High Health Care Costs Driving CDHP Offerings

May 30, 2006 (PLANSPONSOR.com) - The Government Accountability Office (GAO) found that the number of enrollees and dependents covered by consumer-driven health plans - either a health reimbursement account (HRA)-based or a health savings account (HSA)- eligible plan-increased from about 3 million in 2005 to between about 5 and 6 million in 2006.

The most common contributions to employees’ HRAs range from $500 to $750 for individual coverage and $1,500 to $2,000 for family coverage in 2004. And for HSAs, two-thirds of employers offering these plans contributed to their employees’ plans, according to the GAO report .

Even if insurance carriers have made these plans more available to employers, only a marginal percent of employers actually offer them to employees. However, there is evidence that this percentage may slowly be growing. About 1% of all employers that offered health benefits offered a CDHP in 2004, and about 4% offered one in 2005, according to a Kaiser Family Foundation survey in 2005.

The GAO report said that larger employers were more likely to than smaller employers to offer a CDHP. According to a 2005 benefit survey, 22% of employers with 20,000 or more employees offered at CDHP, compared to 2% of employers with less than 500 employees.

More US employers are offering consumer-driven health plans as a way to rein in rising health care costs, according to a Watson Wyatt survey released in March that found 29% of employers now offer a CDHP with a HSA or HRA, up from 13% in 2005 (See CDHPs a Growing Health Care Offering from Employers ). The survey found that 33% of the respondents to the survey said they plan to do so in 2007.