CDHP Shows No Signs of Waning | Health Care Solutions and Benefits Management

Since the passage of ObamaCare, there has been much speculation about the future of consumer- directed health care (CDHC). While some fear that this is the end of employer-sponsored health care, others feel that the coverage mandates will provide an environment that will continue the trend of increased adoption of consumer-directed health plans (CDHP).

The rapid increase in CDHC plans indicates that employers are gravitating toward more cost-effective ways of delivering health care. CDHPs are running between 9%-15% less than traditional health plans. More than 40% of employers are offering a CDHP as an option, a number that is expected to rise to 60% over the next five years.

The popularity of CDHP, with proven cost savings and employee satisfaction rates topping 90%, shows no signs of waning.

Employers who are utilizing CDHC, or contemplating implementation, need to have a broker who will be able to act as a valued partner in the process. Your broker should be an expert in CDHC plans to provide you tutelage in ways to make sure plans are properly communicated to employees to increase adoption rates and satisfaction rates.

Here are some key questions that can shed some light on the level of CDHC expertise that a broker should be able to provide.

What Percentage of Their Clients Offer a CDHC Plan to Their Employees?

The answer to this question will shed light on the ability of the broker to understand and present the financial impact of CDHP plans to the employer. A high percentage indicates that the agent is well-versed in CDHP plans and has demonstrated an ability to partner with employers to implement these plans.

What Resources Does the Broker Utilize to Assist Employers in Designating a Plan to Meet Budget Expectations?

Find out what the process of selecting a carrier and plans actually looks like. Does the broker use generic spreadsheets? Walk in with a three-ring binder full of all the options from all the carriers and begin a long and arduous process of going through spreadsheets with every deductible option? Or does the broker have specific tools designed to provide decision support for employers. Tools to provide real-time interactive analysis can help employers find the specific plan or combination of plans that can meet budget constraints and still provide affordable, yet comprehensive coverage for their employees.

What Adoption Rates Do Their Clients Typically Obtain When Offering a CDHP as Part of a Multiple Plan Offering?

This is a key indicator of the broker’s ability to help employers properly communicate and educate the employees when it comes to CDHPs. Does the broker conduct employee meetings? Provide one-on-one support for employees that may need assistance in understanding the financial impact of their plan selection? Offer a variety of communication tools to provide plan specific information for their employees? If the broker can show high adoption rates, chances are the broker is providing these types of services and can help maximize your CDHC adoption rates.

How Will the Broker Be Compensated?

If a broker is compensated through premiums based on a level percentage of the premium, then the broker may not have financial incentive to explore lower premium insurance plans. If, however the broker is paid a set amount per employee per month from the carrier, there is no change in compensation to move to a lower-cost plan.

Sometimes it is possible to write the plans net of commission and set up a separate consulting arrangement to pay the broker directly for his/her services. Make sure you understand the compensation arrangements and try to discourage percentage commissions that reward brokers for keeping employers in higher cost plans.

By obtaining the answers to these relatively simply questions, you will gain insight on which broker may best be suited for assisting you in integrating CDHC as a key strategy for stabilizing health care costs.

About the Author:

Dan Morrill is president of product development at Dynamic Benefit Systems, a brokerage designed to provide the tools for the analysis, implementation,

communication, and ongoing support of CDHC plans. He is a member of the National Association of Health Underwriters. Contact Dan at 877-511-7944, dmorrill[at]dynamicbenefitsystems.com.