The financial condition of many multiemployer health plans improved between 2006 and 2015, despite the challenges of increasing health benefit costs and a rising number of covered retirees, a recent report shows.
The Multiemployer Health Plan Landscape: A Ten Year Look (2006-2015), the second annual report in a series, shows that the ratio of active to retiree participants decreased during the ten-year period, making it increasingly difficult for trustees to manage financial shortfalls for retirees. In addition, health benefit costs rose consistently, spurring increases in employer and worker/retiree contributions.
Plans in the Study
The total number of multiemployer health plans in the study declined steadily from 1,811 for the 2006 plan year to 1,594 in 2015. The majority of health plans--ranging from 52.1% to 59.0% during the ten-year period--offer dental, vision and life benefits in addition to health benefits. Of the plans in this study, 60% are in the construction industry, 13.7% in the transportation industry, 7.2% in the retail and wholesale industry, and 6.9% in the manufacturing industry.
Health plans may cover active participants, retired participants or both. The majority of plans--ranging from 68.9% to 71.9% over the ten-year period--cover both active and retired participants, while more than one-quarter of all plans--ranging from 26.8% to 28.9% between 2006 and 2015--cover only active participants. The percentage of multiemployer health plans covering retirees has increased slightly over the decade, from 71.1% to 73.2%.
The plans in the study cover more than five million active and retired participants. Focusing on larger plans, 6.0% have at least 10,000 participants, 2.4% have at least 20,000 participants and 1.5% have 30,000 participants or more. Conversely, one-half (50.5%) of plans have fewer than 1,000 participants, nearly one-third (32%) have fewer than 500 participants and 6.4% have fewer than 100 participants. The median number of plan participants is 873, while the average number of plan participants is 3,250.
The plans in the study reported more than 210,000 contributing employers. Among larger plans, 5.5% have at least 500 employers, 2.2% have at least 1,000 employers, and 0.5% have 2,000 employers or more. More than two in five (42.5%) have fewer than 50 employers, and 24.8% have fewer than 25 contributing employers. The median number of employers is 41, while the average number of employers is 150.