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. 

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.  

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. 

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 .

* 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.

Availability of Comprehensive Report as Downloadable PDF

• Free to participants in 2008 U.S. Health Plans Survey

• Free to subscribers of Culpepper Benefits Survey Package
  (includes Culpepper Library and Small Company Plus subscribers)

• $295 for non-participants and non-subscribers (Order Form)

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%

Copying. If you copy portions of this report into your own publication, please cite your source by including the following:

"Source: Culpepper Benefits Surveys, September 2008, www.culpepper.com"

• High-Deductible Health Plans (HDHPs) with Health Savings Accounts (HSAs)
  This Culpepper Benefits Trends Survey report focuses on High-Deductible Health Plans with Health Savings Accounts offered to U.S. employees, including eligibility & enrollment, monthly premiums, annual deductibles, out-of-pocket and lifetime maximums, as well as office visits and prescription drug co-payment amounts, and and company contributions to HSAs. (Order Form)

• Health ReimbursementArrangements (HRAs)
  This Culpepper Benefits Trends Survey report focuses on Health Reimbursement Arrangements offered to U.S. employees including eligibility & enrollment and company contributions to HRAs. (Order Form)