Consumer-directed health plans are the new kids on the benefits block, and data on their long-term appeal and influence are just starting to come in.
But enrollment in health savings accounts, health reimbursement arrangements and flexible spending accounts is surpassing analyst projections by a wide margin. CDHC is planting itself alongside traditional insurance as a viable health plan option as it grows in popularity and takes hold of the critical mass.
A recent study from consulting firm Watson Wyatt predicts that next year 40% of companies will decrease their benefit plan options and will either keep or add an HSA. This research also suggests that more employers will offer a CDHP as their company's only benefit plan option; currently, 5% of employers offer a CDHP on a total replacement basis and an additional 4% are expected to follow suit in 2008.
It's clear that brokers need to step up or get out of the game as a result of this consumer-centric shift. Employers want to see their options, and learn about new strategies.
The steady employer exodus from traditional plans means more CDHPs in the pipeline and big earning opportunities for motivated and educated insurance professionals.
At many leading-edge benefits brokerage firms, every client sees at least one CDH proposal at renewal time.
Nevertheless, many employers are reluctant to pull the trigger on a new CDH initiative, partly because the learning curve appears to be so steep.
That is why now, more than ever, CDH education is essential, and it begins with the broker.
Brokers need to make sure employers and their employees understand the entire CDH program. That means the plan design, consumer health finance tools including debit cards and accounts, and wellness advocacy. It's not just about insurance anymore.
Educating the broker
It's apparent that CDHC can save employers money, but there are many moving parts to the solution: accounts, insurance, employee communications, and education programs that promote behavior change.
The National Association of Health Underwriters, Arlington, Va., has launched a CDH certification program designed to clarify CDHC, so brokers can explain, sell and implement plans with confidence.
