For First Time Since ’07, Fewer CDHPs Offered

Interest in consumer-directed health plans lost steam last year, with the number of employers offering such plans declining for the first time since 2007, according to United Benefits Advisors, a benefit survey organization.

The 2012 UBA Health Plan Survey calls this a critical trend that its employer customers should consider “when making health plan purchasing decisions.” (The survey is to be released November 1.)

UBA’s survey of nearly 12,000 employers, representing 1.1 million employees and 5 million covered lives, finds that businesses offering CDHPs declined from 22.9 percent in 2011 to 22.5 percent in 2012. In addition, the number of employees enrolled in CDHPs declined from 17 percent to 16.6 percent.

“It is likely that many employers were in a holding pattern pending the Supreme Court decision related to the Affordable Care Act,” says Elliot Dinkin, president and CEO of Cowden Associates, one of UBA’s member companies. “As a result, there may have been fewer employers changing their plans. CDHPs can be used as a sustainable plan design for cost containment, but as evidenced by the survey, it will not reduce employer costs.”

That perhaps might be the most surprising finding. UBA has tracked costs of different plan types since it began its survey in 2003.

“Specifically we modeled the past seven years of plan data year by year and in the aggregate at $500 increments of deductible and found that in virtually every year and at every deductible level, there was no significant difference in the average annual cost of CDHPs vs. other plan types,” says Dinkin. “CDHPs should be considered along with any total compensation plan for addressing health care reform. It may be a more desired option for certain employee groups, but not for all.”

Here are other findings:

  • The average renewal for all plan types increased by 5 percent.
  • PPO plans have nearly two thirds of all enrolled employees (61.7 percent).
  • The average monthly employee contribution for all plan types is $126 for single and $494 for family.
  • The average employer contribution to a health reimbursement arrangement (HRA) was down from 2011 for a single employee and up for a family.
  • Employer health savings account (HSA) contributions continued to decline.
  • Four fifths of all wellness plans (81 percent) offered a health risk assessment.
  • As a direct result of the ACA changes, 91.7 percent of all plans now offer an unlimited lifetime maximum benefit, compared with 81.3 percent in 2011 and just 16.1 percent in 2010.
  • Forty-eight percent of all covered employees elected to insure their dependents, a decline of 1.9 percent.

Regional variations are noted as well, but they are almost expected. “The Northeast and West have historically offered greater first-dollar health plans, where the central part of the country more quickly adopted deductible-based offerings,” says Dinkin. “Most recently, the Northeast employers, which have historically been in the highest-cost area of the country, have had more rapid growth in CDHPs as a cost control method.”

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