March 2006

Employer interest in CDHPs grows

A growing number of U.S. employers are implementing consumer-driven healthcare plans (CDHPs) to help control rising costs. The employers that are most successful at controlling cost increases are implementing a wide variety of programs to encourage consumerism, rather than relying solely on high-deductible or account-based health plans.

These are among the major findings in an annual survey conducted by Watson Wyatt Worldwide and the National Business Group on Health.

The survey of 585 mid-sized and large companies found that the number of employers offering a high-deductible health plan (HDHP) with a health savings account (HSA) or health reimbursement account (HRA) is increasing. Twenty- nine percent of employers now offer such plans, and another 33 percent plan to do so in 2007. Two years ago, fewer than one in 10 companies offered a high- deductible plan. Median employee enrollment in HDHPs, which are usually offered as an option to employees, is currently 7 percent.

Overall, the vast majority of employers (80 percent) find consumer-driven health plans (CDHPs) to be at least somewhat effective at increasing employee involvement in healthcare decision making. However, significantly fewer — 59 percent — find such plans to be somewhat effective at controlling healthcare cost increases.

Source: Watson Wyatt Worldwide, www.watsonwyatt.com/; National Business Group on Health, www.wbgh.org

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