Employer Health Benefits 2006: Section 8: Employee Cost Sharing (Introduction)

Employer Health Benefits 2006 Annual Survey

Section 8: High Deductible Health Plans with Savings Options

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Section 8: High Deductible Health Plans with Savings Options

Recent changes in law have permitted the establishment of new types of savings arrangements for health care. The two most common are health reimbursement arrangements (HRAs) and health savings accounts (HSAs). HRAs and HSAs are both financial accounts that workers or other individuals can use to pay for health care services. Click here to go to HRA and HSA definitions.

This year we have added high deductible health plans with a savings option, or HDHP/SOs, as a distinct plan type in the survey. HDHP/SOs include (1) health plans with a deductible of at least $1,000 for single coverage and $2,000 for family coverage¹ offered with an HRA (referred to as HDHP/HRAs); and (2) high deductible health plans that meet the federal legal requirements to permit an enrollee to establish and contribute to an HSA (referred to as HSA qualified HDHPs).²

Seven percent of firms offering health benefits offer an HDHP/HRA, an HSA qualified HDHP, or both in 2006. Among firms offering health benefits, 1% offer an HDHP/HRA and 6% offer an HSA qualified HDHP. We estimate that 2.7 million workers are enrolled in HDHP/SOs in 2006, with 1.4 million workers enrolled in HSA qualified HDHPs and 1.3 million workers enrolled in HDHP/HRAs.

Each section of the report now includes information, where sample size permits, about HDHP/SOs as a distinct plan type. In this section, information is presented separately for HDHP/HRAs and HSA qualified HDHPs, including premiums, worker contributions to the spending accounts, firm contributions to the HRAs and HSAs, and the distribution of covered workers with various deductibles for single and family coverage.

Percentage of Firms Offering HDHP/HRAs and HSA Qualified HDHPs, and Enrollment

Seven percent of firms offering health benefits offer an HDHP/HRA, an HSA qualified HDHP, or both in 2006 (Exhibit 8.1). This is a higher percentage than we reported for 2005 (4%), but the difference is not statistically significant.
- Among firms offering health benefits, 1% offer an HDHP/HRA and 6% offer an HSA qualified HDHP (Exhibit 8.1). Firms with 1,000 or more workers are more likely (12%) than firms with 3 to 999 workers (6%) to offer an HSA qualified HDHP (Exhibit 8.2). The 12% of firms with 1,000 or more workers offering HSA qualified HDHPs is an increase from last year (4%). There are too few observations to look at firms offering HDHP/HRAs by firm size.
We estimate that 2.7 million workers are enrolled in HDHP/SOs in 2006, with 1.4 million workers enrolled in HSA qualified HDHPs and 1.3 million workers enrolled in HDHP/HRAs.
- The estimate of workers enrolled in an HSA qualified HDHP is higher than the 0.8 million enrollees we reported for 2005.³
Forty percent of workers covered by a HDHP/SO are in firms where 100% of covered workers in the firm are enrolled in the HDHP/SO. When firms offer an HDHP/SO and at least one other plan type, an average of 19% of covered workers in those firms are enrolled in the HDHP/SO.

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¹	There is no legal requirement for the minimum deductible in a plan offered with an HRA. The survey defines a high deductible plan as a plan with a deductible of at least $1,000 for single coverage and $2,000 for family coverage.

²	The definitions of HDHP/SOs do not include other consumer-directed plan options, such as arrangements that combine an HRA with a lower-deductible health plan or arrangements in which an insurer (rather than the employer as in the case of HRAs or the enrollee as in the case of HSAs) establishes an account for each enrollee. Other arrangements may be included in the survey as the market evolves.

³	Because we did not distinguish HDHP/SOs as a separate plan type last year, we are unable to calculate a standard error for last year’s estimated enrollment to test for statistical significance. As an alternative to the two sample t-test, we used a one sample t-test on 2006 estimates and find that enrollment in HSA qualified HDHPs is higher in 2006 than in 2005 (p=.0127). The one sample t-test is slightly less reliable, however, than the two sample t-test we ordinarily use.

	For more information regarding survey methodology, click here to view the Survey Design and Methods section.

The Kaiser Family Foundation and Health Research and Educational Trust
Program Area: Health Care Marketplace Project | Publication Date: 09/26/2006