We report results from a 2008 Culpepper Benefits Trends
Survey on health plans offered to U.S. employees.
Key Survey Findings:
-
PPOs continue to be the most popular health plan, with 85
percent
of companies offering PPO plans to U.S. employees.
-
High-Deductible Health Plans (HDHPs) with Health Savings
Accounts (HSAs) continue to gain ground, with nearly one out
of four companies offering a HDHP.
-
Common methods to control health plan costs and expenses
include raising deductibles and
co-payments and changing service providers.
Note: Respondents could
choose more than one plan.
Preferred
Provider Organizations (PPO)
A PPO is a managed care health plan that controls costs by
encouraging the use of a network of providers who have agreed to
discount their normal fees. PPO plans are popular because they
provide a broad choice of providers and do not require a primary
care physician gatekeeper for referrals to specialists.
Patients have the option of choosing both in-network and out-of
network providers.
PPO plans are the most popular health
plan, with 85 percent of companies offering PPO plans to U.S. employees
in 2008 (Figure 1). On
average, PPO
premiums range from $370 for employee-only coverage to $1,093
for family coverage.
* Note:
Premiums vary significantly by company size and level of
coverage. The comprehensive version of this report includes the
amount of premiums paid by companies and breakouts by company
size and level of coverage.
Health
Maintenance Organizations (HMOs)
An HMO is a managed care health plan that controls costs by
encouraging preventative care and restricting care to an
approved network of providers who have agreed to discount their
normal fees. HMOs require patients to select a primary care
physician who serves as a gatekeeper for referrals to
specialists. Compared to other managed care plans (e.g., PPO,
POS), HMO plans are typically more cost effective because they
do not include out-of-network providers.
HMO plans are the second most popular
health plan, with 36 percent of companies offering HMO plans to U.S.
employees in 2008 (Figure 1). On average, HMO premiums
range from $328 for employee-only coverage to $882 for family
coverage.
* Note: Premiums vary
significantly by company size and level of coverage. The
comprehensive version of this report includes the amount of
premiums paid by companies and breakouts by company size and
level of coverage.
Point-of-Service (POS) Plans
A POS plan is a managed care health plan that looks like a
hybrid of a PPO and HMO plan. Similar to PPO Plans, most POS
plans have a broad choice of providers and allow patients to
choose both in-network and out-of-network providers. Similar to
HMO plans, most POS plans require patients to select a primary
care physician who serves as a gatekeeper for referrals to
specialists.
Eighteen percent of participating companies currently offer POS
plans to U.S. employees (Figure 1).
Exclusive Provider Organization (EPO)
Plans
An EPO plan is a managed care system
that arranges for medical care through contracted physicians and
healthcare service providers. Similar to HMO plans, most EPO
plans require patients to select a primary care physician who
serves as a gatekeeper for referrals to specialists.
Only five
percent of participating companies currently offer EPO
plans to their employees (Figure 1).
Indemnity Plans
Indemnity plans, also
known as “Fee-for-Service” plans, are medical insurance
plans that provide cash reimbursement for covered medical
services. Indemnity plans are not restricted by a specified
network of providers and do not require a primary care physician
who serves as a gatekeeper.
Traditional indemnity plans are more flexible than managed care
plans (HMO, PPO, POS). However, they are not widely used because
they are more costly. Only four percent of participating
companies currently offer indemnity plans to their
employees (Figure 1).
Self-Funded / Self-Insured Plans
A self-funded or
self-insured plan is a benefits plan funding method in which the
employer carries the risk for any claims. The employer may
contract with a third-party organization to pay claims on its
behalf, or administer the program itself.
In general, as companies increase in size they are more likely
to self-fund their health plans. All reporting companies with
more than 1,000 employees self-fund their health plans.
Note: Respondents could
choose more than one account.
Flexible
Spending Accounts (FSAs)
FSAs are
tax-advantaged accounts that allow employees to set aside
money on a pre-tax basis to pay for qualified medical, dependent
care, and adoption expenses. The primary disadvantage of
FSAs is the “use it or lose it“ provision, whereby unused funds
at the end of a coverage period are forfeited back to the
company and may not be carried forward.
Ninety-two
percent of participating companies currently offer medical
FSAs to their employees
(Figure 2).
Health
Savings Accounts (HSAs)
HSAs are tax-advantaged savings
accounts for employees enrolled in a qualified
High-Deductible Health Plan (HDHP). Similar to IRA and
401(k) retirement accounts, HSAs are owned by the employee.
Contributions can be made by both the employer and the employee.
Employees can use HSA funds to pay for qualified medical
expenses. Funds remaining in the account at the end of the year
are carried forward and may be used to cover future qualified
medical costs.
Twenty-three
percent of participating companies currently offer HDHPs with
HSAs to their employees and an additional eight percent plan
to next year (Figure 2). As companies increase in size, they are more
likely to offer HDHPs with HSAs.
Note: Data for company contributions to HSAs is available in our survey covering
High-Deductible
Health Plans with HSAs.
Health
Reimbursement Arrangements (HRAs)
HRAs (also known as Health Reimbursement
Accounts) are
tax-advantaged reimbursement arrangements established and funded
solely by employers. Employees can use HRA funds to pay for
qualified medical expenses. Funds remaining in the account at
the end of the year are carried forward and may be used to cover
future qualified medical costs.
Fourteen
percent of participating companies currently offer HRAs
to their employees and an additional four percent plan to next
year (Figure 2). As companies increase in size, they are more likely to
offer HRAs .
Note: Data for company contributions to HRAs is available in our survey covering
Health Reimbursement
Arrangements (HRAs).
* Additional Data Tables
for PPO and HMO Plans
In addition to the
data presented above, we provide a more comprehensive
report
with 19 additional data tables showing premiums,
deductibles, out-of-pocket maximums, lifetime limits,
co-payments, and medical accounts for PPO and HMO plans.
Breakouts are available by company size.
The
comprehensive version of this report with additional data is
available to:
Data Source: Culpepper Benefits
Survey of 153 organizations.
Survey Dates: July-August 2008
Breakdown by Industry Sector:
Technology 73%, Life Science
16%, Other 11%
Breakdown by Number of Employees:
Up to 100:
38%, 101 to 1000: 44%, Over
1,000: 18%
Breakdown by Corporate Status:
Private 63%, Public
31%, Non-Profit 5%, Other 1%
Authors:
Jeremy Greenup,
CCP
Leigh Culpepper,
CCP, GRP, CBP
Copying.
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cite your source by including the following:
"Source:
Culpepper
Benefits Surveys, September 2008,
www.culpepper.com"
