Choice among health plans is still an option for most covered workers with job-based insurance. Sixty-five percent of covered workers are able to choose from two or more health plans. This year’s survey also examined employers’ familiarity with and interest in consumer-driven health care, particularly high-deductible plan coupled with a personal or health savings account option.⁵

Plan Choice

• PPO coverage, a less restrictive form of managed care, continues in 2004 to be the most popular health plan option offered to covered workers.
  • Nearly four out of five covered workers (79%) have the option of electing a PPO plan, similar to last year (Exhibit 4.1).
  • The percentage of covered workers with the option to enroll in an HMO increased somewhat from 47% in 2003 to 54% this year (Exhibit 4.1).
  • The percentage of covered workers who have a choice of conventional coverage has fallen dramatically since 1988, from 90% to just 16% in 2004 (Exhibit 4.1).
  • The availability of POS plans is unchanged in 2004, with 30% of covered workers having the option (Exhibit 4.1).
• The percentage of covered workers who can choose from multiple health plans has remained relatively stable since 1996. In 2004, 65% of covered workers have more than one health plan option, similar to last year (Exhibit 4.3).
  • Health plan choice varies by firm size: 73% of covered workers in all small firms (3- 199 workers) offer only one plan, compared to 18% in all large firms (200 or more workers) (Exhibit 4.4).
  • Choice of plans varies by region, with covered workers in the South slightly more likely (44%) than workers overall (35%) to have just one plan option (Exhibit 4.5).

Consumer-Driven Health Care

• New plan arrangements, including so-called consumer- driven health plans, are receiving increasing attention. The most common model of a consumer-driven plan pairs a relatively large deductible plan (e.g., a $1,000 deductible) with a personal or health savings account option. These accounts permit employers (and sometimes employees) to make pre-tax contributions, which can be used by employees to pay for routine medical care.^6,7
  • Approximately ten percent of all firms offer a high-deductible plan in 2004. Only a small percentage (3.5%) of firms offering a high-deductible plan offer a personal or health savings account option along with the high-deductible plan (Exhibit 4.8).
  • The percentage of large firms (1,000-4,999 workers) offering a high-deductible plan increased from five to nine percent between 2003 and 2004. Jumbo firms (5,000 or more workers) are more likely (20%) than all firms (10%) to offer employees a high-deductible plan (Exhibit 4.8).
  • When asked about their familiarity with consumer-driven plans, 40% of firms responded that they are either “very familiar” or “somewhat familiar” with such plans. All large firms (200 or more workers) tend to be more familiar than all small firms (3-199 workers) with consumer-driven plans, with 22% of all large firms reporting that they are “very familiar” with consumer- driven health plans, compared to two percent of all small firms (Exhibit 4.9).
  • A larger percentage of firms are familiar with the concept of personal or health savings accounts than with consumer- driven health care. Fifty-six percent of firms report being either “very familiar” or “somewhat familiar” with personal or health savings accounts. A larger percentage of all large firms (200 or more workers) report being “very familiar” with personal or health savings accounts than all small firms (3-199 workers) (24% vs. 10%) (Exhibit 4.9).
• Although very few employers currently offer the combination of a high-deductible plan with a personal or health savings account option, 27% of all firms report that they are “very likely” or “somewhat likely” to offer this combination in the next two years (Exhibit 4.10).