Hoping To Combat Rising Health Care Costs, Twice As Many Employers Offer HSA or HRA Options This Year

2006 Spencer Survey of Consumer-Driven Health Plans

(RIVERWOODS, ILL., November 14, 2006) – As employees evaluate their health care options during this year’s benefits enrollment period, twice as many are being presented with health savings account (HSA) or health reimbursement arrangement (HRA) options compared to 2005, according to findings from the 2006 Spencer Survey of Consumer-Driven Health Plans. The survey was conducted by Spencer’s Benefits Reports, a leading research service produced by Wolters Kluwer Law & Business for health benefits plan administrators at organizations across the U.S. The survey further found that the average annual per employee cost for health care was more than $6,700, and, not surprisingly, the single most important reason employers are moving to consumer-driven health plans (CDHPs) is to reduce their costs.

“Clearly, reining in escalating company costs for health care is the leading motivator for employers in offering consumer-driven plans,” said Stephen A. Huth, managing editor for Spencer’s Benefits Reports. “But the survey also shows companies are thinking about the near-term and long-term health needs of employees.”

Increased Employer Adoption, But Employee Participation Lags

Specifically, the survey found that the number of employers offering an HSA has increased from 12 percent in 2005 to 28 percent this year and the number offering an HRA has increased from 9 percent to 18 percent in 2006. More companies now also offer flexible spending accounts (FSAs), with 64 percent of employers now offering this option, up from 57 percent last year.

However, while more firms now offer CDHPs, their popularity among employees remains low. The survey found that the average participation rate in HSAs by employees in companies offering these plans is only 3 percent.

“None of the companies offering an HSA were doing so as a total replacement and most offered at least one lower-deductible PPO or HMO plan as well,” said Huth.

In companies offering HRAs, the average participation rate is 5 percent, and 21 percent of employees participate in FSAs, according to the survey.

Despite slow employee adoption, more employers still plan to offer additional CDHP options over the next 12 months, with 55 percent reporting they will offer FSAs, 41 percent HSAs and 23 percent HRAs.

Rising Health Care Cost Drives Employer Decision

While the survey found that the annual per employee cost for health care varied significantly by company, the average overall annual cost was $6,709. The top three reasons cited most often for moving to a CDHP were reducing employer costs, identified by 41 percent of respondents; providing a savings vehicle for employees, given by 19 percent of respondents; and offering more choices to employees, chosen by 16 percent of employers.

“Company costs for health care is a leading concern for employers, but they also appear to be concerned about offering employees choices, both in terms of offering more options for their current health care as well as new ways to save for future health costs,” said Huth.

About the Survey and Spencer’s Benefits Reports

The 2006 survey of HR and benefits professionals, conducted via the Internet and email, represents the responses of 121 organizations with more than 440,000 employees across the U.S. Spencer’s Benefits Reports has been conducting the survey annually since 2004. Spencer’s Benefits Reports is available as an annual online subscription. To order, call 1-800-449-9525.

About Wolters Kluwer Law & Business

Wolters Kluwer Law & Business is a leading provider of research products and software solutions in key specialty areas for legal and business professionals, as well as casebooks and study aids for law students. Its major product lines include Aspen Publishers, CCH, Kluwer Law International and Loislaw. Its markets include law firms, law schools, corporate counsel and professionals requiring legal and compliance information. Wolters Kluwer Law & Business, a unit of Wolters Kluwer, is based in New York City and Riverwoods, Ill.

Wolters Kluwer is a leading global information services and publishing company. The company provides products and services for professionals in the health, tax, accounting, corporate, financial services, legal and regulatory, and education sectors. Wolters Kluwer has annual revenues (2005) of €3.4 billion, employs approximately 18,400 people worldwide and maintains operations across Europe, North America, and Asia Pacific. Wolters Kluwer is headquartered in Amsterdam, the Netherlands. Its shares are quoted on the Euronext Amsterdam (WKL) and are included in the AEX and Euronext 100 indices. For more information, visit www.wolterskluwer.com.

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