Managed Care - May 2008 - (Page 51) PLAN WATCH Capping Rollover Amount Leads to CDHP Success Aetna releases a five-year study showing that companies that do this correctly can enjoy impressive savings By Frank Diamond C Aetna thinks it has found a way to help companies more easily offer a CDHP alongside other products, says Robin Downey, head of product development. onsumer-directed health care, in which so many have placed so much hope for so little return, at least in terms of the number of enrollees, comes with a structural defect. Companies have decided that if they offer a consumer-directed health plan (CDHP), then they must offer only a CDHP, or else it may prove too expensive. Why? Because most employees would find the CDHP to be too risky and choose a traditional product. Those who would join would tend to be younger and healthier and more likely to roll over more money from one year’s spending account to the next year’s account. Being able to roll money over is taken to mean that the employer shelled out more in pure health care expense that year than it needed to, although that might not always be the case, since many financial advisers say that members should pay their current expenses with after-tax money to allow beforetax money to grow, much like an individual retirement account or a 401(k) plan. Aetna believes employers might begin thinking of health care rollover money as an investment, rather than a loss, if employees participate in a meaningful way in prevention and disease management programs, and it addresses the problem with a program it calls Aetna HealthFund, in which a CDHP can be offered along with, for instance, an HMO and/or PPO if the employer, with Aetna’s help, places a huge emphasis on prevention and offers rollover money, but not too much rollover money. HealthFund employers can offer either a health reimbursement arrangement (HRA) or a health savings account (HSA). “The high-deductible health plan (HDHP) may also be an HMO with a deductible,” says Robin Downey, Aetna’s head of product development. “The HDHP may be selfinsured or fully insured. Most employers offer a CDHP (HDHP and fund) as an option, meaning the employee has the option to select the HDHP/fund or another option offered by the employer, which may be an HMO, PPO, or POS plan without an associated fund.” Six large employers participating in Aetna HealthFund have seen great results in cost effectiveness by carefully constructing the benefit design “so that the gap between the deductible and the fund was enough to continually keep the consumer being a consumer,” says Downey. “All but one put a cap on the amount that you could roll over. The employees are still getting a great benefit from a rollover, but they haven’t got so much rollover that for the next five years they don’t have to care what the deductible is because they’ve got enough money to overcome that deductible.” Follow the money She continues: “Employees do become possessive of the money in their HRAs, but they cannot put money in the fund and employees cannot take the fund with them if they leave. So they will spend it if they have claims. We find that in a HDHP with an HSA, they are more possessive since they can put their own tax-deferred dollars into the account. And whether you put the money in the HSA yourself or your employer does (or a combination of sources), the money is yours once it goes into the HSA and the HSA is fully portable so you can take it with you if you leave. So consumers are more possessive of an HDHP with an HSA than an HRA.” The six best-in-class companies, according to Aetna, saw savings of $15 million per MAY 2008 / MANAGED CARE 51
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