Benefitfocus Report Shows When Midsize Employers Offer HDHPs, 34% of Employees Elect Them When Given the Choice

May 3, 2016


PPOs and HMOs still dominate, but forward-thinking employers moving toward consumer-driven health plan model, helping employees select plans to fit individual needs

Charleston, S.C. – May 3, 2016 – Benefitfocus, Inc. (NASDAQ: BNFT), a leading provider of cloud-based benefits management software, today released its “Benefitfocus State of Employee Benefits 2016 – Midsize Employer Edition,” a snapshot of real, but anonymous, benefit selection data from over 500,000 consumers across nearly 2,400 midsize employers on the BENEFITFOCUS® Platform. A follow-up to the inaugural study analyzing behavioral data from large employers, it found traditional health plans – primarily PPOs – dominate the mix for midsize employers (87 percent), but when given the choice, over one-third (34 percent) of employees selected an HDHP, with millennials over age 26 the most likely to opt in (40 percent). Forward thinking employers – 13 percent – now offer at least one high-deductible health plan (HDHP).

The data also indicates midsize employers are well positioned to avoid the Cadillac Tax, with no plans reaching more than 60 percent of the penalty thresholds on average. However, health care costs continue to rise and, with traditional plans that do little to discourage overutilization, it may also be in the best interest of midsize employers to consider how well their plan offerings actually fit the health and financial needs of their workforce and to help mitigate over- or underinsurance.

The report shows, regardless of health plan, employees are facing higher out-of-pocket costs, and with copays and coinsurance across both PPOs and HDHPs, the average family could spend nearly 40 percent more on health care in 2016 than food (using U.S. BLS data). To close this gap, many employers are funding health savings accounts (HSAs) and flexible spending accounts (FSAs). Yet adoption is low at both large and midsize companies, as eligible employees contributed on average less than half the maximum amount allowed.

“The report shows HDHPs are being well received, signaling a desire from employees to select plans that fit their lifestyles,” said Shawn Jenkins, Benefitfocus CEO. “To attract and retain talent, we’ll undoubtedly see employers drive more choice and innovation in the type of benefits they’re offering, and the process for plan selection. As this shift toward consumer-driven health plans continues, in what’s been a relatively unchanged process for decades, employers must make decision support, education and financial wellness a top priority to help in the transition.”

For more findings, download the full Benefitfocus State of Employee Benefits 2016 – Midsize Employer Edition.

Study Methodology

The “Benefitfocus State of Employee Benefits 2016 – Midsize Employer Edition” report analyzed anonymous benefit selection data from Benefitfocus’ data warehouse. The report includes data from over 500,000 records during the fall 2015 open enrollment period for approximately 2,400 midsize employers, all with 100-999 full-time employees.


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