New Report from DirectPath and Gartner Reveals Only 30 Percent of All Employer-Sponsored Health Plans are HDHPs
Annual report identifies top trends in employer health benefits in 2018
Over the past few years, many employers have offered HDHPs to control health care costs. By shifting costs to employees, employers hoped their health care expenditures would be reduced. This strategy has proven largely ineffective, however, since most employees lack basic understanding of how health plans work, how to choose the most appropriate plan and how to use health coverage effectively. Employees’ health care illiteracy – coupled with their concerns about privacy – have led to lower utilization of employer-sponsored benefits like HDHPs and wellness programs. As a result, employers have not only experienced poor return on investment (ROI) on their health care investments, but they’ve also been left with employees who are frustrated with their health care options – a frustration intensified by growing expectations that benefits packages should be customized and care should be easily accessible and affordable.
This year’s data points to a recognition of this changing landscape, with HDHPs becoming just one of many choices offered by most employers – as opposed to the de facto solution for containing health care spend.
Other key findings from the 2018 Medical Trends and Observations Report – which is based on an analysis of more than 900 employee benefit health plans – include:
- Voluntary benefits remain popular, but offerings shift: Supplemental life insurance, legal services, critical illness insurance and identity theft protection are among the top voluntary benefits offered in 2018. While voluntary benefits remain a popular element of employers’ benefits strategies, the types of voluntary benefits offered has changed since last year. Two of the most popular voluntary benefits of 2017, supplemental life and accidental death and dismemberment insurance, decreased in prevalence by 38 percent and 32 percent, respectively – perhaps signaling that more employers are offering these as part of their ERISA plans.
- Costs for specialty drugs remain stable (for now): Despite media hype around mounting costs for “orphan” medications, the median copay for specialty drugs increased by a mere three percent from last year. However, with specialty drug costs expected to rise by nearly 18 percent in 2018 – and with specialty drugs projected to represent half of all drug sales by 2020 – employers will need to find ways to manage cost increases and utilization.
- Telemedicine is breaking out: 55 percent of employers are offering telemedicine as part of at least one of their health care offerings (up from slightly over a third of employers in 2017), and many organizations are covering them in full – at either 100 percent or for a
$0 copay. The rise of telemedicine is likely driven by increasing employee interest in the program and state law changes that have eliminated known barriers to adoption. To encourage utilization of telehealth providers, the median copay for these visits has declined somewhat and now equals that of a traditional office visit (roughly$20 ). - Wellness incentives are waning: While more than half of employers offered wellness incentives in 2017, less than one-third are offering them today. This decline may be attributed to employer concerns about the future legality of these plans, as well as continued questions regarding the value of wellness incentives when it comes to controlling costs and improving health.
To download the full 2018 Medical Trends and Observations report, please visit this page.
Research Methodology
The report is based on an analysis of more than 900 employer health plans drawn from The Lab®, the industry’s only medical health plan benchmarking database, powered by
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