Health Insurance Daily

CDHPs Becoming More Popular

Evidence continues to mount that an increasing number of employers offered health savings accounts or health reimbursement arrangements this year in an effort to stem rising health care costs, according to a recent poll by Spencer’s Benefits Reports.

The percentage of employers offering an HSA rose to 28% in 2006 from 12% in 2005, and the percentage of employers offering an HRA climbed to 18% from 9%. In addition, 64% of firms provided flexible spending accounts this year, up from 57% last year.

However, few employees are signing up for CDHPs. The average participation rate was only 3.1% for HSAs, 4.5% for HRAs and 21% for FSAs, Spencer’s discovered. Despite worker disinterest, 55% of employers intend to offer an FSA within the next 12 months, while 41% plan to provide an HSA and 23% plan to offer an HRA.

The reasons cited most often by employers for moving to a CDHP are reducing costs (41%), providing a savings vehicle for employees (19%) and offering more choices to employees (16%). The average annual, per-employee cost for health care is more than $6,700, according to the survey, which involved 121 firms with more than 440,000 workers.

Article provided by BenefitNews 11-28-06.

posted by Mike @ 11:56 AM