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Our Large Group Clients' Deductibles Are Shrinking: Benefitfocus

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A benefits administration tech company says the large employers that use its benefits enrollment system have reduced group coverage deductibles this year.

At large employers, deductibles for high-deductible health plan (HDHP) coverage have fallen an average of 2%, to $2,166 for single coverage and $4,331 for family coverage.

Deductibles for preferred provider organization (PPO) plan coverage have dropped 7% for single coverage, to $1,012, and 9% for family coverage, to $4,562.

(Related: 3 Peeks Through the Voluntary Benefits Curtains)

Benefitfocus Inc. has published data on group plan deductibles, premiums and other benefit plan characteristics in a new report on trends at 544 its large employer clients. Each of the companies has at least 1,000 employees in the United States. Together, the employers provide benefits for about 1.3 million people.

Retailers Are Different

Benefitfocus breaks out deductible data by industry as well as by coverage type.

For HDHP plans, average deductibles stayed about the same in every industry.

The industry differences in deductible trends for PPO plan coverage were dramatic.

The average PPO plan deductible stayed about the same for health care sector workers.

But the average PPO plan deductible fell sharply at large employers in every other sector. For single coverage, for example, the average PPO deductible fell 7% in education, to $1,056; 12% in manufacturing, to $879; and 38% in retail, to $864.

Two-Tier Health Benefits Programs

The decrease in average PPO deductibles may be partly the result of more employers shifting to two-tier health benefits programs. Some that offered PPO coverage only last year may be offering HDHP coverage together with traditional PPO plan coverage this year.

The percentage of large Benefitfocus clients offering two-tier health benefits programs climbed to 65% this year, from 56% in 2017. For retailers, for example, the share of employers offering traditional coverage together with HDHP coverage increased to 71%, from 54%.

Average deductibles at large retailers’ PPO plans could be falling partly because the retailers with the most generous PPO plans are the ones sticking with PPO-only health benefits programs.

But the shift toward two-tier programs may not explain all of the drop in average PPO plan deductibles.

In the health sector, for example, use of two-tier programs increased to 70% this year, from 51%. But, in spite of the health care employers’ increased use of two-tier programs, average deductibles for those employers’ workers are about the same this year as they were in 2017.

— Read HSA Coverage Use Grows — But Only at Large Employer Groups on ThinkAdvisor.

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