56% of employers offer CDHP, 44% may make it the only choice: Aon Hewitt

Originally posted October 09, 2013 by Jerry Geisel on businessinsurance.com

Once a rarity, consumer-driven health care plans have become a mainstream design among large employers.

Fifty-six percent of midsize to large employers responding to an Aon Hewitt survey released Wednesday said they now offer CDHPs. Such high-deductible plans are linked to health reimbursement arrangements or health savings accounts, which employees can use to pay for a portion of uncovered health care expenses.

The prevalence of CDHPs is expected to grow, as 30% of respondents said they are considering offering a CDHP in three next three to five years.

Because of their high-deductible feature, CDHPs are much less expensive than other plan designs, according to several studies. For example, a Kaiser Family Foundation survey released in August found that the average cost of family coverage through CDHPs was nearly $1,500 less per employee than coverage through a preferred provider organization.

“Employers are increasingly embracing plan designs that are cost-effective, promote consumer choice and accountability, and encourage employees to be more deliberate in how they spend their health care dollars,” Maureen Fay, an Aon Hewitt senior vice president in Norwalk, Conn., said in a statement.

Only health care option for some

In addition, many employers are considering making a CDHP their only health plan choice.

While just 10% of employers now offer CDHPs as their only plan, 44% said they are they are considering doing so in the next three to five years, according to the survey.

The findings are based on the responses of 837 employers, 57% of which had more than 2,500 employees.

Satisfaction with health plan costs improving

Originally posted July 23, 2013 by Andrea Davis on https://ebn.benefitnews.com

Employer satisfaction with health plan costs is going up, according to the J.D. Power 2013 Employer Health Plan Study, yet health plans may risk losing group business unless they improve satisfaction in other areas.

The study, now in its fourth year, measures six factors that affect employer satisfaction with health plans: employee plan service experience, account servicing, program offerings, benefit design, problem resolution and cost. Satisfaction with cost is improving as more consumer-driven health plans are offered to employees, which 82% of employers indicate are controlling costs.

Employer satisfaction with costs “went up significantly in all the attributes we measure. Significantly more employers are offering CDHP products to their employees and so that has been a cost shifting measure that they are satisfied with,” says Scott Hawkins, director, health care, J.D. “But one of the things we see on the member side is that when employees are put on those products and they don’t really understand them, their satisfaction is lower. So I think it’s really important that employers work with the health plans to help their members understand how to manage those costs once they’re on those products or they’re going to have dissatisfied employees.”

Fifteen percent of employers say they “definitely will not” or “probably will not” continue sponsoring coverage in five years.

Perhaps not surprisingly, cost satisfaction among employers that indicate they intend to continue sponsoring coverage in the future is 106 points higher (on a 1,000-point scale) than among those that intend to drop coverage (696 vs. 590, respectively.)

“You can minimize the impact on satisfaction with the members and employees if you offer value-added benefits. And one of the things we’re seeing in our data and the employer data is that while health plans are offering a lot of the primary and secondary services that the employees are asking for, a lot of the employers aren’t taking advantage of those things; they’re not offering them to their employees,” says Hawkins.

Simple things like gym memberships, health risk assessments, drug compliance plans for employees with chronic conditions, for example, “will help satisfy the members and help them feel they’re getting value for what they’re paying,” says Hawkins. “But what we see now is that a lot of plans are offering them to employers, but not many of them are taking them up on it.” He suspects cost is the main reason employers may be reluctant to offer these programs to employees.

In both the fully insured and self-funded groups, employer satisfaction with program offerings, such as preventive health programs, disease management or wellness initiatives, is a key area of differentiation between employers that intend to offer coverage in the future and those that intend to drop coverage. In the program offerings factor, the gap in satisfaction scores between fully insured employers that intend to offer coverage in the future and those that intend to drop coverage is 104 points — 705 among employers that intend to offer coverage, compared with 601 among those that intend to drop coverage. Among self-funded employers, the gap in satisfaction scores between those that intend to offer coverage in the future and those that intend to drop coverage is also 105 points — 689 among employers that intend to offer coverage, compared with 584 among those that intend to drop coverage.

The 2013 Employer Health Plan Study is based on responses from 5,857 employers.


