ACA Sparks Renewed Interest in CDHPs; FedEx Shifts to Account-Based Plans (2013)

Reprinted from HEALTH PLAN WEEK (c); Health Business Daily Story, Aug. 26, 2013

The trend toward consumer-directed health plans (CDHPs) got a major convert this month when package delivery giant FedEx Inc. said it would not only offer such plans, but actually switch its entire 400,000-some workforce to account-based insurance starting in 2014. Cigna Corp. and WellPoint, Inc.’s Anthem Blue Cross and Blue Shield will administer the new benefit.
Consultants and industry stakeholders didn’t blink at the news, considering that CDHPs have been around for more than a decade, but did stress that the reform law appears to be accelerating the speed at which large groups are moving away from more traditional coverage.
Tim Finnell, a certified health care reform specialist and president of Group Benefits LLC in Memphis, Tenn., says he sees a lot of large employers at least considering making a change. Finnell says FedEx, which is a bulwark in his hometown of Memphis, is being proactive by announcing its intentions now, well before open enrollment in the fall. “FedEx has always been innovative and ahead of the curve.…But this is part of a trend we are seeing shifting the cost to the claims side from the premium side,” he says. The consumer-directed plans, like the account-based program FedEx will roll out, puts members in a position to help themselves by making healthy choices, joining incentive-based preventive care programs and shopping for services.
FedEx spokesperson Scott Fiedler tells HPW that the reform law “is causing all employers to re-examine how they provide health care benefits to their employees. FedEx is no exception. Like many large employers, FedEx is self-insured and is working proactively to address rising coverage costs.”
CDHP Trend Gains Speed
Industry sources say the FedEx account-based plan likely will offer different levels of deductibles and will be tied to a health reimbursement arrangement (HRA). All prescriptions, preventive care programs and member primary care doctor visits to in-network providers will be covered outside of the annual deductible, with coinsurance instead being used in those instances. A $400 annual HRA contribution will offset the annual deductible for individual workers. Employees with children will have a $650 HRA contribution, while those with family coverage will have an $800 contribution.

“Consumer-Driven” Health Enrollment Reached 22 Million in 2010 ; 9.9 million in HSAs
The ranks of people enrolled in either a consumer-driven health plan (CDHP) or a high-deductible health plan (HDHP) reached 22 million in 2010, according to a report released today by the nonpartisan Employee Benefit Research Institute (EBRI). Participation in these account-based health care plans is low, but continues to grow, EBRI finds in its sixth annual Consumer Engagement in Health Care Survey. The EBRI report found that enrollment in CDHPs rose to 5 percent of the privately insured population (5.7 million people) in 2010, up from 4 percent in 2009. Enrollment in HDHPs increased to 14 percent of the privately insured population (17.2 million people) in 2010, up from 13 percent in 2009. “Findings From the 2010 EBRI/MGA Consumer Engagement in Health Care Survey” are published in the December 2010 EBRI Issue Brief, and are online at www.ebri.org
Overall, 12.1 million adults ages 21–64 with private insurance, representing 9.5 percent of that market, were either in a CDHP or were in an HDHP that was eligible for an HSA but had not opened the account.
See EBRI Report, December 2010

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