Benefitfocus provides services to a number of largely self-funded health plans. Based on its experience, it releases regular reports carrying perspectives and data on trends in employer health plans. (Benefitfocus Report) As other similar surveys do, this one shows a continued move toward offering employees high-deductible plans coupled with some form of health savings account. According to Benefitfocus’ data, about 70% of employers offer at least one high-deductible plan, but only 5% are offering them as the only option. This is up from 60% in 2017, so the availability of high-deductible plans continues to increase rapidly, but they are rarely being forced upon employees. When given a choice, PPO model plans are the most popular, with 48% of employees selecting them, while 35% select a high-deductible plan. These choices appear to be partly driven by age and income. There is a steady of increased enrollment in high-deductible plan options with lower age, with millennials signing up for them at twice the rate of the oldest cohort of workers. This is likely due to fewer health needs among younger workers. In addition, those selecting a high-deductible plan have average wages around $5000 higher than those selecting a more traditional plan. This may be due to a perception of greater ability to handle higher out-of-pocket costs.
Of course, out-of-pocket costs are just part of the story, premium contributions count as well. And for high-deductible plan single coverage, premium contributions are about 42% less than for a PPO plan and for family coverage they are about 40% less. Even as a percent of a total premium, the employee share is lower for a high-deductible plan than a PPO one. But employee contributions are still rising fairly rapidly, faster than wage growth. They rose an average 5% for PPOs and 4% for high-deductible plans year-over-year. Of course, deductibles are the biggest cost item on the minds of most employees, but the average deductible in both PPO and high-deductible plans actually declined this year. Employers may be responding to pushback on the growth and size of deductibles. And employee use of associated health savings accounts has also been growing, with a majority taking advantage of them, although the maximum is rarely contributed. These accounts are a tax-advantaged method to offset deductibles and other out-of-pocket costs. And again, younger employers appear to be more enthusiastic about HSA adoption. So we get a sense that employees are slowly and surely adopting to the new world of health benefits with greater costs imposed on them.