Consumer-Driven Health Care: What Is It, and What Does It Mean for Employees and Employers?
"Some employers are considering the switch to consumer-driven health plans (CDHPs) in order to reduce the cost of providing health insurance benefits to their employees. Because CDHPs generally have lower premiums, they might be a popular choice for some employees. Employers and employees will need to carefully weigh the costs and benefits of CDHPs compared with more traditional health insurance plans before deciding which type of plan to use.

The cost to employers of providing health insurance to their employees has been rising for decades.1 Estimates from the National Compensation Survey (NCS) indicate that the average cost for the private employer to provide health care insurance has risen from $1.03 per hour worked in March 1999 to $2.00 per hour worked in March 2009, a change from 5.4 percent to 7.3 percent of total compensation.2 Chart 1 displays the rising cost for the private employers.

Interestingly, the costs to employees have increased as well. NCS estimates indicate that the average medical plan monthly flat-rate premium paid by private industry workers in single and family coverage has increased from $67.57 (single) and $264.59 (family) in 2004 to $92.43 (single) and $349.36 (family) in 2009.3 Even though the cost for both employer and employee has increased, the proportion of cost for the employer and employee has remained similar. In 2003, private employers’ share of the premium for single coverage reflected 82 percent of the total premium, whereas the employees were responsible for the remaining 18 percent. In 2009, the employer’s share for single coverage was 80 percent compared with 20 percent for the employee’s share. The share for family coverage was at 70 percent for the employer and 30 percent for the employee in 2003 and in 2009..."