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Consumer Driven Health Plans – Now 2nd Most Popular

Consumer-driven health plans (CDHPs) are becoming increasingly popular among employers because their design helps to educate and motivate employees to become more engaged in managing their health and well-being.

 

In 2011, 58% of employers offered a CDHP and 38% offered HMO plans, according to an Aon survey of nearly 2,000 U.S. employers representing more than 20 million U.S. employees and their dependents.  PPOs continue to be the most popular plans, with 79% of employers offering them in 2011.  Of those employers that offer CDHPs, the survey shows a higher number of employees enrolling in HRAs (43%) compared to HSAs (28%).

Prevalence of Plan Types
PPO plans 79% of employers
CDHPs 58%
HMOs 38%
POS plans 15%
Indemnity plans   5%
Source: Aon Hewitt.

 

CDHP Plans by Type
High-deductible CDHPs  with health savings accounts (HSAs) 34% of employers
High-deductible CDHPs with health reimbursement arrangements (HRAs) 18%
High-deductible CDHPs  without a company-sponsored savings account   6%
Source: Aon Hewitt.

In order to provide incentive for employees to enroll in these CDHPs, employers are subsidizing premiums at a higher level than other plan options, covering preventive medications before the deductible and contributing employer funds to the HSA (30%) and HRA (22%). Employees are willing to try CDHPs because they are usually associated with lower premiums, according to a separate survey of 3,000 employees and their dependents by Aon Hewitt, The Futures Company and the National Business Group on Health.

In an attempt to supplement CDHPs, more employers are also considering using voluntary benefits, such as critical illness and accident insurance policies.  While just 6% of employers use voluntary benefits today to complement the CDHP and encourage enrollment, 42% report they will consider this approach in the next few years.

 

Additional CDHP tips:

• As an employer it is important that the right people are in the right plan. Be sure as an employer to identify who in your population is most likely to take advantage of the CDHP.

• Employers should articulate how the plan can benefit employees; how its features can work for them

• Make it easy for employees and their families.  Including removing barriers to care at the point of need through initiatives like value-based plan designs or fully-funding employer contributions to HSA/HRA accounts at the beginning of the year.

For additional information on CDHPs and how to effectively implement a plan design feel free to contact us at 212.695.7463

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Arthur Grutt