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Plus, tips for a CDHP full-replacement communications strategy
U.S. employees saved an average of $187 a year in total out-of-pocket costs by using a high-deductible consumer-driven health plan (CDHP). Families saved an average of $204 a year by using a CDHP, according to 2011 data compiled by HighRoads, a provider of health care costs and compliance services, and the Corporate Executive Board, a research and advisory services company.
While CDHPs provide savings in premiums and in overall maximum out-of-pocket exposure, the savings might be too small and the deductible too high relative to traditional preferred provider organization (PPO) plans and health maintenance organization (HMO) plans to encourage a larger percentage of employees to switch to a CDHP. As such, PPOs remain the most popular health care plan offering.
The 2011 data, from over 10,500 medical plan designs and rates representing over 30 million Americans, revealed the following trends:
The data shows "that employee education around the cost savings possible with CDHPs may help many employees reduce their out-of-pocket health care expenses while offering them increased flexibility and control over their health care decisions,” said Eric Parmenter, vice president of consulting at HighRoads.
The Shift to Full-Replacement CDHPs: Implementation Tips
Because encouraging employees to enroll in a CDHP may not provide sufficiently high enrollment numbers for significant cost reduction, more companies are considering offering only one or more CDHPs.
According to a 2011 Towers Watson/National Business Group on Health study, 8 percent of employers offered full-replacement CDHPs to at least a portion of their workforce. It’s anticipated that this rate could reach nearly 13 percent by 2012 if companies follow through with their current health plan strategy.
“Before companies make the commitment to full-replacement CDHP, there are a number of factors they need to consider," advised Jennifer Benz, founder and CEO of Benz Communications, an HR communications strategy boutique.
"They need to look at the needs of low-income employees, especially those with families, and ensure they are protected from high out-of-pocket costs with a generous employer contribution to the health savings or health reimbursement account. They also need to weigh the challenge of doing a full replacement against the opportunity to drive high voluntary participation in CDHPs through well-crafted plan design, costs and communication.”
To help companies successfully implement a full-replacement CDHP, Benz suggested the following:
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