Consumer-driven health plans (CDHPs) have surpassed health maintenance organizations (HMOs) to become the second most common plan design offered by U.S. employers, according to new survey findings from Aon Hewitt.
Aon Hewitt's survey of nearly 2,000 U.S. employers representing over 20 million U.S. employees and their dependents found in 2011 that 58 percent of employers offered a CDHP and 38 percent offered HMO plans. Preferred provider organizations (PPOs) continue to be the most widely offered plans, with 79 percent of employers offering these plans in 2011.
Among employers that offer CDHPs, health savings accounts (HSA) outpace health reimbursement arrangements (HRA) by two to one (34 percent versus 18 percent). However, Aon Hewitt's survey shows a higher number of employees enrolling in HRAs, with 43 percent of employees enrolling in HRAs compared with 28 percent in HSAs. This reflects the fact that HRA plan designs are popular among large employers embarking on full replacement CDHP strategies, as they offer more design flexibility to the employer than HSA designs. HSAs, on the other hand, are typically offered as one of several plan options available for employees to choose between and therefore generate lower enrollments.
"As employers struggle to address unsustainable increases in health care spend, they can no longer rely on traditional methods of tweaking plan designs like increasing copays and deductibles or increasing employee payroll contributions for medical coverage," said Maureen Fay, senior vice president and head of Aon Hewitt's CDHP working group. "Employers are beginning to explore innovative solutions that focus on both the short-term need to manage health care costs and the longer-term requirement to change underlying behavior patterns, shifting the focus from 'caring for the sick' to 'actively managing the health of their employees.' Consumer-driven health plan designs are becoming increasingly popular among employers because they provide them with a vehicle for promoting consumerism and a framework for educating and motivating employees to actively engage in understanding and managing their health."
Promoting Enrollment in CDHPs
Despite an increase in prevalence, Aon Hewitt's survey found that enrollment in CDHPs lags behind PPO and POS plans. The average enrollment in a PPO plan was 69 percent in 2011 followed by POS plans (49 percent). Forty-three percent enrolled in a high-deductible CDHP with an HRA and 28 percent enrolled in a high-deductible CDHP with an HSA.
To encourage employees to enroll in these plans, employers are using a variety of tactics, including subsidizing premiums at a higher level than other plan options (36 percent), covering preventive medications before the deductible (34 percent) and contributing employer funds to the HSA (30 percent) and HRA (22 percent).
A growing number of employers are also considering using voluntary/elective benefits to supplement these plans, such as critical illness, hospital indemnity and accident insurance policies. Of those currently using this tactic, more than a quarter (26 percent) can attribute a significant-to-moderate increase in CDHP enrollment due to the availability of voluntary or supplemental medical benefits. While just 6 percent of employers use voluntary/elective benefits today to complement the CDHP and encourage enrollment, 42 percent report they are considering this approach in the next few years.
Effective Communication Critical to Successful CDHP Rollouts
According to a separate survey of 3,000 employees and their dependents by Aon Hewitt, The Futures Company and the National Business Group on Health, employees are willing to try CDHPs and their associated accounts and will continue to choose them because they often come with a lower premium. However, employees find them challenging to understand and use.
"Employees want to choose the most cost-effective plan with the least hassle, but they often have very full lives and are not all that interested in digging into the details of CDHPs, HSAs and HRAs," said Joann Hall Swenson, partner and health engagement best practice leader at Aon Hewitt. "Our research and experience tells us that simply giving employees lots of educational information about these plans and accounts is only helpful to the small minority of people who like all the details."
To address this, Swenson advises employers to:
• Get the right people into the right plan. Employers need to identify segments of their population most likely to value and take advantage of the unique features of the CDHP, and tailor the marketing campaign to them. Also, they need to monitor employees' day-to-day experience of using the plan to ensure it "re-sells" itself and engages consumers in the appropriate health and financial behaviors.
• Reinforce the plan's advantages and actions. Employers should articulate what's in it for consumers, specifically how they can benefit from the plan's key features, and be very specific about the actions consumers need to take.
• Make it easy for employees and their families to use the plan. This includes removing barriers to care at the point of need through initiatives like value-based plan designs or fully funding employer contributions to HSA/HRA accounts at the beginning of the year.
To be effective, Aon Hewitt's consumer and employer research also suggests that employers must provide tools and support throughout the year so more employees and their families can learn how to:
• Navigate new tools to help them make smart choices in selecting appropriate treatments and providers based on available cost and quality information.
• Participate in activities to help them assess their health opportunities and risks such as biometric screenings and health risk assessments.
• Leverage clinical and behavioral resources like health coaches and disease management nurses to help set and make progress towards health improvement and maintenance goals.
• Follow preventive care guidelines.
• Actively manage chronic conditions by working closely with their physician and adhering to evidence-based treatment protocols.
"As CDHP plans become increasingly prevalent, successful employers are shifting the dialogue to be about becoming a smart health care consumer—effectively engaging them in taking a look at their plan options and their features, comparing the combined out-of-pocket and out-of-paycheck costs of a CDHP versus traditional plans, making the best choice for them and their families and thinking like a consumer as they use the plan throughout the year," added Fay.
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