In use by roughly 4% of Americans with insurance coverage, consumer-driven health plans are by no means dominating the health insurance market. However, they continue to rise in popularity as employers search for viable ways to keep health care costs from veering out of control.

According to a recent Aon survey, a steady 44% of employers offered a CDHP to employees in 2009, but perhaps more telling for the future, while 83% included the high-deductible plans with health savings accounts or health reimbursement arrangements as a choice among other plan options, 17% implemented a full-replacement CDHP as their only health insurance plan - a trend the global consulting firm predicts will grow.

"We expect that number to increase next year," says Bill Sharon, Aon's national consumer driven health care practice leader. "In response to the economic downturn and double-digit health care cost increases, employers are becoming more aggressive in managing their health care costs. Implementing a total replacement CDH program is one of the leading health care strategies available to employers."

In the beginning

Even with 37% of those employers not currently offering a CDHP planning to offer one in the near future, plan sponsors understand that their employees remain wary of them. Concerns about high out-of-pocket costs (51%), traditional plan design preference (20%), lack of knowledge (10%) and a perception that they are too complex (5%) are top reasons why employers believe workers choose not to enroll in a CDHP, the Aon survey shows.

Fair enough. However, all of these reservations can be overcome with the right amount of communication and education, say CDHP experts. And for employers that have made a full-replacement switch, it can boil down to a matter of either helping employees get comfortable with their new responsibilities or risking low morale or turnover.

The not-so-secret approach to enrolling - and keeping - employees on these cost-saving accounts is frequent education, says Kathleen Frey, vice president, client engagement for OptumHealth Financial Services. Frey shares a tale of two large Atlanta-area employer groups' approach to CDHPs. Both plan sponsors added an HSA option during open enrollment for 2010.

One made the addition with no extra education or involvement from OptumHealth, while the other requested face-to-face meetings, brochures and open enrollment fairs on the product. "The first employer got 200 HSAs; the second is going to get a little over 10,000," says Frey, who conducted three of the fairs herself. "It's like light bulbs were going off for people when I explained to them how it works. What's interesting is people have this misperception that an HSA or a high-deductible health plan is only for the healthy - and that's not true."

Another often-overlooked fact is that once participants meet their deductible, the plan covers the remainder of health care costs for the year. Instead, employees focus on losing their "comfort zone" of low copays, says Frey.

The remedy is to redirect their attention to the triple tax savings achieved through a CDHP with an HSA. OptumHealth also uses Web seminars and vignettes to disprove another common fallacy: the belief that these plans are just for the healthy and wealthy.

When Brandon Luckett, vice president of business development with Kelly Benefit Strategies, meets with clients and prospects, questions surrounding CDHPs almost always surround the themes of "we don't understand them" or "we'd like to do one but we don't know how to implement it."

"That's really where we feel that education and communication is a big deal," says Luckett.

KBS has a dedicated communications department where the Maryland-based consultancy and TPA produces benefit guides, sends out open enrollment postcards and brands an overall communications strategy for clients. It's important to start the process early, Luckett stresses. He recommends putting a strategy together around nine months before introducing a new plan design.

At Cigna, the carrier has "a roadmap of communications" for employers planning to introduce a CDHP that also starts months before enrollment season, ideally in the spring, says Joe Mondy, company spokesman. Because Cigna offers an actuarial equivalent plan to more traditional PPO plans with an average deductible of $500, the biggest changes with a CDHP are typically a 20% lower premium than the PPO plan, with a $1,000 deductible where the employer contributes half.

The long timetable provides an opportunity to convince employees of this fact. "The biggest question is, 'Am I going to be losing things as a result of a CDHP?' In a properly designed CDHP you don't lose anything but it feels like things are really different," says Mondy.

To help members make the switch to a CDHP, Aetna works "very closely" with brokers and consultants to formulate the most effective communication packages for participants, says Kathy Campbell, head of product development.

During or even before open enrollment, Aetna provides plan sponsors with information about cost of care and proactive measures to take such as adhering to drug prescriptions - prepping them "so that during open enrollment when they sign up for the plans they have a better understanding," says Campbell, who along with all Aetna employees, has undergone a total replacement to a CDHP plan for her own health insurance.

Luckett's largest client, a self-funded company with more than 75,000 lives, went to a total replacement CDHP and saved "a tremendous amount of money," but most have only added the high-deductible plan as an option. "You still have to educate people and incentivize people to select that plan, otherwise it sits there, you have the option to choose it as an employee but you don't," he says. "Because first, you don't understand it; and second, somebody in your office says, 'Oh, that's too risky.' There's so much misinformation."

