Companies going to high-deductible health insurance plans

— -- As workers enroll in health insurance for the new year across the USA, many are discovering their companies are moving to high-deductible health plans.

Health care experts say the move reflects a larger shift toward what the industry calls "consumer-driven" health plans, in which lower premiums and a high deductible encourage consumers to be more conscious of medical-care costs and more cautious about undergoing expensive procedures, thus driving down costs for employers.

In general, consumer-driven plans have moderately lower premiums but twice the deductible of conventional health insurance, according to the Kaiser Family Foundation.

In plans where deductibles are covered by a health savings or health reimbursement account, workers have to pay an average deductible of $1,908, a 2011 Kaiser survey showed. Traditional health plans, on average, have deductibles well under $1,000.

Roughly 180,000 Wells Fargo employees must choose between two high-deductible health plans for next year, said Justin Thornton, Wells Fargo's compensation and benefits manager. A third of Wells Fargo's 270,000 employees are already enrolled in a high-deductible plan by choice, Thornton said. The other two-thirds must choose by year's end.

General Electric introduced consumer-driven plans to its salaried workforce in 2010, and beginning in January the company will move all U.S. employees into some version of a high-deductible plan, said Ginny Proestakes, GE's director of health benefits.

"With annual cost increases at anywhere from two to three times the rate of inflation, we felt to remain competitive we needed to find a new benefits model," Proestakes said in a statement.

American Express went exclusively to high-deductible health plans for employees in 2008, company spokeswoman Caitlin Lowie said. John Deere has made the same move, according to the Employee Benefits Research Institute. So has Textron, which makes Bell helicopters, said Paul Fronstin, director of health research at EBRI.

High-deductible plans have been a popular option for young workers who rarely need medical care and want to pay lower premiums.

Forty-one percent of companies in the U.S. now offer Health Savings Accounts (HSA), the more popular of the two savings vehicles for high-deductible plans, according to a 2011 report by Towers Watson. Another 12% of companies plan to add an HSA option in 2012, the report says. The other option is a Health Reimbursement Account. (HRA).

In high-deductible plans tied to an HSA, the insured saves money tax-free and uses it to help cover his or her deductible and other medical costs. It carries over year to year and from one job to another. In plans with Health Reimbursement Accounts, a designated amount is paid by the employer to cover the deductible and other medical expenses. Only the employer can pay into it. Reimbursements for medical expenses are tax-free, and it carries over year to year. It cannot be carried to a different company.

According to Kaiser, average premiums are higher for programs with HRAs, but deductibles are lower, and companies contribute more to HRAs, on average, than HSAs.

The percentage of workers enrolled in either type of high-deductible plan has quadrupled since 2006, to 17%, according to Kaiser.

"It's safe to say we expect enrollment in consumer-driven health plans to continue to grow," said Dan Kueter, CEO of UnitedHealthCare of Iowa and Central Illinois.

UnitedHealthCare has 3.8 million people enrolled in either HSA or HRA plans, a spokesman for the company said.

Wells Fargo has offered consumer-driven plans since 2004, and a third of employees have already chosen to go with one of the two plans. The majority of those have chosen the HRA, because the company pays $1,000 each year toward a $2,000 deductible under that scheme, Thornton said.

"We would expect most employees to go with the HRA," he said.