Studies Quantify Savings with Consumer-Driven Health Plans

By Stephen Miller Feb 15, 2010

updated March 2010

In his keynote presentation at the 2010 Employer Health & Human Capital Congress, held Feb. 3, 2010, near Washington, D.C., David Randall, executive director of the Consumer-Driven Health Care, took note of a 2009 survey by health insurer Aetna showing that:

Full replacement consumer-directed health care (CDH) plans—offering health savings account (HSA) or health reimbursement arrangement (HRA) plans as the sole option—saved U.S. employers $21 million per 10,000 enrolled members over five years.

Employers that offered CDH plans as an option along with traditional health plans saved $7 million per 10,000 enrolled members over five years.

Employers that offered CDH plans as an option but who engaged employees for adoption using strategies identified as best-in-class saved $23 million per 10,000 members over five years. (These strategies include a focused and continuing employee education campaign offering wellness programs and incentives for healthy behavior, providing 100 percent coverage for preventive care, and carefully constructing a plan with the right mix of member responsibility.)

Similarly, a 2009 study by insurer CIGNA also found sustained savings from CDH plans. CIGNA found that in the first year, normalized medical trend for CIGNA CDH plans was -3.3 percent vs. +10.6 percent for traditional plans — almost a 14 percent difference. The analysis compared individuals in different types of CIGNA plans with the same employer. The study also showed the lower medical trend for CDH plans continued in subsequent years, and that CDH enrollment covers the spectrum of healthy to chronically ill. (For more on this research, see Cigna Choice Fund Experience Study.)

More Employers Providing CDH Plans

Randall pointed to joint research by AON Consulting and the International Society of Certified Employee Benefit Specialists (ISCEBS) in 2009 indicating that 83 percent of U.S. employers offered HSA or HRA plans to their employees. Although only 17 percent offered a full replacement CDH program, that number is expected to increase significantly in 2010. (For more on the AON/ISCEBS study, see the SHRM Online article, Most U.S. Employers with Consumer-Driven Plans Prefer HSAs.)

Update: More Turn to CDH plans in 2010

Interest in consumer-directed health (CDH) plans continues to expand among large U.S. employers and their workers, according to the 15th Annual NBGH/Towers Watson Employer Survey on Purchasing value in Health Care, conducted by consultancy Towers Watson and the National Business Group on Health (NBGH), a nonprofit association of large U.S. employers. The survey was fieled from November 2009 through January 2010, with responses from 507 employers of 1,000 or more employees that collectively employ 11.5 million workers.

Among the key findings:

Just over half (54 percent) of companies offer a CDH plan in 2010, and that number is expected to grow to 61 percent in 2011.

Nearly half (46 percent) of companies that offer a CDH plan report at least 20 percent of their workers enrolled, an increase of nearly 70 percent in five years.

Companies with higher levels of CDH plan enrollment report lower costs, according to the NBGH/TW survey:

Those with at least 50 percent of their workers enrolled in a CDH plan report average annual costs per employee of nearly $1,000 less than at non-CDH plan companies.

Nearly 60 percent of survey respondents indicate their workers pay premiums that are at least 30 percent less than those for traditional co-pay plans.

Other findings from the NBGH/TW survey include:

In 2010, 38 percent of companies will offer a health savings account (HSA), with an additional 7 percent expected to do so in 2011.

In 2010, 46 percent of employers will provide coverage for use of retail clinics, up from 36 percent in 2009.

In 2010, 57 percent of employers will encourage plans and providers to provide workers with access to online medical records, up from 54 percent in 2009.

Enrollees Up, Too

Enrollment in health plans that incorporate HSAs or other personal health accounts are expected to increase to 45 million by the end of 2012, from 29 million at the end of 2008, according to a February 2010 report by Aite Group LLC, a business research and advisory firm. The account-based plan industry has experienced a compound annual growth rate of about 71 percent over the past four years, Aite Group found. One reason: premiums have been increasing just 3 percent per year for account-based plans, compared with an average of 8 percent for traditional plans, according to Aite Group's report.

Stephen Miller is an online editor/manager for SHRM.

CDH Plans: The Right Health Move
A shift to consumer-directed health (CDH) care may lead to better health decisions, but likely won’t initially be popular among employees, warns Alan Momeyer, VP of HR for Loews Corp.
-- View this video


Communicating About Health Care Consumerism
To show the value of consumer-directed health care, tailor your messages to specific employee groups, says Alexandra Jung, senior VP at AON Inc.
-- View this video

Related Articles:

Employers Take Further Steps to Rein In Health CostsSHRM Online Benefits Discipline, February 2010

Double-Digit Health Care Cost Increases Expected to Continue, SHRM Online Benefits Discipline, February 2010

Most U.S. Employers with Consumer-Driven Plans Prefer HSAs, SHRM Online Benefits Discipline, November 2009

Rebalancing Health Costs, HR Magazine, September 2009

Consumer-Directed Health Plans: By the Numbers, HR Magazine, June 2009

Health Care 'Transparency': Advances Noted; Work Remains, SHRM Online Benefits Discipline, October 2007

Quick Link:

SHRM Online Benefits Discipline

Sign up for SHRM’s free Compensation & Benefits e-newsletter


SHRM 2010 Annual Conference Session:
"Proven Strategies for Tackling Health Care Costs."
Presenter: Jane Cooper, Monday, June 28, 10:45-Noon. Click to view
Conference Agenda.


Job Finder

Find an HR Job Near You
Post a Job


Find the Right Vendor for Your HR Needs

SHRM’s HR Vendor Directory contains over 10,000 companies

Search & Connect