What is a Consumer Driven Health Plan (CDHP)

A Consumer Driven Health Plan (CDHP) is a PPO health insurance plan with a higher deductible but  lower premium than traditional plans. There are a few key differences between a traditional PPO and CDHP, which are noted below.

The CDHPs is paired with Health Savings Accounts (HSAs). HSAs allow users to contribute tax-free contributions into a savings account to be used for health-related expenses. An HSA is used to reimburse qualified medical expenses. The University contributes $600 individual/$1,200 family each year to the HSA of CDHP participants, regardless of whether or not you choose to contribute.

You should consider several factors when determining whether or not a CDHP is appropriate for you, including:

  • How much is the deductible compared to traditional plans?
  • What is the Out-of-Pocket maximum comparison to traditional plans?
  • How much are the premiums compared to a traditional health plan?
  • How often do you and your dependents have to require medical procedures or office visits?
  • How much Out-of-Pocket expense will be incurred under the CDHP compared to the other plan options?

Once you determine these factors, you will be able to decide what plan best suits your needs.

In-Network vs. Out-of-Network Providers:

The CDHP summary outlines In-Network vs. Out-of-Network benefit coverage. This means that you can see a provider who is not on the preferred (or network) list, but you will pay more for these visits since the provider is not part of the pre-negotiated discount. For example, the plan pays 90% of the cost of a visit to a preferred provider (after you meet your deductible), but only pay 70% if your provider is out-of-network. These percentages are outlined in your summary of benefits.

In addition to the difference in plan coverage for network vs. non-network providers, the non-network providers are also able to bill you directly for the amount above what the plan allows for a covered services. These charges are completely outside of the plan, and do not reduce your deductible or out of pocket maximum.

What’s covered?

This information is found in the plan document posted in the main medical section. Not all medical procedures are covered (for example, surgeries that are considered elective or for cosmetic reasons are typically not covered), so it is important for you to review this plan information particularly if you have known medical issues.

Components of a typical CDHP:

  • In-Network Providers or Preferred Providers – When making your decision to enroll in the CDHP, you should review the list of In-Network Providers for the plan. It is a good idea to confirm that your current doctor is in the network if you intend to continue using him/her. If not, you can then make your decision based on the additional cost of using an out-of-network provider.
  • Deductible - This is the amount you are required to pay upfront for all medical expenses before the plan begins to pay. The plan has a separate, higher family deductible, which must be met before the plan begins to pay for covered services received by other family members. Once the family deductible is met, regardless of what combination of family members incurred the charges, no one in the family is subject to meeting any deductible for the remainder of the year. Unlike the traditional PPO, however, there are no individual caps on the deductible. One person in a family could reach the full family deductible.
  • Office Copays - The CDHP plan includes copayments for non-diagnostic services, such as office visits. Unlike a traditional PPO, however, there are no copays until the deductible is met. All charges are applied to the deductible. This information is detailed in the summary plan description. Office copayments do not count toward your deductible.
  • Coinsurance Percentage - Once you meet the deductible for a plan year, your plan will begin to pay for covered services based on the coinsurance percentage outlined in the plan. For example, the plan has an 10% coinsurance. If you incur $100 of medical costs and have already met your deductible, your plan will pay $90 (or 90% of $100) and you will be responsible for the remaining $10. Opening and reading the Explanation of Benefits (EOB) report you receive in the mail from your insurance carrier is important, as these will show you the breakdown of the coinsurance amount and what you may still owe your medical provider.
  • Preventive Coverage - The plan covers ACA preventative care services at 100%. This is an important element of your plan – one that can save you money and help you prevent major illnesses. You should familiarize yourself with this portion of your plan and take full advantage of these preventive services. These tests may help your physician detect illnesses early and in some cases can help save your life.
  • Out-of-Pocket-Max - This is the maximum amount of money you will pay for covered services. Your deductible and other copays are included in this figure. This is an important stop-gap feature in the plan to limit your maximum exposure for medical costs during the plan year. If you reach the out-of-pocket max, your plan will pay 100% of the costs of covered services for the remainder of the plan year. 

The following table illustrates a sample out-of-pocket maximum.
 

DescriptionCosts
Medical costs$21,000
Less Deductible (paid by you)($1,750)
Costs after deductible$19,250
Plan Pays (90% co-insurance)($17,325)
Remaining costs   $1,925
Amount you pay $750 (capped at Out-of-Pocket Max of $2,500, which is the deductible and remaining coinsurance)
  • Employee Cost Share - This is the regular fee or premium you pay to participate in the health plan. This is only a portion of the cost of the plan. The University pays the remaining portion as a benefit to employees.