Tag: Consumer Driven Health Plans

Employers turn to high-deductible health plans as benefit option: Survey

Editor note: This article originally appeared here.

Nearly half of small and midsize employers will include a high-deductible health plan among their group health benefit options by 2015, according to a survey by Itasca, Ill.-based Arthur J. Gallagher & Co.

High-deductible health plans were the second-most common coverage offering among the 957 employers polled in Gallagher’s “2013 Benefit Strategy and Benchmarking Survey,” with 34% currently offering high-deductible plans to their employees alongside more traditional plan types.

Among employers not currently offering coverage through an HDHP — also known as a consumer-driven health plan — nearly 23% said they plan to do so by next year, according to an executive summary of the survey released Thursday.

Seventy-seven percent of employers offer coverage through a preferred provider organization, while 32% offer a health management organization plan, according to the survey.

More than 92% of the employers polled in Gallagher’s study had fewer than 5,000 full-time workers, according to a spokesman for the brokerage, and 75% had fewer than 1,000 workers. The full study results will be published Monday.

Drive to control costs

The prevalence of small and midsize employers concerned about controlling health care costs in the near term — with 80% of all employers in the survey ranking it among their top three challenges for 2014 —likely is a key driver in the growing interest in high-deductible plan designs.

“Finding the right balance between maintaining an engaged workforce and effectively managing the total cost of that workforce was a key focus for all organizations,” Sean Schubert, Gallagher’s vice president of sales and marketing, said in a statement.

While they appear to be gaining in popularity as a coverage option among employers, employee enrollment in HDHPs remained relatively low in 2013, according to the study. Less than 15% of employers polled said their HDHP was their most popular plan offering, compared with 58% that said their PPO option drew the greatest number of enrollees.

About one in five employers said their HMO was their most popular plan among their workers.

Do you have questions about high-deductible health plans? Click here to contact us.

Satisfaction Levels Rise for Consumer-Driven Health Plans, Slip for Traditional Coverage

Editor Note: This article originally appeared here.

Americans with health insurance appear to be warming up to so-called consumer-driven health plans, even as the traditionally greater popularity of traditional health plans is slipping, according to new research from the nonpartisan Employee Benefit Research Institute (EBRI).

Based on seven years of surveys, the EBRI/MGA 2012 Consumer Engagement in Health Care Survey finds that traditional plan enrollees were more likely than those in consumer-driven health plans (CDHPs) and high-deductible health plans (HDHPs) to be extremely or very satisfied with the overall plan in all years of the survey. However, satisfaction levels trended up in most years of the survey among CDHP enrollees and trended down among traditional-plan enrollees.

Enrollees in CDHPs and HDHPs were much more likely to report that they were not too or not at all satisfied with their health plan, but those dissatisfaction levels appeared to be trending downward in most years of the survey, said Paul Fronstin, director of EBRI’s Health Research and Education program, and author of the report.

“Dissatisfaction with out-of-pocket costs may have been driving these overall satisfaction trends,” Fronstin explained. In 2012, 44 percent of traditional-plan participants were extremely or very satisfied with out-of-pocket costs for health care services other than for prescription drugs, while 18 percent of HDHP enrollees and 27 percent of CDHP participants were extremely or very satisfied.

“Satisfaction rates for out-of-pocket costs were much higher among those with traditional coverage than among those with either an HDHP or CDHP, though regardless of plan type, satisfaction with out-of-pocket costs was consistently low,” noted Fronstin. “However, satisfaction rates do appear to be trending upward for those with a CDHP.”

Yet, in 2012, the survey continued to find that individuals in a CDHP or an HDHP were less likely than those in a traditional plan both to recommend their health plan to friends or co-workers and to say they would stay with their current plan if they had the opportunity to switch. Those findings may have been driven more by out-of-pocket spending than by quality or access to care, noted Fronstin.

The full report is published in the August EBRI Notes, “Satisfaction With Health Coverage and Care: Findings from the 2012 EBRI/MGA Consumer Engagement in Health Care Survey,” online at www.ebri.org.

One in five employers will offer only CDHP in 2014: Survey

Editor Note: This article originally appeared here.

More large employers are reducing the type of health care plans they offer as they try to keep better control of their costs, according to a survey released Wednesday [August 28, 2013].

Next year, 22% of employers responding to a National Business Group on Health survey say consumer-driven health plans will be the only plan design they offer to employees.

That compares with 19% this year and is triple the percentage of employers that offered only CDHPs in 2009.

The appeal to employers of a CDHP-only approach is obvious: Because of their high deductibles, the plans are much less expensive than more traditional plans, such as preferred provider organizations. A Kaiser Family Foundation released last week found that the average cost of family coverage through CDHPs was nearly $1,500 less per employee than PPO coverage.

“Employers will do everything they can to reduce medical trend,” NBGH President and CEO Helen Darling said during a briefing on the Washington-based group’s survey.

Health reform law driving changes

Provisions in the 2010 health care reform law are a big factor driving employers to keep better control of their costs, Ms. Darling said.

For example, a 35% excise tax will be imposed on health care plan costs that exceed $10,200 for individual coverage and $27,500 for family coverage effective in 2018 under the law.

Employers said they have to start to take action now to control costs so their plans won’t hit the ceilings that will trigger the tax, Ms. Darling said.

Employers are considering other actions to better control health care costs, according to the survey.

Instead of directly offering coverage, 40% of employers said they are considering, in 2015 or later, moving retirees to private exchanges, where retirees would purchase coverage from participating insurers.

Under that approach, employers specify how much they will pay toward a premium, limiting their liability to a fixed amount. Just 10% of respondents now utilize such an approach.

While employers face new costs under the Patient Protection and Affordable Care Act, the law also could open the door for employers to save costs in other ways.

For example, under proposed Internal Revenue Service regulations, lower- and middle-income employees and dependents eligible for COBRA coverage could opt instead for policies written by insurers and offered in public exchanges, with the federal government subsidizing the premiums.

That would save COBRA beneficiaries money since they now pay the full COBRA premium. Employers would save as well, since those opting for COBRA tend to use more health care services than active employees.

In fact, 41% respondents in the NBGH survey said COBRA beneficiaries will choose exchange coverage rather these opt for COBRA.

The survey is based on the responses of 108 employers.

Decoding the Alphabet Soup: CDHPs, HDHPs, HSAs, FSAs & HRAs

With all the acronyms out there these days–specifically when it come to healthcare–it is easy to get overwhelmed.

If you have ever asked yourself what is the difference between a CDHP, an HDHP, an HSA, an FSA, or an HRA, or you do not even know how any of this could benefit you or your employees–take a look at this short, entertaining video explanation to start.

Then, as a pioneer in the industry and considered to be among the top health services administrators in the country, Sterling HSA is here to help you take the next step. Please contact us for more information, to discuss your options and to determine which services best fits your individual needs.

A short video explanation of CDHPs, HDHPs, HSAs, FSAs & HRAs