Watson/NBGH Study: Employers still smitten on CDHPs


By Lydell C. Bridgeford

Used with permission 3-13-08

March 13, 2008

By 2009, nearly 55% of U.S. corporations plan on offering a consumer-directed health plan, reports Watson Wyatt and the National Business Group on Health.

After surveying 453 companies that employ 8.4 million workers, Watson and NBGH found that 47% of employers offer a CDHP, an increase from 39% in 2007 and 33% in 2006.

Companies with at least half of their workforce enrolled in a CDHP had a two-year median cost trend of 3.6%, almost half that of employers without a CDHP, the survey report explains. Organizations with a CDHP witnessed a two-year cost increase of 5.5% versus 7% for companies without a CDHP.

"A CDHP offers a way for companies to control costs while increasing employee accountability for health care decisions," says Ted Nussbaum, Watson Wyatt’s director of group and health care consulting in North America.

As more employers embrace the plans, the number of workers enrolled in CDHPs will naturally increase. For instance, 15% of employees at organizations that offer CDHPs are enrolled in the plans this year, up from 8% in 2006 and 10% in 2007. Yet only 6% of employers report 100% enrollment in a CDHP, which is expected to rise to 9% in 2009.

"Actively involving more workers in their health care and giving them the resources to make educated decisions can be a challenge, but it should be embraced. The end result can be a mutually beneficial system for both companies and their workers," says Helen Darling, president of the National Business Group on Health.

Other findings include:

· Companies spent an average of $7,211 on health care per employee in 2007. The figure is expected to increase to $7,620 in 2008.

· In 2007, the average annual cost increase for health care was 6%. This is a drop from 8% in 2006. However, costs are expected to again increase by 9% in 2008 and 8% in 2009.  

· Health risk appraisals are offered by 83% of companies this year, an 18% increase from 2007.

· Today, 27% of companies offer CDHPs with a health savings account (HSA), while 24% offer a health reimbursement account (HRA). Notably, employers are three times more likely to add an HSA (9%) than an HRA (3%) in 2009.