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PPOs still No. 1, but high-deductible health plans a close second

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More than one-third of employees at midsize companies opt for high-deductible health plans over traditional coverage options, according to a study released Tuesday.

Thirty-four percent of employees selected an HDHP for 2016 when it was offered alongside a traditional health plan, with millennial employees over age 26 the most likely to choose the option at 40%, according to the report by benefits management technology provider Benefitfocus Inc., which analyzed enrollment data from 2,400 midsize employers using its technology platform.

Forty-three percent of employees opted to enroll in a preferred provider organization plan, and 14% chose a health maintenance organization, the study showed.

Still, even as the second most-popular plan choice among employees, only 13% of midsize employers studied — those Charleston, South Carolina-based Benefitfocus defined has having 100 to 999 employees — offered at least one HDHP and only 2% offered only a HDHP.

PPOs and HMOs remain the dominant health insurance offerings at midsize employers.

Regardless of the health plan type, deductibles are on the rise.

HDHPs at midsize employers on the Benefitfocus platform have an average deductible of $2,382 for individual coverage and $4,889 for family coverage, according to the study.

The average PPO has an average deductible of $1,415 for individual coverage and $3,403 for family coverage. Those deductibles legally qualify the average PPO as an HDHP, which is defined by the Internal Revenue Service as having deductibles of $1,300 for single coverage and $2,600 for families, according to Benefitfocus.

“The report shows HDHPs are being well-received, signaling a desire from employees to select plans that fit their lifestyles,” Benefitfocus CEO Shawn Jenkins said in a statement Tuesday. “To attract and retain talent, we'll undoubtedly see employers drive more choice and innovation in the type of benefits they're offering, and the process for plan selection. As this shift toward consumer-driven health plans continues, in what's been a relatively unchanged process for decades, employers must make decision support, education and financial wellness a top priority to help in the transition.”