Growth of High Deductible health plans

Have I mentioned high deductible plans? Only a couple times, right? The truth is they continue to grow, and here’s a thing or two about why. Full text can be found here.

– Eric

High Deductible Health Plans Continue to Grow

July 11, 2011 (PLANSPONSOR.com) – PricewaterhouseCoopers’ 2011 Health &Well-Being Touchstone Survey shows the average reported increase in employers’ medical plan costs was 8% for 2009 and 7.8% for 2010.

Thirty-five percent of respondents have gross costs greater than $10,000 per employee per year (up from 25% last year), and 38% of participants have net costs greater than $8,000 per employee per year (up from 28% last year).

According to the report, employee contribution percentages stayed relatively unchanged from 2010 to 2011. Most common for both employee and dependent coverage continues to be 20%-24%. Employee contributions tended to be lower for companies with less than 1,000 employees as well as those in the Health, Insurance, and Nonprofit industries. Employee contributions tended to be higher in the Retail & Consumer industry.

While Preferred Provider Organization (PPO) remains the most common plan design, high deductible health plans continue to grow. Enrollment in high deductible plans with health savings accounts (HSAs) increased from 20.5% to 29.5% in 2011. Enrollment in high deductible plans with health reimbursement accounts (HRAs) increased from 34.2% to 37.9% in 2011. The percentage of employers reporting a high deductible health plan as having the highest employee enrollment increased to 17% in 2011 (up from 8% two years earlier).

Forty-three percent of responding employers continue to provide retiree medical programs; 62% of employers with more than 5,000 lives offer retiree medical, while 33% of employers with less than 5,000 lives offer retiree medical coverage. Seventy-one percent do not provide retiree medical to new hires.

Of those who provide retiree medical programs, 63% subsidize pre-65 retiree medical coverage (44% provide access only), and 52% subsidize post-65 retiree medical coverage (34% provide access only).

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About thebenefitblog

Eric is a Producer at Lockton Insurance Brokers, Inc., the world’s largest privately held commercial broker. Eric has over 23 years of experience in the insurance industry and has spent the last 11 years with Lockton. Eric specializes in Health & Welfare Benefits, Retirement Planning, and Executive Benefits. Eric's clients utilize his expertise in the areas of Plan Due Diligence, Transaction Structure, Fiduciary Oversight, Investment Design, Compliance and Vendor negotiation to improve the operational & financial outcome for each client. The Benefit Blog is a place to share that expertise and industry news.
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