Medical savings accounts on the upswing

By David Albertson

As of 2012 there was $17.8 billion in health savings accounts (HSAs) and health reimbursement arrangements (HRAs), spread across 11.6 million accounts, according to data from the latest EBRI/MGA Consumer Engagement in Health Care Survey, sponsored by the Employee Benefit Research Institute and Matthew Greenwald & Associates.

That’s up from 2006, when there were 1.3 million accounts with $873.4 million in assets, and 2011, when 8.5 million accounts held $12.4 billion in assets.

The balances continue to grow as more employers adopt high-deductible, consumer-driven health plans combined with HSAs/HRAs. However, assumptions about these plans are not always proving true. For example, analysts predicted that individuals given more control over funds for health care services would become more cost conscious as they became more educated about the actual prices of those services. However, according to EBRI, no evidence was found to support this, nor was there evidence that healthy behaviors had any real correlation with account balance.

Among other findings from the EBRI/MGA survey:

After leveling off, average account balances increased. After average account balances leveled off in 2008 and 2009, and fell slightly in 2010, they increased in 2011 and 2012. In 2006, the   average account balance was $696. It increased to $1,320 in 2007, a 90% increase. Account balances averaged $1,356 in 2008 and $1,419 in 2009, 3% and 5% increases, respectively. In 2010, average account balances fell to $1,355, down 4.5% from the previous year. In 2011, average account balances increased to $1,470, a 9% increase from 2010. It increased to $1,534, or 4%, in 2012.

Total and average rollovers increased. After declining to $1,029 in 2010, average rollover amounts increased to $1,206 in 2011 and remained there in 2012. Total assets being rolled over increased: $9.7 billion was rolled over into HSAs and HRAs in 2012, up from $6.8 billion in 2011. The percentage of individuals without a rollover was 11% in 2012.

Differences in account balances. Men have higher account balances than women, older individuals have higher account balances, account balances increase with household income, and education has a significant impact on account balances, independent of income and other variables.

Individual providers of HSAs likewise report significant growth in account balances over the past year, and bullish expectations for additional increases.

Among the HSA leaders, UMB Healthcare Services, a division of UMB Financial Corporation, announced that account balances for its HSAs grew 55% during the previous 12 months, surpassing $615 million dollars as of Jan. 31, 2013. The number of HSAs also grew to nearly 320,000 individual accounts, up dramatically from the 220,000 following open enrollment last year.

UMB Healthcare Services also saw a 29% increase in the number of debit cards it provides for Flexible Spending Accounts (FSAs), HRAs) and HSAs. Today, the number of cards in circulation has grown to more than 2.8 million.

According to the January 2012 annual census by America’s Health Insurance Plans’ Center for Policy and Research, the number of people with HSA/HDHP coverage rose to more than 13.5 million, up from 11.4 million in January 2011.

“Our HSA growth continues to reflect the trend we are seeing nationwide as more individuals and employers move toward consumer-directed health accounts,” said Dennis Triplett, CEO of UMB Healthcare Services. “We are now challenged with educating the growing number of employers and account holders on all that these accounts can offer toward future financial stability, beyond day-to-day health care expenses.”

Source: https://ebn.benefitnews.com/news/medical-savings-accounts-on-upswing-2731569-1.html


CDHPs increasingly popular among employers

By Marli D. Riggs

Source: https://eba.benefitnews.com


Consumer-driven health plans have bypassed health maintenance organizations to become the second most common plan design offered by U.S. employers, according to an Aon Hewitt survey.

CDHP designs are becoming increasingly popular among employers because they provide the framework needed for educating and motivating employees to actively engage in managing their health and wellbeing, according to Maureen Fay, senior vice president and head of Aon Hewitt's CDHP working group.

In 2011, 58% of employers offered a CDHP and 38% offered HMO plans, according to the 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.

“As employers struggle to address unsustainable increases in health care spend, they can no longer rely on traditional methods of tweaking plan designs like increasing copays and deductibles or increasing employee payroll contributions for medical coverage,” says Fay. “Employers are beginning to explore innovative solutions that focus on both the short-term need to manage health care costs and the longer-term requirement to change underlying behavior patterns, shifting the focus from ‘caring for the sick’ to ‘actively managing the health of their employees.’”

A growing number of employers are also considering using voluntary benefits, such as critical illness and accident insurance policies, to supplement CDHPs. More than a quarter (26%) can attribute an increase in CDHP enrollment to the availability of voluntary or supplemental medical benefits. 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.

