HDHP sign-ups increase for some firms: How and why
June 3, 2009 by Jim GiulianoPosted in: Health care, In this week's e-newsletter, Latest News & Views, Money
When employers rolled out high-deductible and consumer-driven health plans a few years ago, most workers said “no, thanks.” That’s changed a bit recently, and you might find workers a little more open to such plans — if you follow the lead of successful companies.
The quick lesson about HD/CDHPs is that high-deductible plans don’t sell themselves; employers have to make an effort to lead employees into the plans.
To illustrate, let’s go back to 2006, around the time of HDHP and CDHP rollouts. Of all workers in employee health plans, the percentage enrolled in HD/CDHPs went from 2.7% in 2006 to just 3.8% in 2007. Possible reason for the minuscule growth: Old-fashioned opposition to anything new, plus horror stories from employees about issues with HD/CDHPs, such as –
- no money in the deductible kitty
- providers refusing to discuss price or negotiate post-treatment
- health plans refusing to require providers to accept negotiated contract rates
Of course, after that time, health costs continued to rise — for employers and employees — and the economy plunged, so everyone started to give HD/CDHPs a fresh look.
Jump ahead to this year and a survey of 787 companies by benefits consultant Workscape, Inc. The survey found that:
- HD/CDHPs are now offered in nearly 50% of small and midsize organizations and almost 66% of large companies.
- From 2008 to 2009, there was a 10% increase in adoption of the plans by employees.
And, from the survey, here might be the reason for the increases: About 67% of employers said they offer programs that help employees make informed decisions about participating in a CDHP or HDHP, and 40% use incentives to encourage employees to participate in health/disease-prevention programs that make high-deductible plans attractive.
June 8th, 2009 at 8:29 am
How high does the deductible need to be before it is considered a high-deductible health program?
June 8th, 2009 at 2:39 pm
The deductibles need to be $1,150 for self only plans and $2,300 for family plans for 2009. For 2010 you can check IRS.gov later this year.
June 8th, 2009 at 2:55 pm
I believe it’s $1150 for this year if it’s a single employee and $2300 for family. For 2010 it’s $1200 and $2400.
June 23rd, 2009 at 3:59 pm
We have a high deductible plan ($3,000/$6,000) which saves us about $2,500/yr in premiums. We then let the employee set up an insurance fund (not tax deductible at present) and allow them to contribute 2% of their max possible out of pocket amount ($4,000 to $8,000) per month. We then match any amount used for medical purposes in their acct two for one. So far no employee has paid more than they would have in a traditional plan and many have saved a bundle. Most employees save up enough in 3 years to pay any possible medical expense they could have, so they are secure in knowing that they don’t have to keep funds in their check book for medical expenses. We save about $500 to $1,000 per employee, even after matching them two for one. Everyone wins except the insurance company.