CHICAGO Employees who fear high out-of-pocket costs aren’t blocking the growth of consumer-driven health plans, as more individuals and employers take advantage of money-saving options in light of rising healthcare costs, according to a survey conducted by Aon Consulting Worldwide, and the International Society of Certified Employee Benefit Specialists.
Generally CDHPs involve a three-tier structure of payment for health care—a tax-exempt health account that an individual uses to pay for health expenses up to a certain amount, a high-deductible health insurance policy that pays for expenses over the deductible, and a gap between those two in which the individual pays any health care expenses out of their own pocket. Over-the-counter medicines are eligible expenses under most CDHPs.
The nationwide study of 470 employers found the number of employers offering CDHPs is on the rise, with 37 percent offering CDH plans, up from 28 percent of employers in 2006 and 22 percent in 2005, the first year this study was conducted.
“This finding shows that the CDH movement continues to grow,” stated Bill Sharon, senior vice president with Aon Consulting and co-author of the survey. As much as 60 percent of employers have more than 10 percent of their employees participating in a CDH plan, up from 53 percent of employers in 2006. Additionally, employee fears about enrolling in this new plan type have decreased. Of those employers offering a CDH plan, 54 percent cited concerns among employees about high out-of-pocket costs as the principal reason for not enrolling in a CDH plan. That figure is down from 66 percent in 2006.
“There is a growing recognition that most employees do not want a medical plan with high out-of-pocket costs,” Sharon said. “Therefore, most companies with CDH enrollments of 40 percent or more have designed CDH plans with out-of-pocket maximums comparable to their more-traditional HMO and PPO plans. In addition, employers have used out-of-pocket cost comparisons to show employees the relative cost advantages of the CDH plan.”
The survey found the CDH plan models and contribution levels to be consistent with 2006. Forty-two percent of employers are using health reimbursement arrangements and 48 percent are using health savings accounts while 10 percent offer both.