Survey: Consumer Driven Health Plans Making Headway in U.S. Companies

March 24, 2005

According to a recent survey of 208 benefits managers, 22 percent of companies responding now offer a consumer driven health plan option (CDHP) to employees. Seventy-four percent of the companies offering CDHPs started them in 2004 and 2005, with over half of that group only implementing CDHPs this January. Aon Consulting conducted the survey in conjunction with the International Society of Certified Employee Benefit Specialists (ISCEBS), in January and February of this year.

Bill Sharon, senior vice president with Aon Consulting’s health & welfare practice, said, “We may be looking at the tipping point for consumer driven health plans being embraced by U.S. companies. To date, 2005 CDHP plan starts have exceeded 2004’s record benchmark, and our survey reveals the trend will only continue.”

More CDHPs in the Pipeline

Of the employers not currently offering a CDHP, 50 percent plan to offer them in the future, with 13 percent of the respondents indicating this will happen this year or next. Thirty-seven percent of benefits managers said they are undecided on an effective date to launch the offerings. The remaining 50 percent of companies not offering CDHPs today believe the concept is too new and will wait to see other employers’ experience with CDHPs before deciding to offer one themselves.

Sharon said, “That is a very telling response. The majority of those who said they are not considering CDHPs have left the door open. This wait-and-see attitude is not surprising, but also indicates that as the consumer driven trend continues this growth pattern, we will see many of these benefits managers changing their opinion sooner than they think.”

Of the employers planning to offer a CDHP in the near future, 49 percent anticipate offering a health savings account (HSA) either as an option (38 percent) or as a total replacement for their existing health plans (11 percent).

Sharon stated, “This finding seems to reflect the potential future popularity of HSAs versus a health reimbursement arrangement (HRA). This runs contrary to the early experience with CDHPs reflected in the survey, where two-thirds of employers currently offering CDHPs — offer an HRA.”

CDHPs and the Workforce

The majority of respondents in the survey (55 percent) believe CDHP design makes employees better, more efficient consumers of health care, with only 8 percent believing it has no effect on employee health care purchasing. Reflecting a hesitance of some employers to embrace the consumer-driven concept, 22 percent believe CDHP designs lead employees to forego needed health care to save money.

On the future of the CDHP concept, a similar percentage (29 percent) believes CDHPs will be unsuccessful in controlling employers’ health care costs in five years. The remaining respondents believe CDHPs either will be successful (37 percent) or don’t know (34 percent).

This group is also split over how they believe CDHPs will fit into their benefit packages in the future. Of the members expressing an opinion on this future fit (excluding 41 of the 209 total who did not know), 89 percent believe their employers will be offering a CDHP in five years. These members, however, are split on its popularity with 23 percent believing CDHPs will cover over half their workforce and 37 percent believing it will cover less than 25 percent of employees. Only 11 percent of the members expressing an opinion believe their employer will not be offering a CDHP.

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