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As CDHPs Grow More Prevalent, Savings Will Probably Decline

As enrollment in consumer-directed health plans grows, employers will find diminished savings. “For the first time in more than seven years of reporting, CDHPs nationally did not create a savings [for the employer] over the previous plan offering,” says Bill Stafford, vice president for member services at United Benefits Advisors.

Actuaries and statisticians call it “regression to the mean.” Stafford says that when plan offerings are new it takes a few years for the new items to settle into steady pricing. “This, combined with the potential for insurers and employers to provide disproportionate incentives through health reimbursement or health savings accounts, can cause an early savings greater than what might otherwise be anticipated,” says Stafford.

And while enrollment is growing, that rate of growth for CDHPs has slowed compared to 2009 and 2010. In the report, “2011 UBA Health Plan Survey,” CDHPs are growing at a rate of 14 percent. This is about two thirds of the 2010 rate, bringing the percentage of CDHPs offered by employers to about 23 percent of all plans offered. CDHPs also cover more employees (17 percent) than HMOs (12 percent), says Stafford.

Employers are continuing to offset members’ out-of-pocket expenses by offering a health reimbursement arrangement (HRA) or health savings account (HSA). The average employer contribution to an HRA was $1,656 (up from $1,481 in 2010) for single employees and $3,198 for family coverage (up from $2,857 in 2010).

Stafford says clinical executives at health plans and insurers will continue to see shifting in health plan enrollment particularly from further implementation of the Affordable Care Act.

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