Nearly half of employer plans have no in-network deductibles

Although many employers are considering full-replacement high-deductible plan offerings or trying to increase enrollment in existing HDHPs, nearly half of all plans still have no in-network deductibles, according to the 2012 Medical Plan Trends Report by HighRoads and Corporate Executive Board.

“While the prevalence of HDHP plans has roughly tripled in the last five years, companies are still offering traditional PPO plans, many of which do not charge for in network visits,” says Ania Krasniewska, senior director at CEB. “The absence of the right incentives and communications from organizations about the benefits of HDHP plans to individuals is driving employees to use these offerings that ultimately end up being significantly more expensive for organizations.”

The study also reveals that the difference between in- and out-of-network costs employees experience has increased substantially since 2011. In fact, out-of-network primary care physician co-pays have become 53 percent higher than in-network co-pays as opposed to a difference of just 16 percent in 2011.

“While there has been a lot of discussion in the marketplace about employers encouraging enrollment in high-deductible plans, we have found that a significant number of plans are contradicting that trend,” says Michael Byers, CEO of HighRoads. “Our finding that out-of-network primary care physician co-pays have risen substantially is also a cautionary tale for employees who may need to re-evaluate going out of network for certain services.”

According to the survey, there is inconsistency regarding the premium rates employers are charged for different coverage tiers. This can include employee plus one or employee plus family. The median premium for employee plus two is approximately 50 percent higher than the median premium for employee plus child or children, despite the fact that both tiers could theoretically cover the same situation of an employee plus two children. The survey recommends that employers should review the premium tiers available through their health plan providers to avoid unnecessary costs or administrative inefficiencies.

The survey also shows that 49 percent of health plans have in-network out-of-pocket-maximums at $2,500 or higher for individual coverage. Still, employees’ perceived value for a $2,500 OOPM is half of that for a $1,000 OOPM. Although more than one-quarter of plans have OOPMs of $5,000 or more, the level creates no employee perceived value.

“Medical plan communications should emphasize strategies and decisions employees can use to manage their health care costs and stress how uncommon it is for the average employee to actually encounter the OOPM,” Krasniewska says. “In the case of out-of-network co-pays, it is vital that benefits managers encourage employees to read their current plan information in order to avoid costly surprises.”

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