Now that CDHPs have been around for several years, there's enough data on them to demonstrate that "they do in fact save money and that the individual member or consumer sees this typically in lower premiums compared to other plan offerings," says Meredith Baratz, vice president of market solutions for UnitedHealthcare. "We find not only are more employers offering the plans - a surge of interest among our employer-based clients as we go into 2010 - but also ... consumers are taking a second look just based on the attractiveness of a lower premium, out-of-pocket cost."

The evolution of a culture of health in the workplace along with a host of easily accessible online support tools have made CDHPs much more user-friendly than when they first appeared around 2002-2003, adds Baratz.

Health Care Lane, a program on the UnitedHealthcare Web site, takes the user down a simulated small-town street with a pharmacy, post office, bank and grocery store. At each location the user can click on a short video to hear about ways to make the most of their CDHP. "If you go into the supermarket, you're met by Sam or Joe the grocer and he's there talking about selecting nutritious foods and why that's important," says Baratz. "It's probably no more than a minute and a half or two minutes long, but you walk away with some really good information and it's kind of fun and upbeat."

At OptumHealth, Frey has also found scenarios to be a most effective educational tool. In one real-life example, the CEO of a large company and "huge believer in HSAs" traveled the country to each branch location's open enrollment fair to speak firsthand about his own savings experience after switching from a brand name heart medicine to a generic.

Accounting 101

While it's certainly possible to have a high-deductible plan without some form of bank account attached to it, most CDHPs come hand-in-hand with an HSA or HRA. According to the Aon study, an increasing number of employers offering a CDHP choose to accompany it with an HSA (56%), while 35% use an HRA and 9% use both. In the last three years HSA availability has grown 8%, up from 48% in 2007.

Aetna uses their Navigator Web site to educate members on these account-based plans by letting members click on 30-second to two-minute clips where a character will walk them through optimizing their HSA or HRA. "That's been extremely popular," says Campbell, "very, very member-friendly."

Employers will take a variety of approaches when it comes to an account for their employees, says Baratz. "Some of them want to make sure that the HSA is used as a savings vehicle and they feel so strongly about it that they will put company money into the account on behalf of the employee," she says, while others don't contribute employer dollars, but suggest that employees take the money they're saving from reduced premiums and put that into their accounts. "So instead of sending the money into a broad risk pool of premiums, you're retaining that $100. Put it to work for you and let that be part of how you plan for your future medical expenses and health needs."

To get more employees engaged and aware of their HSA or HRA, many Aetna customers use health assessments as an incentive. For example, if an employee takes the assessment, the plan sponsor will put $50 into his or her account. "So instead of automatically populating the accounts with money, they actually engage the employees - sometimes even family members - to participate, and then hopefully once they start participating they'll see that the tools aren't so hard to use and they'll actually use them," says Campbell.

Frey has had a CDHP with an HSA through OptumHealth for the past year. One tip she picked up from personal experience is not to pay for services upfront. Having the bill go through the system will reduce the possibility of overpayment. She also works to have more money saved in her HSA than she spends, to take advantage of its tax-free status.

At KBS, Luckett takes it a step further by recommending that employees with an HSA leave all of their contributed dollars to grow tax-free in the account and use other money to pay for health care.

"From a financial advising standpoint and from a savings and investment standpoint, it's better to spend cash from outside your HSA if you can, and let your HSA money grow tax free," he says. "I'm not saying it happens; I'm just saying that's what a lot of people should do. Instead, they keep their money in their savings accounts and they use their HSA dollars. But their savings accounts, the interest is very low and it's taxable."

The money in HSAs must be used for health-related expenses, but for long-term planners, it will be openly accessible at retirement. "That's one of the things that people don't understand about HSAs," says Luckett.

HSAs are becoming more popular than HRAs in large part because they are more beneficial to the employee, he adds. Like a flexible spending account, unused HRA dollars do not roll over at the end of the plan year. And unlike an FSA, only the employer can contribute to an HRA.

Aetna finds great value in spending time and resources to educate employees on how to understand and make better use of their accounts. "If you take the noise away from 'how do you use the plan?' then it really allows them to spend the time instead on becoming better health care consumers," Campbell explains.

"Some years you spend more, some years you spend less. It actually is not a bad plan at all. Do I wish I had 100% coverage? Yeah. But I am a better health care consumer because of it."

