Sept. 28, 2016

BlueEdgeSM Consumer-directed Health Plans (CDHPs) Can Help Reduce Medical Costs

Controlling health care costs continues to be one of the most significant challenges facing employers. Health care costs are expected to climb 6.5 percent in 2017 if employers do not make any changes to their current benefits structure.

At Blue Cross as Blue Shield of Texas (BCBSTX), we’ve seen that health care costs can be favorably affected when employees transition from a more traditional health plan to a BlueEdge CDHP (Consumer-directed Health Plan). Offering BlueEdge HSASM (Health Savings Account), BlueEdge HCASM (Health Care Account) and BlueEdge FSASM (Flexible Spending Account) is a tried-and-true approach that can help motivate employees to choose effective health care options that are also cost efficient.

In an internal study, we found that during the first year following the switch to a BlueEdge plan, per-member-per-year spend was reduced by 7.1 percent.* The reduction in spending continued – and even improved – to 9.3 percent in the first three years after migration. While lowering overall spending, BlueEdge members maintained or improved their use of preventive care services. For more findings, see the BlueEdge Value Story brochure.

CDHPs are gaining in popularity with both employers and employees. More employees choose CDHPs each year as they become more familiar with the benefit design and learn how to manage a higher deductible. In 2013, 18 percent of all covered employees were enrolled in a CDHP. By 2014, that number had climbed to 23 percent, and in 2015, it rose to 25 percent.

Employers can choose from several custom CDHP options:

  • BlueEdge HSA can be funded by the employer and employees, up to $3,400 for individual plans or $6,750 for family plans in 2017. It is paired with a qualified high-deductible health plan that provides coverage for benefits after the deductible has been met. HSA funds can be used tax-free for qualified medical expenses for employees and their spouses and dependents. Any unused funds carry over to the next plan year, and employees can take the money with them if they leave their job.
  • BlueEdge HCA is a reimbursement account that can be combined with other health coverage. The employer owns and funds the HCA, and funds can be carried over to the next plan year if the employer chooses. Any funds left over are a direct savings to the employer.
  • BlueEdge FSA is typically funded by the employee only, but can be funded by the employer as well, up to $2,550 for 2016.**It does not have to be paired with a high deductible health plan. Up to $500 per year can roll over if permitted by the employer. All FSA funds are available to the enrolled employee at the beginning of the plan year, but if the employee leaves, any remaining funds belong to the employer.

Blue Cross and Blue Shield of Texas can help you introduce BlueEdge plans as part of a phased approach to consumerism and transition from standard PPO products to these progressive solutions over the next few years. We also offer tools to help employees make the best use of their benefits, including an online cost of care estimator, hospital and physician quality information, health education and more.

From claims analysis, benefit design and contribution strategy to employee education and engagement tools, BCBSTX has the experience and resources to make your clients’ CDHP adoption a success. Contact your account representative today to learn how BlueEdge plans can help you meet their health care cost management goals.

Note: Minimum group size requirements may apply.

*This case study is just an example. Results may not be typical for all group health plans and can vary. Past performance is not a guarantee of future results.

**2017 limits will be set by the Internal Revenue Service later this year.

Sources: Medical Cost Trend: Behind the Numbers 2017, PwC Health Research Institute; Internal CDHP Study, 2015; 2015 National Survey of Employer-Sponsored Health Plans, Mercer