Health Insurance Daily

Almost Half Of Large Employers Will Extend Consumer Driven Health Plans

While many large employers were cautious about adopting consumer-driven health plans (CDHP) this year, 45% will offer them as an option in 2006, Fidelity Investments finds.

Although contribution levels varied, 85% of surveyed employers offering a CDHP said they would provide funding to offset employee costs through a health savings account or health reimbursement arrangement, Fidelity finds. The median funding for HSAs per year is $500 for single coverage and $1,000 for family coverage. For HRAs, the median funding is $750 per year for single coverage and $2,000 for family coverage.

Employers projected considerably lower costs for CDHP family coverage, compared with more traditional health plan offerings, next year. The average CDHP is expected to cost $875 per month, compared with $936 per month for other health plans. However, cost savings for single-coverage CDHPs is expected to be less, with average costs projected at $302 per month, versus $319 per month for other health plans.

"While lower contribution rates may provide good incentive for employees to consider CDHPs, employers should carefully monitor their plan's performance to ensure it is achieving its intended benefits," advises Marc Hallee, senior vice president at Fidelity Human Resource Services.

Fidelity surveyed 86 employers with more than 2,000 employees and analyzed health insurance enrollments of more than 700,000 employees.

Article provided by Benefit News - November 8, 2005.

posted by Mike @ 8:35 AM