Get access to the exclusive HR Resources you need to succeed in 2018.
Sign up for free email newsletters and get more SHRM content delivered to your inbox.
Is your employee handbook keeping up with the changing world of work? With SHRM's Employee Handbook Builder get peace of mind that your handbook is up-to-date.
Build competencies, establish credibility and advance your career—while earning PDCs—at SHRM Seminars in 14 cities across the U.S. this fall.
Gain the skills you need to rise to the next level in your career. Jon us at SHRM's Leadership Development Forum, October 2-3 in Boston.
Plus, tips for a CDHP full-replacement communications strategy
Members may download one copy of our sample forms and templates for your personal use within your organization. Please note that all such forms and policies should be reviewed by your legal counsel for compliance with applicable law, and should be modified to suit your organization’s culture, industry, and practices. Neither members nor non-members may reproduce such samples in any other way (e.g., to republish in a book or use for a commercial purpose) without SHRM’s permission. To request permission for specific items, click on the “reuse permissions” button on the page where you find the item.
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:
is an online editor/manager for SHRM.
SHRM Online Health Care Reform Resource Page
• Sign up for SHRM’s free
Compensation & Benefits e-newsletter
You have successfully saved this page as a bookmark.
Please confirm that you want to proceed with deleting bookmark.
You have successfully removed bookmark.
Please log in as a SHRM member before saving bookmarks.
Please sign in as a SHRM member before saving bookmarks.
Please purchase a SHRM membership before saving bookmarks.
An error has occurred
Recommended for you
Choose from dozens of free webcasts on the most timely HR topics.
SHRM’s HR Vendor Directory contains over 10,000 companies