Dive Brief:
- Traditional health plans – primarily Preferred Provider Organizations (PPOs) – continue to dominate the mix within midsize employers (87%), but when given the choice, over one-third (34%) of employees go with a high deductible health plan (HDHP) option if available, according to a survey from Benefitfocus.
- The survey, "State of Employee Benefits 2016 – Midsize Employer Edition," also found that millennials over age 26 are the most likely (40%) to opt in to an HDHP, and forward-thinking employers (13%) now offer at least one high-deductible health plan (HDHP).
- The survey, which includes benefit selection data from over 500,000 consumers across nearly 2,400 midsize employers, also found that midsize employers are poised to avoid the Cadillac Tax, with no plans reaching more than 60% of the penalty thresholds on average.
Dive Insight:
Regardless of health plan selected, employees continue to see higher out-of-pocket costs. With copays and coinsurance across both PPOs and HDHPs, the average family could spend nearly 40% more on health care in 2016 than food, according to U.S. Bureau of Labor Statistics data.
To close this gap, Benefitfocus' survey found that many employers are funding health savings accounts (HSAs) and flexible spending accounts (FSAs). But adoption is low at both large and midsize companies, as eligible employees contributed on average less than half the maximum amount allowed.
Shawn Jenkins, Benefitfocus CEO, says the report shows that HDHPs are being well received, as employees look to select plans that fit their lifestyles. So to attract and retain talent, Jenkins expects to see employers drive more choice and innovation in both the type of benefits and the process of choosing a plan they offer.