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June 05, 2006
Consumer-Directed Health Plans on the Rise

The number of enrollees and dependents covered by a consumer-directed health plan (CDHP) increased from 3 million in 2005 to between 5 and 6 million in 2006, according to a Government Accountability Office (GAO) report.

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The GAO looked at CDHPs that combine a high-deductible health plan with a health reimbursement arrangement (HRA) or a health savings account (HSA). HRAs and HSAs are tax-advantaged accounts individuals can use to pay healthcare expenses.

The GAO report found that two-thirds of employers offering HSAs contributed to their employees' accounts with an average contribution of $553 for single coverage in 2005 and $1,185 for family coverage.

One of the questions about HSA-eligible HDHPs is how many individuals actually open and contribute to the accounts. Industry officials estimated that about half of HSA-eligible plan enrollees failed to open and contribute to an HSA.

Most individuals enrolled in an HSA-eligible plan in 2004 and 2005 purchased the plan directly from a health insurance carrier rather than obtaining it through their employers, according to the GAO.

Meanwhile, the most common employer contributions to employees' HRA ranged from $500 to $750 for individual coverage and $1,500 to $2,000 for family coverage in 2004, according to the report.

The number of employers offering a high HDHP connected with an HRA or HSA increased from about 1 percent in 2004 to 4 percent in 2005, the GAO said.

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