of employers have yet to determineif they will engage a private health insurance exchange for employees and dependents in 2014 or 2015.

95%

towerswatson.com

The massive scope of health care reform is ushering in a wide range of new opportunities for employers seeking to manage costs and improve worker health. While complying with the federal law tops their priorities, they are also evaluating a spectrum of solutions — new health insurance exchanges, advanced provider contracting and care delivery arrangements, and alternative health care plan designs — that will ultimately transform the employer-provided benefit landscape.

Employers Planning Range of Changes

to Health Care Benefits Insights From the 2013 Health Care Changes Ahead Survey

Employers Continue Investment in Health Care Benefits

Employers Expect to Make Moderate to Significant Changes by 2016 Employers are reevaluating their financial commitment due to rising costs and the 2018 excise tax, and will make changes between now and 2016.

Virtually all employers (98%) plan to continue their active medical plans for full-time workers and have no intention of directing them to the public exchanges.

Percentage viewing subsidized health care benefits as an important part of the employee value proposition

2013 2014 2015

80% 82% 72%

Employers Have More Confidence in Private Exchanges Than Public ExchangesThe survey reveals a clear disparity in how employers view public and private exchanges for active full-time employees in 2015.

Employers want to see how well the public health insurance marketplace will operate in its first year and how the broader market will respond. Employers are intrigued by the potential of private exchanges to control cost increases, reduce administrative burdens and provide greater value.

Companies Are Redefining Their Commitment to DependentsEmployee premium contributions for dependent coverage are rising at a higher rate than single-only coverage, with 34% of employers increasing dependent premiums by five or more percentage points.

57%of employers report con�dence that the private exchanges will provide a reliable alternative toemployer-sponsored coverage.

29%of employers report con�dence that the public exchanges will provide a reliable alternative toemployer-sponsored coverage.

Employers Are Evaluating Private Exchange Models for Active Employees They want to see three factors before adopting a private exchange model:

• Evidence that it can deliver greater value than their current self-managed model (74%)

• The actions of other large companies in their industry (56%) • The private exchange’s ability to provide additional health care plan choices to employees (40%)

Companies to Exit Medical Plan Sponsorship for RetireesFor those employers that sponsor a retiree health plan,

38% plan to discontinue it for pre-65 retirees and

44% plan to discontinue it for post-65 retirees in 2015. Many of these companies will look to health exchanges to close the resulting coverage gaps in 2015 or 2016.

are considering directing pre-65 retirees to a public-exchange-based health solution.

are considering providing Medicare-eligible retireeswith a private-exchange-based solution.

45%

32%

About the Survey

This survey was conducted in July 2013. A total of 420 midsize to large orga-nizations across a variety of industries submitted responses. Collectively, respondents employ 8.7 million employees.

Little to no change Moderate change Significant change

Active part-time employees

Active full-time employees Pre-65 retireesGreater changeplanned for retiree medicalcoverage

47%

28% 25%

36%

35% 38%25%

37%

42%33%

25%

29%

Medicare-eligible retirees

Only 14% of employees surveyed believe that the changes their employers will make as a result of health care reform will make them and their families better off. 2013 Towers WatsonGlobal Benefits Attitude Survey (completed by 5,070 U.S. workers)

Increase of five or more percentage points for:

Singlecoverage

2013

Singlecoverage

2014

Dependentcoverage

2013

Dependentcoverage

2014

22% 21%13%

34%