Six years ago, most employers probably wouldn't have said that their biggest health care challenge stems from their workers' poor health habits.

This year it ranked at the top of the list in a survey by the National Business Group on Health and Watson Wyatt, which examines current trends and best practices in employer-sponsored health benefits.

Nearly 65% of employers admit that the unhealthy lifestyle decisions made by employees present a considerable challenge in managing their health care costs.

"If the HR community doesn't do something about people's health, then we are not going to be able to manage health care costs," says Helen Darling, president of NBGH.

CDHPs to the rescue?

One way employers are hoping to get their workers healthier and reduce health care costs is by adopting consumer-directed health plans.

Yet despite criticism that the plans mainly benefit workers who are wealthy and healthy, rather than those with lower incomes and poorer health status, more employers are adopting a CDHP model.

By 2009, nearly 55% of U.S. corporations plan on offering a CDHP, reports Watson Wyatt/NBGH. After surveying 453 companies that employ 8.4 million workers and spend $60 billion on health care, Watson Wyatt/NBGH found that 47% of employers offer a CDHP, up from 39% in 2007 and 33% in 2006.

CDHPs hit the health insurance market in 2001. Since then, big employers have embraced them as a way to control health care costs and improve employee health and productivity.

Many laud the plans because they often offer programs that not only help workers to make informed health care decisions, but also provide them with information on the cost and quality of providers.

"A CDHP offers a way for companies to control costs while increasing employee accountability for health care decisions," says Ted Nussbaum, Watson Wyatt's director of group and health care consulting in North America.

Companies with at least half of their workforce enrolled in a CDHP had a two-year median cost increase of 3.6%, almost half that of employers without a CDHP, the survey report explains. In general, organizations with a CDHP witnessed a two-year median cost increase of 5.5%, versus 7% for companies without a CDHP.

Naturally, as more employers adopt the plans, the number of workers enrolled in CDHPs will increase. For instance, 15% of employees at organizations that offer CDHPs are enrolled in the plans this year, up from 8% in 2006 and 10% in 2007, the research shows. Still, only 6% of employers report 100% enrollment in a CDHP, which is expected to rise to 9% in 2009.

Preaching to the choir

Even with these numbers, only 2% of privately insured adults are enrolled in a CDHP with a tax-advantaged account, according to the Employee Benefit Research Institute and The Commonwealth Fund. What's more, only one in 10 insured adults had a high-deductible health plan without an account.

Although more employers are offering CDHPs, "enrollment has yet to take off," says Paul Fronstin, director of EBRI's health research and education program.

The 2007 EBRI/Commonwealth Fund survey, a nationally representative sample, questioned 4,217 privately insured adults ages 21-64.

The research shows the percentage of CDHP enrollees with household incomes above $100,000 increased to 31% in 2007, up from 22% in 2005, whereas only 19% of adults with incomes under $50,000 were enrolled in CDHPs in 2007, down from 33% in 2005. This lends credence to the argument that CDHPs and health savings accounts are more attractive to wealthy Americans than to middle class workers or low-income workers.

The study also found that CDHP enrollees are in better health, are less likely to smoke and are more likely to exercise.

Whether it's health coach initiatives or CDHPs, such measures will probably first resonate with workers who are already making smart decisions about their health care, says Anna Fallieras, program leader of health care initiatives at General Electric Co.

"As you build your strategies around employee engagement, you can start with those workers," she adds.

Eventually, employers will have to move beyond preaching to the choir and start to extend and expand their strategies to reach employees who are not going to make those types of decisions on their own.

"If we, as employers, are directing all of our resources toward employee who are doing the right thing, then we are really missing a huge portion of the value of health care consumerism," Fallieras asserts. Employers need to think more about benefit designs that "include more of a reach out that will actually engage the people who are not ready to reach in," she adds.

CDHP Programs and Strategies