Employer Health Benefits Survey 2005: Summary of Findings Page Three

Employer Health Benefits 2005 Annual Survey

Summary of Findings:

Page Three

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Health Plan Enrollment

Enrollment in PPOs grew over the last year, while HMO enrollment declined. PPOs continue to be the most common plan in 2005, enrolling 61% of employees with health coverage, up from 55% in 2004.³ HMO enrollment fell to 21% of covered workers from 25% in 2004. POS enrollment, which has been declining in recent years, remained stable this year at 15%.

Utilization Management and Disease Management

About eight-in-ten workers (81%) with job-based coverage are in a health plan that uses case management for large claims. Prior certification for inpatient services (75% of covered workers) and outpatient surgery (55% of covered workers) also apply to most covered workers.

Over half of covered workers (56%) are in a plan with at least one disease management program. Among workers in these plans, virtually all are in a plan that provides management for diabetes, and high percentages arein plans that provide management for asthma (86%), hypertension (82%), and high cholesterol (66%).

High-Deductible Health Plans

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Employers appear to be embracing increased consumer responsibility and higher cost sharing as strategies for reducing the growth in health care costs. Twenty percent of firms offering health benefits offer an HDHP (defined for 2005 as having a deductible of at least $1,000 for single coverage and $2,000 for family coverage) (Exhibit F). Jumbo firms (5,000 or more workers) offering health benefits are more likely than all firms to offer such a plan. We note that the definition of an HDHP has changed somewhat over the past three surveys.⁴

We asked employers offering an HDHP whether they offer either (1) an HRA to their employees (referred to here as an “HDHP/HRA”) or (2) an HDHP that permits their employees to establish an HSA (referred to here as an “HSA qualified HDHP”). Among all firms offering health benefits, 1.9% offer an HDHP/HRA, with 1.6 million workers enrolled in the HDHP/HRA, and 2.3% offer an HSA qualified HDHP, with 810,000 workers enrolled in the HSA qualified HDHP (Exhibit G).⁵ About 25% of workers offered an HDHP/HRA and about 15% of workers offered an HSA qualified HDHP participate in the arrangement that is offered.

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As expected, deductibles in these arrangements are relatively high: in HDHP/HRAs, annual deductibles average $1,870 for single coverage and $3,686 for family coverage; in HSA qualified HDHPs, annual deductibles average $1,901 for single coverage and $4,070 for family coverage. The average premiums for the HDHPs in these arrangements are generally lower than average health plan premiums overall, although these differences lessen or disappear when employer contributions to the spending accounts are added to the premium. The average total annual spending for HDHP/HRAs (premiums plus employer contributions to the HRA) is not statistically different than average annual health plan premiums for either single or family coverage. In contrast, the average total annual spending for HSA qualified HDHPs is significantly lower for both single and family coverage than annual average premiums for health plans generally (Exhibit H).

On average, workers enrolled in an HDHP/HRA receive an annual employer contribution to their HRA of $792 for single coverage and $1,556 for family coverage. Workers enrolled in an HSA qualified HDHP on average receive an annual employer contribution to their HSA of $553 for single coverage and $1,185 for family coverage.⁶ About one-in-three employers offering an HSA qualified HDHP (covering about 35% of workers enrolled in these plans) does not contribute to HSAs established by their employees.

Exhibit H: Average Annual Premiums and Contributions to Spending accounts For Covered Workers in HDHP/HRAs and HSA Qualified HDHPs Compared To All Plans, 2005

	HDHP/HRA		HSA Qualified HDHP		All Plans^‡
	Single	Family	Single	Family	Single	Family
Total Annual Premium	$3,503*	$8,530*	$2,700*	$7,909*	$4,024	$10,880
Worker Contribution to Premium	$423	$2,654	$431	$1,664*	$610	$2,713
Firm Contribution to Premium	$3,080	$5,876*	$2,270*	$6,245*	$3,413	$8,167
Total Annual Firm Contribution (Firm Share of Premium Plus Firm Contribution to HRA or HSA)	$3,872*	$7,538	$2,850	$7,337	$3,413	$8,167
Total Annual Spending (Total Premium Plus Firm Contribution to HRA or HSA)	$4,295	$10,193	$3,280*	$9,001*	$4,024	$10,880

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³	A portion of the change in enrollment is likely attributable to incorporating more recent Census Bureau estimates of the number of state and local workers and removing federal workers from the weights. See the Survey Design and Methods section in the full report for additional information.

⁴	In 2003 and 2004 the survey used a different definition and asked firms if they offered a health plan with a deductible of more than $1,000 for single coverage. The 2003 and 2004 surveys did not specify a minimum deductible for family coverage. Some of the change in the percentage of firms offering an HDHP between 2003 and 2005 may be due to this change in the definition of an HDHP.

⁵	This estimate of the number of workers enrolled in an HDHP/HRA or an HSA qualified HDHP does not include federal workers because the federal government is not included in the survey.

⁶	The average firm contributions to HSAs for single coverage ($553) and family coverage ($1,183) include covered workers whose firm makes no contribution to the account. Average Firm Contributions to the HSA or HRA cannot be calculated by subtracting the average Total Annual Premium from the average Total Annual Spending (Exhibit H) due to varying sample sizes. Some firms provided data for premiums and worker contributions that were inconsistent with other data they provided about their HDHP/HRA or HSA qualified HDHP. These data were excluded from estimates of the average premium, worker contribution, and firm contribution for the HDHP; therefore there are fewer cases used in calculating those averages than for the average firm contribution to the HSA or HRA.

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The Kaiser Family Foundation and Health Research and Educational Trust
Program Area: Health Care Marketplace Project | Publication Date: 09/14/2005