Employers Prefer HSAs in CDHP Offerings

November 16, 2009 (PLANSPONSOR.com) – Among employers who offer a consumer-driven health plan (CDHP), health savings accounts (HSAs) continue to be the preferred funding choice, according to a survey by Aon Consulting and the International Society of Certified Employee Benefit Specialists.

Of the 370 survey respondents, 44% of employers currently offer a CDHP to employees - similar to last year, according to a press release. Of those offering CDHPs this year, 56% are now using the HSA model, 35% are using the Health Reimbursement Arrangements (HRA) model, and 9% use both.

Over the last three years, the gap has widened between HSAs and HRAs, as the number of employers offering HSAs has gone from 48% to 56%, and the number offering HRAs has dropped from 43% to 35%.  

The survey also found that more employers who offer an HSA plan are contributing money to the plan (66% versus 60% last year). The breakdown of this group is as follows: a flat dollar amount of less than $500 per person (15%), a flat dollar amount of $500 or more (45%), and a matching employer contribution (6%).

Employers offering an HRA plan make a wide variety of contributions to the account for a single employee: 4% provide less than $300; 11% provide between $300 and $499; 49% provide between $500 and $799; 1% provide between $800 and $999; and 34% provide $1,000 or more.

Employers currently offering a CDHP said they are mainly doing so to control health plan costs (38%) or to introduce "consumer engagement" into the purchasing of health care for long-term change (35%). Other reasons include: expanding employee choices (14%), encouraging better use of health care services (9%), and providing a vehicle for retiree medical savings (3%).

Employee enrollment in CDHPs remains low, as the survey found 63% of employers have more than 10% of their employees participating - similar to last year. Employers still mainly believe workers choose not to participate because they are concerned about high out-of-pocket costs (51%). Other reasons for low employee enrollment cited by employers include: traditional plan design preference (20%); lack of knowledge about CDHPs (10%); and a perception that CDHPs are too complex (5%).