Why High Deductible Health Plans Are Trending at Colleges and Universities

For the past five years, Sibson Consulting has released its annual College and University Benefits Study (CUBS), which analyzes benefit programs data from hundreds of higher education institutions to determine what colleges and universities are doing to attract and retain top talent.

Its most recent report examined the plans of more than 450 public and private colleges and found that the percentage of institutions that offer high deductible health plans (HDHPs) to their faculty and staff has grown explosively over two years, as has the percent that HDHPs represent of all plans offered by colleges.

In 2017, nearly 72 percent of higher-ed healthcare plans offered HDHPs as opposed to 59 percent of plans that offered them in 2015. In the meantime, the percentage of preferred provider organization (PPO) and point-of-service (POS) plans with deductibles less than $1,000 have declined (from 46 percent in 2015 to 39 percent in 2017), while HMO plans saw only a nominal increase.

Colleges are also far more likely to offer their employees health savings accounts (HSAs) than they are to offer health reimbursement arrangements (HRAs), or HDHPs without either account. Sixty-two percent of HDHPs offered have HSAs, while 15 percent have HRAs.

CUBS reports that higher education medical plans have historically been more valuable to employees than what they might be offered by a corporate employer, but that this has become less true in recent years as health insurance costs have risen. HDHPs have been a way for universities to proactively address rising healthcare costs.

This embrace of HDHPs and HSAs reflects a national trend across industries. According to data from the National Health Interview Survey, from 2007 through 2017, enrollment in HDHPs with an HSA (4.2 percent to 18.9 percent) and without an HSA (10.6 percent to 24.5 percent) increased among adults aged 18–64 with employment-based coverage, while enrollment in traditional plans decreased. That study also found that enrollment in HDHPs with an HSA is more prevalent among those with higher levels of family income and educational attainment.

Other key benefits trends that were explored in the CUBS report include access to an on-site fitness centers—which was the most common wellness initiative, offered by 87 percent of colleges. On-site biometric screenings and obesity-control and weight-loss programs have also become commonplace, and were offered to employees by nearly two thirds of colleges in 2017. And prescription drug cost-management programs have expanded dramatically, across mandatory mail-order drug programs, mandatory generics programs and step therapy.

Learn more about the value of HDHPs and HSAs.