Among employers that offer CDHPs, health savings accounts outpace health reimbursement arrangements, 34% to 18%, respectively. However, the survey shows a higher number of employees enrolling in HRAs (43%) compared to HSAs (28%). HRA plan designs are popular among large employers embarking on full replacement CDHP strategies, as they offer more design flexibility to the employer than HSA designs.

Employers are using a variety of tactics to encourage employees to enroll in CDHPs, including subsidizing premiums at a higher level than other plan options (36%), covering preventive medications before the deductible (34%) and contributing employer funds to the HSA (30%) and HRA (22%).

Employees are willing to try CDHPs and their associated accounts, and will continue to choose them because they often come with a lower premium, 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.   However, employees find the plans challenging to understand and use.

“Employees want to choose the most cost-effective plan with the least hassle, but they often have very full lives and are not all that interested in digging into the details of CDHPs, HSAs and HRAs,” says Joann Hall Swenson, partner and health engagement best practice leader at Aon Hewitt. “Our research and experience tells us that simply giving employees lots of educational information about these plans and accounts is only helpful to the small minority of people who like all the details.”

To address this, she offers employers the following tips:

• Make sure the right people are in the right plan. Employers need to identify segments of their population most likely to value and take advantage of the unique features of the CDHP, and tailor the marketing to them. They also need to monitor employees’ day-to-day experience of using the plan to ensure it “re-sells” itself and engages consumers in the appropriate financial and health behaviors.

• Reinforce the plan’s actions and advantages. Employers should articulate what’s in it for employees; how they can benefit from the plan’s key features, and be very specific about the actions they need to take.

• Make it easy for employees and their families.  This includes 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.

To be effective, employers must also provide tools and support throughout the year so more employees and their families can learn how to:

• Participate in activities to help them assess their health opportunities and risks such as health risk assessments and biometric screenings.

•  Navigate new tools to help them make smart choices in selecting appropriate treatments.

• Leverage behavioral and clinical resources like disease management nurses and health coaches to help set and make progress toward health improvement and maintenance goals.

• Follow preventive care guidelines to stay their healthiest.

• Manage chronic conditions by working closely with their physician and adhering to evidence-based treatment protocols.


Most Employees Not Given a Choice of Health Plans


Most Americans get their health insurance coverage from employment-based plans, yet most employers do not offer a choice of health plans, according to the Employee Benefit Research Institute (EBRI).

In 2011, 84% of employers with health benefits offered only one plan; 15% had two choices; and 1% offered three or more options. Large firms were more likely to offer a variety of health plans than small firms; 42% of large firms gave two or more choices, compared with 15% of smaller firms. As a result, nearly one-half (47%) of covered workers had a choice of health plans, and according to the 2011 EBRI/MGA Consumer Engagement in Health Care Survey, 59% of adults ages 21 to 64 with employment-based health coverage had a choice of health plans.

Among individuals covered by an employment-based health plan, those in consumer-driven health plans (CDHPs) were more likely than those with traditional coverage to be given options. In 2011, 68% of CDHP enrollees had a choice of health plans, compared with 59% of individuals in traditional plans, and 48% of those with high-deductible health plans (HDHPs).

The greater variety for CDHP enrollees may be due to the fact that an increasing percentage of the CDHP population works for an employer with 500 or more employees and large employers tend to offer more benefit options, EBRI said in its July Notes.

Asked about the main reasons for enrolling in their plan, 50% of CDHP enrollees reported they chose that offering because of the lower premium, while 45% said the opportunity to save money in the account for future years was a primary concern. Among individuals with traditional health coverage, 39% cited the good network of providers and 32% reported the low out-of-pocket costs as the main reasons for enrolment.

Among individuals with a choice of plans, CDHP and HDHP enrollees were less likely than those with traditional coverage to say they were extremely or very satisfied with the quality of care received.

More information can be found in the July EBRI Notes at https://www.ebri.org.


Consumer-driven health plans (CDHPs) can play a major role in persuading employees to adopt healthier lifestyles and save health care dollars, according to a new analysis by the Health Care Service Corp. The study found that CDHP enrollees were four times more likely to take advantage of preventive services and 10 percent more likely to fill their prescriptions with generics.