More Large Employers Offer High-Deductible Health Plans

The percentage of large employers offering a traditional health plan along with newer high-deductible health plans rose last year across all regions, according to new data.

By contrast, the percentage of employers offering only traditional indemnity, PPO or HMO plans fell in all regions, the data showed.

The changes indicate that big companies with diverse employee populations are moving toward a mix of traditional and high-deductible plans in their health benefits portfolio.

"With five generations in the workforce, it's really tough to find a one size fits all health care plan," said Jeff Oldham, senior vice president of Global and Institutional Markets for the online benefits platform Benefitfocus.

The data was published in the State of Employee Benefits 2018 Regional Edition report compiled from enrollment transactions across 544 large employers representing 1.3 million people on the online benefit platform Benefitfocus.

Employees with chronic conditions like diabetes, or employees facing a life event like child birth and might require hospital visits prefer to pay flat premiums required of traditional plans, Oldham said.

Traditional plans make it easier than high-deductible plans to budget for people with more anticipated claims, Oldham said.

At the other end of the employee spectrum, young college graduates or employees with small families and few doctor or hospital visits are more likely to choose high-deductible plans with lower premiums, higher deductibles and pre-tax savings linked to health saving accounts (HSA), the medical equivalent of a 401(k).

Employers like high-deductible plans because they are less expensive than indemnity and PPO plans.

Proponents of high-deductible plans say people with those plans use health care more efficiently, but critics point out that high-deductible plans encourage employers shift the cost of medical premiums on to the backs of employees.

Very few large employers offer only high-deductible plans, the survey found.

Data for the 2018 survey was collected during last year’s benefits enrollment period.

Western Region

Traditional health plan + HDHP: 66 percent, up 9 percent.

Traditional health plan only: 28 percent, down 9 percent.

HDHP only: 6 percent, no change.

Employee HSA contribution averaged $1,490, up 2 percent.

Employer HSA contribution for an individual averaged $750, up 11 percent.

Midwest Region

Traditional health plan + HDHP: 70 percent, up 7 percent.

Traditional plan only: 24 percent, down 9 percent.

HDHP only: 6 percent, up 2 percent.

Employee HSA contribution averaged $1,485, up 8 percent.

Employer HSA contribution for an individual averaged $572, up 10 percent.

South Region

Traditional plan + HDHP: 63 percent, up 11 percent.

Traditional plan only: 34 percent, down 9 percent.

HDHP only: 3 percent, down 2 percent.

Employee HSA contribution averaged $1,347, up 2 percent.

Employer HSA contribution for an individual averaged $530, up 5 percent.

Northeast Region

Traditional plan + HDHP: 60 percent, up 7 percent.

Traditional plan only: 35 percent, down 9 percent.

HDHP only: 5 percent, up 2 percent.

Employee HSA contribution averaged $1,343, up 2 percent.

Employer HSA contribution for an individual was $534, up 10 percent.

InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at cyril.tuohy@innfeedback.com.

© Entire contents copyright 2018 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.

Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at cyril.tuohy@innfeedback.com.