5500 Preparer's Manual for 2012 Plan Years
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from Spencer’s Benefits Reports: When given a choice, most individuals with traditional health coverage said that they chose that option because it offered a good network of providers, according to recent research from the Employee Benefit Research Institute (EBRI). In contrast, the study, Private Health Insurance Exchanges and Defined Contribution Health Plans: Is It Déjà Vu All Over Again?, found that among those with consumer-driven health plans (CDHPs), most cited the lower premiums and opportunity to save money in a health account.
While close to half of all private-sector workers who have health insurance are offered a choice of health plans, most of those with a choice work for large firms, according to EBRI. In 2011, 84 percent of employers offering health benefits offered only one health plan; 15 percent offered two choices; and 1 percent offered three or more choices. Forty-two percent of large firms offered two or more choices of health plans, compared with 15 percent of smaller firms. Some three-fifths (59 percent) of adults ages 21 to 64 with employment-based health coverage had a choice of health plans, according to the 2011 EBRI/MGA Consumer Engagement in Health Care Survey on which these results are based.
“Most Americans get their health insurance coverage from employment-based plans, yet most employers do not offer a choice of health plans,” said Paul Fronstin, director of EBRI’s Health Research and Education Program. “Health plan choices are likely to expand via the expansion of insurance exchanges under the Patient Protection and Affordable Care Act, so it’s important to know how people make their decisions when they do have a choice.”
“Increasing choice of health plans is a key goal of the [ACA],” Fronstin noted. “The public health insurance exchanges contemplated in [ACA] are based on Alain Enthoven’s model of managed competition, which entails sponsors negotiating with insurers on behalf of groups of individuals to develop a menu of choices among different plans.” Small employers who up to now may not have had the capability to offer their employees a choice of health plans, might consider joining a private ACA exchange to increase their employees’ choices of plans, Fronstin commented.
EBRI defines high-deductible health plans (HDHPs) as plans with individual deductibles of at least $1,000 and family deductibles of at least $2,000. The CDHP sample comprises plan participants with an HDHP and either a health reimbursement arrangement (HRA) or a health savings account (HSA) and those with deductibles that are generally high enough to meet the qualifying threshold to make tax-preferred contributions to an HSA, but without an account comprise the HDHP sample.
In 2011, 68 percent of CDHP enrollees and 48 percent of those with HDHPs had a choice of health plans, compared with 59 percent of individuals in traditional plans (plans with no deductible or deductibles lower than those in HDHPs).
Among individuals with a choice of plans, the findings include the following:
For more information on the report, published in the July EBRI Notes, visit http://www.ebri.org.
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