Aon Hewitt Research Finds Consumer-Driven Health Plans Continue to Grow in Popularity

CDHPs are the Second Most Prevalent Plan Offered by U.S. Employers

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Oct 09, 2013, 09:00 ET

LINCOLNSHIRE, Ill., Oct. 9, 2013 /PRNewswire/ -- In an effort to rein in health care costs and encourage employees to take greater responsibility for their health, new research from Aon Hewitt, the global talent, retirement and health solutions business of Aon plc (NYSE: AON), reveals that a growing number of employers offer or plan to offer consumer-driven health plans (CDHPs) to employees. Aon Hewitt's research shows CDHPs have become the second most prevalent plan offered by employers after preferred provider organizations (PPOs), and could potentially surpass PPOs as the most common plan type offered in the next three to five years.

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According to Aon Hewitt's 2013 Health Care Survey of nearly 800 large and mid-size U.S. employers covering more than 7 million employees, 56 percent of employers currently offer CDHPs as a plan choice, and another 30 percent are considering offering one in the next three to five years. While 10 percent of employers offer CDHPs as the only plan option, another 44 percent are considering doing so in the next three to five years. In 2012, employers reported at least a 2 percentage point lower cost trend for CDHP plans (4 percent) versus other plans, including PPOs (6 percent), HMOs (7 percent) and Exclusive Provider Networks (6 percent).

"With many of the operational details of health care reform yet to be implemented, employers are confronting the realities of compliance and the significant challenges they face in controlling future health care costs," said Maureen Fay, senior vice president at Aon Hewitt. "Employers are increasingly embracing plan designs that are cost-effective, promote consumer choice and accountability, and encourage employees to be more deliberate in how they spend their health care dollars."

To encourage employee enrollment in CDHPs, employers are using a variety of tactics, including subsidizing premiums at a higher level than they do for other plan options (44 percent), making the high-deductible plan the default plan option (22 percent) and covering preventive medicines before the deductible applies (44 percent).

A growing number of employers are also considering offering elective benefits that reduce consumers' short-term fears that they will not be able to afford a catastrophic illness in the long-term if they have a plan with a high deductible. While just 9 percent offer elective benefits in conjunction with a CDHP today, another 44 percent of employers are considering adding this type of coverage in the next three to five years.

Early Evidence Consumerism Drives Satisfaction and Behavior Change
Recent Aon Hewitt's research¹ shows more than three-quarters of consumers currently enrolled in a CDHP were satisfied with their plan choice (78 percent) and 89 percent said they planned to re-enroll. Of those employees who had been in a CDHP for more than two years, 97 percent planned to re-enroll.

In addition, Aon Hewitt's research shows a correlation between participation in a CDHP and making more informed health decisions. Sixty percent of employees who were enrolled in CDHPs said they made positive behavior changes related to their health. Twenty-eight percent said they received routine preventative care more often, 23 percent sought lower-cost health care options and 19 percent researched health costs more frequently.

"Effective consumer-driven health plans are designed to help change employee behaviors by encouraging employees to make better informed health care decisions and to take ownership for actively managing their health through prevention and lifestyle choices," said Jim Winkler, chief innovation officer for Health & Benefits at Aon Hewitt. "Incentives also play a critical role in motivating employees to change behavior. Initially, extrinsic incentives help engage employees in focusing on behavior change. Over time, as healthy behavior patterns start to stick and employees feel good about the results they have achieved, employers can shift their focus more toward intrinsic motivators."

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About Aon Hewitt
Aon Hewitt empowers organizations and individuals to secure a better future through innovative talent, retirement and health solutions. We advise, design and execute a wide range of solutions that enable clients to cultivate talent to drive organizational and personal performance and growth, navigate retirement risk while providing new levels of financial security, and redefine health solutions for greater choice, affordability and wellness. Aon Hewitt is the global leader in human resource solutions, with over 30,000 professionals in 90 countries serving more than 20,000 clients worldwide. For more information on Aon Hewitt, please visit www.aonhewitt.com.

About Aon
Aon plc (NYSE: AON) is the leading global provider of risk management, insurance and reinsurance brokerage, and human resources solutions and outsourcing services. Through its more than 65,000 colleagues worldwide, Aon unites to empower results for clients in over 120 countries via innovative and effective risk and people solutions and through industry-leading global resources and technical expertise. Aon has been named repeatedly as the world's best broker, best insurance intermediary, reinsurance intermediary, captives manager and best employee benefits consulting firm by multiple industry sources. Visit www.aon.com for more information on Aon and www.aon.com/manchesterunited to learn about Aon's global partnership and shirt sponsorship with Manchester United.