The CDHP Dilemma – Is this the Magic Bullet?

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White paper released today reveals CDHPs empower employees to be more accountable, but employers experience varying results.

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Interest in CDHPs is extremely high because so many businesses want their employees to be more engaged in the day-to-day process of accessing health care and to know the true cost of care.

Consumer-driven health plans (CDHPs) have drawn significant attention across the corporate landscape over the past five years – and with good reason. The CDHP model is designed to encourage employees to make more informed decisions about their treatment when they become sick or injured, as well as shoulder greater financial responsibility for their care. This interest has caused CDHPs to become the second most popular plan design with employees. “CDHPs grew at a rate of 33.9 percent last year and now cover more employees (15.4 percent) than HMO plans (13.6 percent),” said Bill Stafford, Vice President of Member Services, United Benefit Advisors (UBA).

Concerns exist, however, as to whether they generate savings for employers even though they contain savings accounts and high deductibles – elements that are widely viewed as vital to the success of the health care consumerism movement. CDHPs do experience a lower premium cost than all other plan types. However, the addition of an employer contribution to a health reimbursement account (HRA) or health savings account (HSA) increases the cost over that of traditional PPO plans.

Some independent employee benefit advisors offer a more bullish report. William L. Kite, Jr., president of D & S Life Agency, Inc. in Roanoke, Va., estimates that 94 percent of his clients have moved to CDHPs since 2003, and as a result, reduced health care expenses by 25 percent to 30 percent, depending on key demographic variables. “Interest in CDHPs is extremely high because so many businesses want their employees to be more engaged in the day-to-day process of accessing health care and to know the true cost of care,” said George Martin, president of Benefit Resources, Inc. in Colorado Springs, Colo.

Employers often offset the higher out-of-pocket costs of CDHPs by offering employees an HRA or HSA and contributing funds. The 2009 UBA Health Plan Survey found the average employer contribution to an HRA was $1,310 (up from $1,209 in 2008) for a single employee and $2,502 for a family (up from $2,274 in 2008).

To receive the full report, “The CDHP Dilemma”, click here.

About the 2009 UBA health Plan Survey
With responses from 17,655 health plans sponsored by 12,316 employers nationwide, the 2009 UBA Health Plan Survey is the nation’s largest and most comprehensive survey of plan design and plan costs. As the largest survey of its kind, the UBA Health Plan Survey defines benchmarks by a greater number of specific industries, regions and employer size categories than is available from any other resource.

About United Benefit Advisors:
United Benefit Advisors is an alliance of nearly 140 premier independent benefit advisory firms with offices in more than 165 offices throughout the U.S., Canada and the U.K., and is one of the nation's top-five employee benefits advisory organizations. As trusted and knowledgeable advisors, UBA Members collaborate with more than 1,900 professionals to seek out ideas, insight, expertise and best-in-class solutions that positively impact employers and make a real difference in the lives of their employees and families. Employers, advisors and industry-related organizations interested in obtaining powerful results from our shared wisdom are encouraged to visit UBA online at to locate your local UBA Member Firm.

Bill Olson
Marketing Manager


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