Consumer-driven health plans tooka leap forward last year when, for the first time, more companiesoffered such plans than offer HMOs, according to a survey of nearly2,000 companies by Aon Hewitt. Meanwhile, in a possible sighting ofthe next big trend in corporate health coverage, the survey showsthat more than a quarter of companies say they may take adefined-contribution approach to healthcare within the next fewyears by giving employees a set amount of money to buy insurance ona private healthcare exchange.

Fifty-eight percent of the companies surveyed by Aon Hewittoffered some type of consumer-driven health plan (CDHP) last year,up from 41% the previous year, while just 38% offered an HMO, downfrom 41%. Preferred provider organizations (PPOs) are still morecommon than either CDHPs or HMOS and were offered by 79% ofemployers.

Maureen Fay, senior vice president and head of Aon Hewitt's CDHPworking group, says the change in part reflects employers' paringback the number of their HMO offerings. “Over the past severalyears, employers have been doing a lot of consolidation of theirHMOs,” she says, citing companies that have gone from offering 50to 100 local HMOs down to just two national carriers.

Meanwhile, companies are making a bigger effort to enrollemployees in CDHPs, in part because of concerns about healthcarecosts, Fay says, noting that the trend of cost increases on CDHPsis two percentage points lower than that on PPOs.

“For many employers, they put it out there as an option; theydid some communication and education, but they weren't forcingemployees to go into these options,” she says. “With everythingthat's going on with the economy and healthcare reform, and cost issues, [they're saying], 'We need to move to afull-replacement basis, or if not full replacement, we need to movea significant number of lives into these plans so they can be aneffective vehicle for reducing healthcare costs.'”

The Aon survey shows that 34% of companies offer a CDHP with ahealth savings account (HSA), 18% provide a CDHP with a healthreimbursement account (HRA), and 6% offer a CDHP without acompany-sponsored savings account.

Companies that decide to offer a consumer-driven plan as theironly option tend to select an HRA, Fay says. “With an HRA, anemployer has a lot more flexibility with plan design,” she says.Finance departments prefer HRAs, she adds, because the money put inthe account is only drawn down as the employee spends it, whilemoney put into a health savings account becomes the employee'smoney.

Meanwhile, to alleviate concerns that employees might have aboutCDHPs, more companies are offering employees voluntary benefits,such as a critical illness plan or hospital indemnification.According to the survey, 6% of companies currently offer suchvoluntary benefits and 42% say they're considering doing so overthe next few years.

“They want employees to be comfortable if theyhave catastrophic issues,” Fay says, and notes that providingvoluntary benefits is more common at companies that offer only aCDHP to employees. But she questions whether the extra coverage isnecessary, arguing that consumer driven plans provide “a fairamount of protection.

“Based on survey data we have, the annual out-of-pocket max foran individual for consumer-driven plans is running between $2,000and $4,000,” Fay says, noting that that range is consistent withthe out-of-pocket maximums for traditional PPOs.

As healthcare costs continue to outpace inflation and ascompanies contend with the requirements of healthcare reform, thesurvey shows considerable interest in the new option of privatehealthcare exchanges. Such exchanges, which are separate from theexchanges the states are setting up, offer a number of health plansof different types from various insurers. Companies that use themgive employees a set amount of money to select their own healthcoverage from the exchange.

While just 2% of the companies surveyed currently provideemployees with access to an exchange, 26% say they are consideringdoing so within the next three to five year.

Fay says employers have been talking about the possibility of adefined-contribution approach to healthcare coverage even beforehealthcare reform was enacted, in response to not only the pace atwhich healthcare costs have been rising but also, for companiesthat are self-insured, the variability in claims from year toyear.

“Many employers had been looking at trying to find a way wherethey can define the level of their support and employees can go outand use that money to purchase healthcare that's right for them,”she says.

Aon Hewitt is launching its own multicarrier healthcare exchangeand announcedthis week that more than 100,000 U.S. employees will beselecting their healthcare coverage this fall through its exchange.The Wall Street Journal reported that Sears and Darden Restaurants will be using Aon Hewitt'sexchange.

For earlier coverage, see DC Model for Health Benefits and EarlyHealth Exchange.