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According to Mercer’s National Survey of Employer-Sponsored Health Plans, March 2008, health cost increases have held steady for 3 years, and are likely to slow a bit in 2008. A major reason for this is the increase in enrollment in consumer directed health plans, (CDHPs) the type of medical plan with the lowest cost by far. In 2007, the percentage of employees enrolled in a CDHPs, which is based on a health savings account or health reimbursement arrangement, rose from 3% to 5% of all covered employees.
About half of large US employers now offer a CDHP, up from 39% last year. By 2009, 54% of companies plan to offer a CDHP, according to a study by CNN/Money.
There is growing evidence that CDHPs are cost-effective, delivering substantially lower cost per employee than either PPOs or HMOs in 2007. CDHPs encourage smarter spending, and have had a high level of employee acceptance.
“As employees shift from more expensive plans into less expensive ones, employers’ overall cost per employee drops,” says Blaine Bos, a Mercer worldwide partner. (Stephen Miller, SHRM, April 2008)
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