Not yet a Member?
HR Magazine is highlighting the next generation of HR leaders.
Is your employee handbook ready for the New Year? With SHRM’s Employee Handbook Builder get peace of mind that your handbook is up-to-date.
30+ HR education programs, including 4 NEW programs on hot topics, are available for registration.
Join us in Chicago for the latest trends and technology in talent management, and what to expect in the future.
A large Midwestern employer that adopted a high-deductible health plan with a health savings account (HSA) for all employees, replacing its traditional health plan, reduced its total health care spending by 25 percent in the first year or $527 per person in the aggregate. In the second year total spending was 8 percent lower than in the year before the organization substituted the HSA, according to a recent study by the nonprofit Employee Benefit Research Institute (EBRI).
The study analyzed claims data from the unnamed employer over a five-year period.
In particular, spending on prescription drugs (pharmacy) and laboratory services was lower by a significant percentage and remained lower for the four years after the organization adopted the HSA plan.
Among other findings noted in EBRI's July 2013 report,Health Care Spending after Adopting a Full-Replacement, High-Deductible Health Plan with a Health Savings Account: A Five-Year Study:
Health insurance coverage with high deductibles (generally in excess of $1,000 for singles and twice that for families) is associated with tax-advantaged savings-account options that can be used to cover out-of-pocket costs for health care services, including HSAs and health-reimbursement arrangements (HRAs). These are often referred to as consumer-directed health plans (CDHPs), and they are intended to encourage employees to make cost-conscious decisions when selecting health care services. To learn more, see the SHRM Online article "Consumer-Driven Decision: Weighing HSAs vs. HRAs."
Although this study represents one of the longest observation periods reported with a full-replacement CDHP (meaning it was the only type of health plan the employer offered) and is one of the few studies with a matched control group, EBRI noted that the findings cannot necessarily be applied to broader populations, since they are based on the experience of a single employer and the study focused on workers with continuous plan eligibility during the study period. However, the data indicate that companies can achieve substantial cost savings by adopting a full-replacement CDHP.
Employers have been using CDHPs for more than a decade, according to the report. In 2012, fully 22 percent of smaller employers, 36 percent of larger employers and 59 percent of jumbo employers offered some type of CDHP, and nearly 1 in 5 workers were enrolled in one. Those numbers are expected to grow in coming years.
Stephen Miller, CEBS, is an online editor/manager for SHRM.
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.
Your session has expired. Please log in again 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 3,200 companies