Many employers benchmark their health plans against other employers with the same carrier or using nationally available data. But the benchmarking best practice is to compare your plan with others based on plan type, region, employee size, and industry. Without this more granular data, you could be missing key data on exactly how your plan stacks up against your competitors’ plans—and opportunities to more effectively negotiate rates and communicate the value of your benefits to your employees.
Consider a design firm in Georgia that offers a consumer-driven health plan (CDHP). Their premium cost for single coverage is $409 per month.
Using the 2014 Health Plan Survey data, compare this rate in the diagram below with the benchmarks for all plans. You can see that their rate is $77 per month less than the national average. But when compared with other CDHPs in the Southeast region, this employer’s cost is actually $2 per month more expensive than the average. This employer’s cost appears to be higher or lower compared with national and regional benchmarks, depending on which benchmark is used. Yet, this employer’s cost is actually lower than its closest peers’ costs when using the state-specific benchmark, which in Georgia is $413—meaning this employer’s monthly single premium is actually $4 less than its competitors in the state.
Granular data like this can make a big difference when negotiating rates and when planning employee communications about your benefits. For more information to help you benchmark your health plan, click here to request Innovative’s 2014 Health Plan Survey Executive Summary.
