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Consumer-directed health plans now second most popular employer-sponsored plan

Consumer-driven health plans (CDHPs) were offered by 58 percent of employers in 2011, making them the second most popular health benefits option for the first time, according to an Aon Hewitt survey of more than 2,000 employers.

Health maintenance organization (HMO) plans had been the second most popular benfits design option, but are now offered by only 38 percent of employers. Preferred provider organizations continue to be the most popular plan design, offered by nearly four-in-five (79 percent) of employers.

“As employers struggle to address unsustainable increases in healthcare 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,” said Maureen Fay, senior vice president and head of Aon Hewitt's CDHP working group, in a press release announcing the study findings. “Consumer-driven health plan designs are becoming increasingly popular among employers because they provide them with a vehicle for promoting consumerism and a framework for educating and motivating employees to actively engage in understanding and managing their health.”

Of the employers offering CDHPs, more (34 percent) offer health savings accounts (HSAs) than the 18 percent that offer health reimbursement accounts (HRAs), though employee uptake of these options is skewed toward HRAs. When offered, 43 percent of employees enrolled in HRAs, while only 28 percent chose HSAs. Aon Hewitt noted that this is due to the popularity of HRAs with larger employers who are embarking on a full replacement CDHP strategy, as they allow for a more flexible plan design than do HSAs. HSA adoption is further depressed as HSAs are often one among several plan options for employees to chose and therefore generate lower enrollments.

Aon Hewitt's survey found, however, that enrollment in CDHPs still lags behind PPO and point-of-service (POS) plans. The average enrollment in a PPO plan was 69 percent in 2011 followed by 49 percent in POS plans. This compares with 43 percent enrolled in a high-deductible CDHP with an HRA and 28 percent enrolled in a high-deductible CDHP with an HSA.

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

A growing number of employers are also considering using voluntary/elective benefits to supplement these plans, such as critical illness, hospital indemnity and accident insurance policies. Of those currently using this tactic, more than a quarter (26 percent) can attribute a significant-to-moderate increase in CDHP enrollment due to the availability of voluntary or supplemental medical benefits. While just 6 percent of employers use voluntary/elective benefits today to complement the CDHP and encourage enrollment, 42 percent report they are considering this approach in the next few years.

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