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Health Accounts and Account-Based Plans

The adoption of consumer-directed health plans (CDHPs) has become virtually universal among large employers. In 2017, 84% of employers offer at least one CDHP and 35% offer a CDHP as the only health plan option.

The popularity of CDHPs is a result of the steady increase in health care costs for both employers and employees. Under traditional health care plans (HMOs, PPOs and POS), employees pay relatively low copayments and other cost sharing and generally higher premiums. Under CDHPs, premium payments are lower but deductibles and cost sharing are higher thus promoting people to have more of their own "skin in the game" to choose medical care in a cost-efficient way.

The most common design of a CDHP is one paired with a health savings account (HSA). An HSA is a tax-advantaged account that rolls over contributions from year-to-year, is portable, and can be invested. Ninety-two percent of employers offer an HDHP with an HSA. Another option is a health reimbursement account (HRA), which is funded solely by employers and is not portable, and flexible spending accounts, which allow employees to voluntarily save for their out-of-pocket health expenses.

A vast majority of employers contribute funds to employee health accounts and the most common strategy is a predetermined amount to the HSA (63%) and HRA (68%). The median employer contribution to health accounts is $600 for an HSA and $725 for an HRA.

Availability of CDHPs Among Large Employers

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Featured Resources

Critical Issue Update: Consumer-Directed Health Care: The Employer Perspective Critical Issue Update: Consumer-Directed Health Care: The Employer Perspective
Current information on all aspects of Consumer-Directed Health Care, including health savings accounts, health reimbursement arrangements, and high-deductible health plans.

Infographic: All you Need to Know About CDHPs for 2017 Infographic: All you Need to Know About CDHPs for 2017
This Numbers You Need Infographic highlights data from the Large Employers’ 2017 Health Plan Design Survey regarding what to expect from consumer-directed health plans in 2017.

Policy Brief - Policies to Enhance Affordable Health Coverage: Consumer-Directed Health Plans Policy Brief - Policies to Enhance Affordable Health Coverage: Consumer-Directed Health Plans
As wages continue to stagnate and health care costs continue to climb, more employers are offering and more employees are selecting account-based, or consumer-directed health plans. This public policy brief examines the impact of this type of coverage on costs, quality and other important factors. It also recommends policy changes suggested by the research to make these types of plans easier to use for needed health care services.

 

 

Also of Interest

Blog Post: Selecting Evidence-Based Vendor Partners in the CDHP Era
Learn how to partner with strategic vendors that help employees access high quality, cost-effective, evidence-based treatments.

Employer Contributions to Health Accounts for Single Coverage
This Numbers You Need chart looks at how much employers contribute to employees’ HRAs and HSAs.

National Business Group on Health's Position Statement on Health Accounts
The National Business Group on Health supports regulatory and legislative efforts to promote consumer-directed health care and health accounts.

IRS Issues Inflation-Adjusted HSA Amounts for 2018
Recently, the Internal Revenue Service (IRS) issued Revenue Procedure 2017-37, which provides inflation-adjusted amounts for health savings accounts (HSAs) paired with high-deductible health plans (HDHPs).

 

Also of Interest

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