The following features that comprise a CDHP assist as described:
- a high-deductible health insurance plan (HDHP)
- a health reimbursement arrangement (HRA)
- information sources and tools to educate on health issues
- a conveniently accessible health coach or consultant
- a proactive medical professional empowered to actively assist in cases of serious crnoic conditions or ilnnesses.
Impact of CDHPs on consumer behavior and quality of care
- CDHP participants received the same or higher levels of care as those in traditional plans
- CDHP participants showed significantly higher use of preventative services
- CDHP participants received the same or higher levels of care for chronic conditions such as diabetes and hypertension
Are there any restrictions with respect to funding mechanisms or underlying plan types that may be used with CDHPs?
no, it may be fully insured or selfinsured
Why are HRAs not considered an ideal account structure?
Because they limit contributions to those expressly provided by the employer
typically combine high-deductible health plan with one of two types of individually controlled accounts (HRAs and HSAs) which can be used to pay deductibles and other costs not covered the HDHP. The ee then bears full responsbility for the diff between the fund amount and the deductible
basic plan design structure of a consumer driven health plan (CDHP)
Employer compliance issues apply to HSAs, HRAs, and FSAs in the following areas:
- ERISA
- nondiscrimination rules
- COBRA continuation
- trust requirements
The three legally recognized types of individually controlled accounts for health cost that could be used in a CDHP to take adv of tax treatments are:
- FSAs
- HRAs
- HSAs
Additional important CDHP plan design decisions include the following:
- preventive care
- full replacement vs. option
- employer contribution strategy
- HRA carryovers
To what extent does federal law mandate specific features within CDHP’s?
no specific or legally req’d fetures mandated per se, for a CDHP at the federal level
Key features of HSA’s
- fully owned by the employee
- ee has unfettered access to HSA funds, ever for nonmedical purposes. (however non medical are subject to income tax plus an additional 20% penalty)
- Portability - ee’s can take funds with them upon changing employers or leaving the workforce
- Unlikes HRAs and FSAs, HSA can only be utilized when it is coupled with an HDHP that meets specific criteria
What must an employer do to achieve success when implementing a CDHP?
- educate employees as to the true cost of medical services and their role in managing health care spending
- increase ee’s responsibility for medical purchase decisions through innovative plan designs with built-in incentives
- provide clinical & financial info to enable ee’s to be true healthcare consumers
- provide proactive clinical management and coaching to optimize provider efficiencies and course of treatment
