Consumer-directed health plans (CDHPs) in the U.S. continued to grow in 2010, albeit at a slower rate than in 2009, according to preliminary results from United Benefit Advisors' 2010 UBA Health Plan Survey, benchmarking 17,113 plans from 11,413 U.S. employers.
CDHPs grew at a rate of 18.1 percent in 2010, about half that of 2009. One reason: Employers were uncertain whether health care reform would restrict consumer-directed plans. As it turned out, the reform legislation enacted in March 2010 does not directly address the use of health savings accounts (HSAs) or health reimbursement arrangements (HRAs), with the exception of increasing the penalty for nonqualified (that is, nonmedical) HSA distributions from 10 percent to 20 percent of the funds withdrawn inappropriately, as of Jan. 1, 2011.
The United Benefit Advisor (UBA) survey shows that:
• In 2010, CDHPs provided health coverage for 12.4 percent of all insured U.S. employees, while health maintenance organizations (HMOs) covered 15.4 percent of insured employees. The lion's share of coverage remains with preferred-provider plans (PPOs), which insured nearly two-thirds of all enrolled employees (65.7 percent).
• The Northeast region of the U.S. had the largest concentration of CDHPs (26.7 percent), followed by the Southeast region (22.9 percent).
• The average 2010 cost increase for all CDHPs at 7.3 percent was slightly lower than that of the average of all plan types, which increased 8 percent.
Employers often offset the higher out-of-pocket costs of CDHPs by offering employees an HRA or HSA and contributing funds. The 2010 UBA Health Plan Survey found that the average employer contribution to an HRA was $1,481 (up from $1,310 in 2009) for a single employee and $2,857 for a family (up from $2,502 in 2009).
“The trend toward employee empowerment and participation continues in 2010 when it comes to health care,” said Bill Stafford, UBA vice president for member services. “Employees are taking more control over health care expenditures by increasing participation in CDHPs, and they are realizing that there are financial benefits—in addition to health benefits—of participating in wellness programs.”
He added, “In spite of passage of health care reform legislation, health care costs will continue to increase. There has been little coming out of Washington to date that addresses the underlying health care issues that can help control costs.”
Other highlights from UBA's survey include findings that:
• For plans with employee contributions, the average employee contribution (for all plan types) was $113 for single coverage and $443 for family coverage.
• More than three-fourths of all wellness plans (77.1 percent) offered a health risk assessment.
• Of all plans in the U.S. Northeast, 81.7 percent had 100 percent co-insurance.
• 52.9 percent of all covered employees elected to cover their dependents.
The 2010 UBA Health Plan Survey was fielded Oct. 1, 2009 to June 4, 2010, through the independent benefit advisory firms that comprise UBA. While other surveys primarily target large U.S. employers, UBA notes that its survey focuses on reporting results that are applicable to the small to midsize companies that represent the overwhelming majority of the nation’s 5 million-plus employers, with a mix of larger companies in rough proportion to their prevalence nationally.
Stephen Miller is an online editor/manager for SHRM.
Future Bright for Health Savings Accounts, Says Policy Analyst, SHRM Online Benefits Discipline, September 2010
Reform Predicted to Drive Increase in Health Care Consumption, SHRM Online Benefits Discipline, September 2010
Just the Stats: What's Known About Consumer-Driven Health Plans, SHRM Online Benefits Discipline, August 2010
Large Employers Project 2011 Health Plan Costs to Rise 8.9%; Shift to Consumer-Directed Health Plans Continues, SHRM Online Benefits Discipline, August 2010
Enrollees in Health Reimbursement Arrangements Spend Less, GAO Finds, SHRM Online Benefits Discipline, August 2010
Reform Creates Opportunities, Uncertainties for Consumer-Directed Plans, SHRM Online Benefits Discipline, March 2010
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