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The nationwide study of 470 employers found the number of employersoffering CDH plans is on the rise, with 37 percent offering this plan type toemployees, up from 28 percent of employers in 2006 and 22 percent in 2005, thefirst year this study was conducted.
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"This finding shows that the CDH movement continues to grow," said BillSharon, senior vice president with Aon Consulting and co-author of the survey."Early CDH results have been very positive. Employers like them because theyare seeing a reduction in healthcare cost increases. Our analysis shows thata company can achieve first year savings of 8 percent of their premium if theyimplement an effective consumer-driven healthcare strategy."
More employees this year than last are enrolling in a CDH plan. Sixtypercent of employers have more than 10 percent of their employeesparticipating in a CDH plan, up from 53 percent of employers in 2006.Additionally, employee fears about enrolling in this new plan type havedecreased. Of those employers offering a CDH plan, 54 percent cited concernsamong employees about high out-of-pocket costs as the principal reason for notenrolling in a CDH plan. That figure is down from 66 percent in 2006.
"There is a growing recognition that most employees do not want a medicalplan with high out-of-pocket costs," Sharon said. "Therefore, most companieswith CDH enrollments of 40 percent or more have designed CDH plans without-of-pocket maximums comparable to their more-traditional HMO and PPO plans.In addition, employers have used out-of-pocket cost comparisons to showemployees the relative cost advantages of the CDH plan." (See health planout-of-pocket cost comparison chart, page 5).
Employers offering CDH plans
The survey found that 83 percent of employers offer a CDH plan in additionto other healthcare plans, with the remaining 17 percent offering CDH plans inlieu of more traditional health plans.
"This finding has held pretty steady over the past five years," Sharonsaid. "The majority of employers offer CDH as an optional plan, since theseplans operate very differently from an HMO or PPO, and it takes time foremployees to become comfortable with a new plan type." The main drivers behindemployers offering CDH plans are similar to the reasons stated in the 2006survey: To introduce consumerism into the purchasing of health care forlong-term change (47 percent) and to control rising healthcare costs (33percent).
The survey found the CDH plan models and contribution levels to beconsistent with 2006 as well. Forty-two percent of employers are using healthreimbursement arrangements (HRA)(1), 48 percent are using health savingsaccounts (HSA)(2) and 10 percent are offering both. Of the employers offeringan HSA, 67 percent contribute either a flat dollar amount of less than $500per person (17 percent), $500 or more (40 percent) or match employeecontributions (10 percent).
Employers without a CDH plan
Similar to 2006, 42 percent of employers without a CDH plan are planningto offer one in the future. Eleven percent are planning to offer one thisyear or next, while 31 percent are undecided on an effective date. Theremaining 58 percent of these employers are not seriously considering a CDHplan as a future plan offering.
About Aon
Aon Corporation (http://www.aon.com) is a leading provider
