benefits-insights-imageAmong employer-sponsored health insurance plans, consumer-directed health plans (CDHPs) continue to increase in popularity even though they are offering less savings than a year ago, according to the 2016 Health Plan Survey from United Benefit Advisors (UBA.)  UBA is one of The Gaudreau Group’s strategic partners and is the nation’s leading organization of independent benefit advisors.

UBA finds 26.4% of all U.S. employees are now enrolled in CDHP plans, an increase of 21.7% from last year and nearly 70% from five years ago.  Conversely, CDHP plan costs have risen 2% from last year, according to UBA. So while they are still 3.5% less costly than the average plan, CDHPs offered more savings in 2015 when they were 5.6% less than the average plan.

“CDHP interest among employers isn’t surprising given these plans’ savings over the average plan,” says Les McPhearson, CEO of UBA. “Employees typically pick up 32% of the cost, slightly below the 35% average employee contribution rate among all plans, making them an attractive choice for many employees as well. But like all cost benchmarks, plan design plays a major part in understanding value.”

The survey finds that 25.7% of plans offered by employers are CDHPs, a 14.2% increase in the last five years. Regionally, however, there are major differences in CDHP popularity.

CDHPs account for the following percentage of plans offered by employers:

Northeast 34.4%
North Central 32.5%
Southeast 26.6%
Central 21.0%
West 14.2%

CDHPs have increased in prevalence in all regions except the West, which saw the number of these plans decrease by 7.2% from 2015. Despite this decrease in the number of CDHPs offered in the West, there was an 18.9% increase in the number of employees enrolled, indicating the continued attraction to the lower premiums of such plans.

While most of the country is experiencing slightly increased premiums, California has enjoyed an 11.4% decrease in average single premiums, finds UBA. Employers in this part of the country are actually moving away from CDHPs and toward HMOs, which the survey shows are 9 percent less costly than the average plan.

“Cost-saving strategies, like cost shifting, should be taken with a grain of salt, given the increased burdens they place on employees,” says McPhearson. “Given the higher than average out-of-pocket costs of CDHPs, this turbulence in the West (who typically leads the nation in health care trends) indicates that employers and employees are still determining the value and success of these plans, making it a cautious upward trend to watch.”

Call the Employee Benefits Team at The Gaudreau Group to learn more.  You can also view or download the full UBA 2016 Health Plan Survey here.