Health Insurance Service Experience More Important Than Cost to Employers

Employers aren’t just looking for low prices; they want stellar service from their health insurance carriers.

Published: Tuesday, June 29, 2010 - 15:08

(J.D. Power and Associates: Westlake Village, CA) -- Even as health care insurance premiums continue to skyrocket, the service experience has more effect than cost management on overall employer satisfaction with their primary health insurance carrier, according to the J.D. Power and Associates 2010 U.S. Employer Health Insurance Plan Study, released June 29.

The inaugural study examines overall satisfaction of small business owners, employer benefits administrators, and human resources executives with contracted health plans and pharmacy benefits managers. The study measures five key factors that affect employer satisfaction with carriers. In order of impact on the overall experience, they are: employee plan service experience, account servicing, product offering/product design, problem resolution, and cost/cost management.

The study finds that, in general, employers express relatively low levels of satisfaction with their primary health insurance carrier. Overall satisfaction averages 611 on a 1,000-point scale—even less than the already low levels of satisfaction among health plan members in the J.D. Power and Associates 2010 U.S. Member Health Insurance Plan Study. However, CIGNA, Kaiser, and other regional health plans perform particularly well in the employer study.

“Clearly, there is plenty of ground to be gained in terms of improving the employer experience,” says Rick Millard, senior director of the health care practice at J.D. Power and Associates. “Employers aren’t just looking for cost management. As in similar industries with low satisfaction levels, cost diminishes in importance when other aspects of the service experience are improved—which could have a huge impact, given how difficult it has been for health plans to contain costs.”

The incidence of problems with insurance carriers is relatively high. Some 79 percent of employers report experiencing a problem or issue with their health insurance carrier during the past 12 months. In comparison to another industry in which J.D. Power measures satisfaction, approximately one-third of small-business banking customers report having experienced a problem with their primary bank during the past year.

“Given the high incidence of issues requiring employers to contact their carrier, the efficiency of the problem-resolution process is a highly critical aspect of their overall experience,” says Millard. “More than 80 percent of employers that contact their carrier do so because they have a problem or issue to address, and for those that experience a problem, its resolution becomes the most important aspect of their overall carrier experience.”

The study also finds that 61 percent of employers have used their insurance carrier for five years or fewer. Most employers indicate that lower rates or the physician network are the most important reasons for selecting their current primary health insurance carrier.

“Although most employers haven’t actually switched carriers during the past five years, nearly one-half have said they actively investigated switching,” says Millard. “However, 60 percent say they find it at least somewhat difficult to switch, which indicates that many employers may be less than satisfied with their carrier but are prevented from switching because of issues such as limited choices and time constraints.”

The 2010 U.S. Employer Health Insurance Plan Study is based on responses from nearly 4,800 employers. The study was fielded online in February and March 2010 and includes performance by carrier for Aetna, CIGNA, Humana, Kaiser, UnitedHealthcare, and WellPoint/Anthem. Aggregate performance of other regional health plans and not-for-profit Blue Cross Blue Shield licensees are also assessed for comparison purposes.

About The Author

J.D. Power and Associates

J.D. Power and Associates is a global marketing-information services company operating in key business sectors across a variety of industries. It provides customer satisfaction research, market research, automotive forecasting, social media research, and performance improvement programs. Established in 1968, the company has been listening to consumers and business customers, analyzing their opinions and perceptions, and refining research techniques and study methodologies to offer some of the most advanced product quality, customer satisfaction, and tracking research available. The company’s quality and satisfaction measurements are based on responses from millions of consumers annually. J.D. Power and Associates is a business unit of the McGraw-Hill Companies.