Survey Shows that CDHPs Increase in Adoption.

Pressured by rising health care costs and a recession, more U.S. employers used cost shifting in 2010 than the prior year, according to the Wells Fargo Benefits Marketplace Survey. According to the report, employers also continue to offer Consumer Directed Health Plans (CDHPs) and wellness programs in order improve health and lower costs.

“The survey results validated our suspicions,” said Dan Gowen, senior vice president, for Wells Fargo Insurance Services. “As inflationary adjustments from insurance companies remain in the 10-11 percent range and companies continue to struggle in today’s economy, many employees are being asked to share a greater percentage of overall healthcare costs.”

The survey found that the majority of employers made few changes to the basic components of their plan designs, with 84 percent remaining with their current medical carrier. Seventy one percent made no revisions to their prescription plan and 97 percent made no reductions to their dental plan. The most common strategy used was to ask employees to pay more via the medical plan design (46 percent) or to absorb a greater percentage of the costs, through payroll deductions (41 percent). The survey found 26 percent made no changes to their plan design, funding, insurance carrier, plan offerings or contribution percentage.

The survey — published by Wells Fargo Insurance Services — collected information on more than 320 employers of different sizes and from different industries nationwide. Surveys were conducted during five-weeks in December 2009 and January 2010 and gathered information on decisions employers made about benefit programs for 2010.

CDHPs continue to increase in adoption

The survey also showed that CDHPs continue to increase in adoption. Four percent of employers added a Health Savings Account (HSA) plan, while three percent added a Health Reimbursement Account (HRA) plan, bringing the total of employers offering a CDHP to 31 percent. Another eight percent indicated they plan to offer a CDHP in 2011.

Other findings showed that employers continued to implement wellness programs. Smoking cessation, weight management and biometric screening programs were the most common programs added in 2010. Connecting participation in a wellness program with financial incentives was also popular. Employers that added a wellness program for 2010, 59 percent offered an incentive to participate. Employers in the Southeast (84 percent) and Midwest (71 percent) offered the highest level of wellness incentives.

“It’s encouraging to see more employers offering financial incentives, in conjunction with the new wellness offerings this year,” said Gowen. “Providing the program is only the start. It’s important to not only get the employees enrolled, but to keep them engaged in the program. Incentives help drive the motivation necessary for success.”

Disease management programs also are offered widely with diabetes, coronary artery disease and asthma being the most common programs added for 2010. Employers also adopted financial incentives (43 percent) more widely than they did a year ago.

The survey addressed the addition of voluntary benefit plans. As employers look to trim their overall benefit budgets, voluntary benefit plans continue to gain in popularity. Of those employers that offered at least one new voluntary program, 50 percent offered two or more. The most common combinations among these products are accident, cancer, and critical illness benefits, with 27 percent of employers adding them.

Lastly, despite the topic of healthcare reform dominating as a yearlong discussion, most employers took a “wait and see” approach. Ninety two percent of employers took no action to better align themselves in the event legislation were to be passed in 2010.

About Wells Fargo Insurance Services

Wells Fargo Insurance Services USA, Inc. is the fourth-largest insurance brokerage and the largest bank-owned insurance brokerage in the United States, with more than 200 offices in 37 states. Its 8,200 insurance professionals place more than $15.5 billion of risk premiums with expertise in property, casualty, benefits, international, personal lines and life products. For more information about Wells Fargo Insurance Services, visit

Wells Fargo & Company is a diversified financial services company with $1.2 trillion in assets, providing banking, insurance, investments, mortgage and consumer finance through more than 10,000 stores and 12,000 ATMs and the internet ( across North America and internationally.

SOURCE: Wells Fargo Insurance Services USA, Inc.

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