understood, only 48% of self-insured companies said their carrier understands their needs. Millard theorizes that self-insured plans may have higher expectations.

"When you're self-funded and you have more skin in the game, your standards may be a little higher," he says.

Employers want their health plans to provide ample communication and periodic feedback as well. Only 29% of fully insured employers said they were offered customized cost reports and satisfaction among those employers was noticeably higher. For their part, self-funded employers were concerned that final cost quotes were in line with initial estimates.

"Employers want more frequent status reports and feedback," Millard says. "You can implement a cost management program, but if you're not getting periodic feedback then it's not giving you much."

Accurate, efficient account servicing is essential as well. Mistakes in claims processing and enrollment cards are hot-button issues for employers. Satisfaction levels for fully insured employers plummeted when claim processing accuracy fell below 95%, while self-insured employers lost patience when the error rate on enrollment cards reached 3%.

Finally, Millard notes, there appears to be another important factor of employer satisfaction: satisfied employees. Citing a J.D. Power survey of employees published in March, Millard says high employee satisfaction with a plan tends to coincide with high employer satisfaction.

"The real conclusion is that if employees like their health plan, it's fairly likely that employers will, too," he says.

Plans are going to have to pay closer attention to the service experience if they want to market to employers. They can't just offer the lowest rate in the community and expect to win more business, he says. The service experience is the key to retaining clients.

-Shelly Reese