It’s no secret that rising health care costs have consistently outpaced inflation and wage increases since 1998. On average, total health benefits cost $11,635 per employee and continue to grow at a rate of 5.9% per year . Due to these increased expenses, employers are looking at their bottom lines for ways to save on costs and are turning to consumer-directed health plans (CDHP) to pair with a Health Savings Account (HSA) as the answer. Since its inception, the number of employers offering these plans has continued to grow close to 10% year over year. Recent surveys show that CDHP adoption continues to grow as 22% of small employers, 36% of larger employers and 59% of jumbo employers now offer CDHPs, and nearly one in five employees are enrolled in one of these plans. Expectations for future growth in the market are optimistic, with predictions that 37% of employers of all sizes are considering offering only a CDHP in the next three years. For large employers, this number is almost doubled.
One of the strengths of a CDHP strategy is its ability to encourage good decision making, which is one of the ways employers can find cost savings. Because these plans call on members to utilize a larger portion of their own money to pay for health care expenses, they naturally seek lower cost and higher quality providers, while eliminating unnecessary care. CDHPs address rising health care costs at their source – particularly prescription drug prices, laboratory services, and amount of use, which costs the United States health system an estimated $238 billion per year.
It’s this behavior that not only saves employees money, but also drives down the costs for the employer sponsoring the plan. Consumers who migrate to a CDHP paired with an HSA can help reduce health care costs by $527 per individual per year. This is behavior change is a necessary component because it will ultimately be the employees’ smart use of the health care system that will cut health care expenses for the entire company. Among those enrolled in a CDHP, 52% are more likely to ask for a generic drug versus 36% of those enrolled in a traditional plan. Organizations that have introduced CDHPs paired with an HSA have seen the potential to reduce total spending by 25% through individual behavior change within the first year of implementation.
For individuals that are new to the CDHP market, understanding these plans can be daunting. SelectAccount’s team supplies in-depth communication and education to assist consumers as they learn to navigate their CDHPs, resulting in more informed, intelligent decision making and a smoother transition from their old health plans. SelectAccount’s full suite of medical spending accounts — HSA, FSA, HRA, DCAP and TRA — paired with Wallet Doc consumer tools, provide employers the means to cut down on costs without negatively affecting their employee population.
SelectAccount offers flexible account options that give CDHP participants the ability to use tax-free, personal funds to invest in their health and thereby take ownership of their health care dollars. HSAs provide consumers a safe and secure vehicle for retirement savings that can supplement other traditional accounts like 401(k)s, giving people more freedom with how they spend their health care dollars.
This idea of ownership that comes along with opening an HSA supports the notion that the consumer is the one who owns, manages, and guides their health plan. This fits perfectly into the consumer-centric picture being painted by the current trends and future projections in health care. As these predictions come true and health care reforms are realized, the value of CDHPs and HSAs will continue to be recognized by both employers and employees as the effective and affordable option to manage rising health costs.
For more information on CDHPs and eligible medical savings accounts, contact SelectAccount at 1-855-363-2583 or email at SASales@SelectAccount.com
 Mercer National Survey of Employer-Sponsored Health Plans 2015
 EBRI Consumer Engagement in Health Care Survey 2015