Consumerism

About four or five years ago, when the idea of an employer asking its workforce to be more accountable for their own health was not as widespread as it is today, plan sponsors had a greater fear of CDHPs, says UnitedHealthcare's Baratz. "I think in the intervening years more and more employers have introduced a 'surround-sound' culture of health, so they are making sure that healthy foods are offered in the cafeteria, they are building walking or running trails around a corporate campus, they are moving to a smoke-free work environment," she says. "When you do those things and you are communicating the importance of health to your workforce, then when you introduce a plan like a CDH plan it tends to feel more culturally normal."

At Cigna, although CDHPs are actuarially equivalent to PPOs, the effect of the plans is remarkably different, says Mondy: "There is a significant decline in medical trend. It is actually negative in year one - which is when we usually see double-digit increases for the industry's typical plans."

The trend then continues to decline approximately 26% over the years, Mondy adds. Critics will ask how they are able to achieve cost savings without compromising care. The answer, he says, is through disease management programs - which have a 22% higher compliance rate among employees who participate in a CDHP.

Increasing wellness education so that members reduce the need for doctor's visits, maintenance drugs and medical procedures is a goal at Aetna as well. The carrier uses a health risk assessment to track employee needs and provide targeted health tips throughout the year, says Campbell.

When Aetna converted all company employees to a CDHP there was frustration at the beginning, Campbell admits. "Nobody likes the big deductible, but over time you get used to it and the noise dies down. People have a better understanding of how to use the plans, how to use the account," she says, "so that makes it better. But we're constantly re-educating."

Tools used to present information about quality and cost efficiency in care are continuing to evolve at UnitedHealthcare. Baratz shares how plan participants, via the company's Web site, can access information on their network of physicians that uses a star-based rating reflecting the doctor's performance. "What we've learned from the consumers is they want something that's a quick-and-easy, at-a-glance view," she says. "That's why we start with the stars."

Aetna uses a similar star designation, as well as information from WebMD on hospital mortality rates, readmissions and other performance evaluations, says Campbell.

Being enrolled in a CDHP leads employees to seek out cost-of-care information, think twice about elective procedures and take an active approach to their own care that is probably absent in a $20 copay plan. Most of the leading carriers now provide access to contracted reimbursement rates for common procedures and specific doctors in the member's geographic area.

Continued education

Although ongoing education should be part of any health plan, it is particularly important to keep up with a CDHP when employees have a greater responsibility for their own health care. What may have seemed minor or gone overlooked during the overwhelming influx of information at open enrollment is suddenly paramount when an employee is ready to schedule their first doctor's visit under the plan.

"I'm choosing an HSA for the first time and it's January, that's when it starts to hit: 'Oh my gosh, what did I do?' It's a big purchase and we've found in the first couple of months that satisfaction can dip," says Frey. "And the reason is because it's a new thing and while they made an educated decision in selecting it, they don't necessarily know how to navigate it."

The OptumHealth client that just added 10,000 employees to their CDHP is investing in Web seminars, dial-in Q&A sessions and onsite visits throughout January and February to refresh employees on how to make optimal use of the plans. "Now this is the 'how' in terms of how you go about using your HSA, reinforcing the value to it, really getting in front of them again so that that satisfaction increases," says Frey. "We've found that it increases about six months after they've been using it, but I'm really confident in saying it will increase even sooner than that if you do post-enrollment education."

A call center is available to all KBS clients year-round, says Luckett. "That's one of the services we provide that separates us from our competition, the ability to do that and take the burden of answering those questions from the HR department," he says. "Otherwise, they're sitting there answering questions constantly that prevent them from doing the other things that they want to do."

Giving employees too much information can have the opposite effect - leading them to ignore it altogether. It's about striking the right balance by knowing how to engage with members in all age groups, says Campbell: "Someone who's in their early 20s might be interested in a different type of e-mail and different information than someone who's in their 40s with a family."

Through proper education, the level of discomfort and concern with CDHPs has "dropped considerably" over the years, says Baratz. "As we continue to ask the American people to treat their health as an asset and to begin to be more involved in wellness and taking care of themselves and staying healthy and teaching people with chronic diseases how to best manage that care, that's not a conversation you have once," she says. "That's probably not even a conversation you have a couple times a year. That's an ongoing dialogue."

AlwaysCare Benefits' Erich Sternberg discusses the growing popularity of CDHPs and their effect on the dental, vision, hearing, life and disability markets at eba.benefitnews.com/podcasts.