The Final Type of Group Health Insurance: Concluding with CDHPs

Posted on: December 23, 2019 by iSure

Welcome back! For the past few weeks, we’ve been taking in-depth looks at some of the most popular group health insurance plan options. We’ve already discussed the healthcare maintenance organization (HMO) and the preferred provider organization (PPO). In the conclusion to this series, we’re going to look at the final coverage type: the CDHP.

A Consumer-Directed Health Plan (CDHP) is a strategy that prompts employees to make decisions about their health care. CDHPs come in various forms, but typically it’s about offering a high-deductible health plan paired with a spending account for out-of-pocket costs. CDHPs encourage employees to make informed decisions and spend wisely; which in turn can lead to lower costs for the company. If you are considering this as an option for your employees, contact a group health insurance broker for a consultation and read on!

The Rise of CDHPs 

CDHPs have become a popular option for many individuals and businesses, and they continue to grow in popularity. CDHPs are health insurance plans that use high deductibles coupled with tax-advantaged personal health spending accounts (HSAs), raising consumer accountability for their own health care spending.

CDHPs are often confused with high-deductible health plans. A high-deductible health plan (HDHP) is a specific type of CDHP, which includes a deductible of at least $1,300 for an individual or $2,600 for a family.

CDHPs can save costs for payers and beneficiaries but may increase patient risks and be found to have little value to specific consumer groups. Speak to your group health insurance broker to find out how this plan may be of service to your business. 

Who Can Benefit from This Plan? 

Since CDHPs are based on low cost-sharing and higher deductibles, active engagement in purchasing decisions from the consumer is required.  These plans are likely to attract younger individuals with higher health literacy and a desire to control more of their spending.

Millennials tend to value their ability to interact with health plans and sponsors more than older generations. They are also more likely to be engaged when picking a health plan and making cost-conscious health care decisions and have a higher likelihood to engage in wellness and preventive health behaviors.

Younger generations tend to be more more likely than Gen-Xers and Baby Boomers to ask doctors for less expensive generic prescription drugs for treatments and utilize cost-tracking tools in order to manage healthcare costs.

When businesses are considering or promoting CDHPs to potential enrollees, it is in your best interest to make sure that the plan benefits align with consumer needs that effectively encourage smart healthcare utilization and meet the priorities of beneficiaries in different financial circumstances. A group health insurance broker can go over the specifics with you and help you determine what is best for your business’s unique needs.  

About iSure Insurance Brokers

After serving leaders in the Greater Miami market for more than three decades, iSure Insurance Brokers has become the provider of choice for discerning commercial clients and individuals alike. Because no two insurance programs are or should be alike, you can be sure that iSure will craft a comprehensive approach to protection that is as unique as you are. We welcome the opportunity to protect what you have worked so hard to build. Please contact us at (305) 223-2533 to learn more about what we can offer you.

Posted in: Blog Employee Benefits Group Health Healthcare Insurance