Consumer-driven health plans on the rise
Enrollment in consumer-driven health plans (CDHPs) continues to grow, while HMO and PPO enrollment is on the decline, according to a survey from consulting firm Mercer.
Among those covered by employer-sponsored health plans, 23 percent are now enrolled in a CDHP, BenefitsPro reported. That's an increase from 18 percent in 2013. Meanwhile, PPO enrollment dropped to 61 percent and HMO enrollment fell to just 16 percent--the lowest level since Mercer began its survey in 1993, BenefitsPro noted.
Three factors explain the rise in CDHP enrollment, Mercer found:
Under the Affordable Care Act, employers must offer coverage to employers working 30 or more hours per week as of next year. More than a third of large employers were affected by this rule, according to the survey. "While some have already taken steps to comply, the majority will do so in 2015."
The minimum tax penalty for not getting health insurance will rise to $325 in 2015 from $95 this year.
CDHP coverage costs up to 20 percent less than traditional HMO or PPO coverage. With the so-called "Cadillac tax" going into effect in 2018, employers look to avoid paying a 40 percent excise tax on health plans that cost more than $10,200 for an individual or $27,500 for a family, Mercer said, adding that one-third of employers risk paying this tax if they don't so something.
Rising interest in CDHP coverage suggests that insurers need to prepare for a wave of consumerism, Mercer said. What's more, employees are getting more comfortable with the new reality of consumer-driven healthcare, partly because employers are doing their part to help employees manage their deductibles and "shop" for services.
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