Research Article
Private Health InsuranceHigh-Deductible Health Plan Enrollment Increased From 2006 To 2016, Employer-Funded Accounts Grew In Largest Firms
- G. Edward Miller ([email protected]) is deputy director of the Division of Research and Modeling, Center for Financing, Access, and Cost Trends, Agency for Healthcare Research and Quality (AHRQ), in Rockville, Maryland.
- Jessica P. Vistnes is a senior economist in the Division of Research and Modeling, Center for Financing, Access, and Cost Trends, AHRQ.
- Frederick Rohde is a survey statistician in the Division of Statistical Research and Methods, Center for Financing, Access, and Cost Trends, AHRQ.
- Patricia S. Keenan is a senior researcher in the Division of Research and Modeling, Center for Financing, Access, and Cost Trends, AHRQ.
Abstract
Over the past decade, employers have increasingly turned to high-deductible health plans (HDHPs) to limit health insurance premium growth. We used data from private-sector establishments for 2006 and 2016 from the Medical Expenditure Panel Survey–Insurance Component to examine trends in HDHP enrollment and heterogeneity in HDHPs by firm size. We studied insurance plan offerings along the following dimensions: whether employers fund accounts to help defray employees’ out-of-pocket health care spending, the availability of non-HDHP plan choices, and single and family deductible levels. We extend the literature by examining these characteristics by detailed firm-size categories and by including all plans with deductibles that met or exceeded Internal Revenue Service thresholds to be qualified for health savings accounts. We found that in 2016, 78.0 percent of HDHP enrollees in the smallest firms (those with fewer than 25 employees) lacked an employer-funded account, compared to 35.2 percent in the largest firms (those with 1,000 or more employees). Overall, HDHP enrollees in the largest firms had significant advantages relative to workers in smaller firms along all of the dimensions examined.
Over the past decade, employers have increasingly turned to high-deductible health plans (HDHPs) to limit growth in health insurance premiums.1,2 Given the long-standing differences by firm size in the offering of health insurance,3 it is important to examine differences in HDHP benefits between small and large firms to understand how growth in HDHPs may have transformed the employer-sponsored health insurance landscape.
Historically, factors such as higher health insurance administrative costs and more limited ability to pool health risks in small firms have contributed to firm-size differences in offer rates, availability of a choice of plans, and deductible levels. The same factors may also have led small firms to offer less generous HDHP benefits than those offered by large firms.
Previous analyses of HDHPs using employer-level data have had insufficient sample size to estimate benefits at the smallest firms or have focused solely on large firms.1,2,4 This study extends the HDHP literature by using data for 2006 and 2016 from the Medical Expenditure Panel Survey–Insurance Component (MEPS-IC), which has sufficient sample size to examine benefits by detailed firm-size categories. In addition, previous studies have focused on HDHPs eligible for or paired with a health savings account (HSA) option and, as a result, may have excluded the least generous HDHPs from their analyses. In this study we included all plans with deductibles at or exceeding the Internal Revenue Service (IRS) thresholds for HSA-qualified plans.5 We examined differences by firm size in whether employers funded accounts to help defray out-of-pocket health care spending or offered a choice of plans. We also examined differences in deductible amounts by both firm size and the presence of an employer-funded account. Together, these differences may create substantial heterogeneity in benefits among HDHP enrollees.
Study Data And Methods
Data
We used data for 2006 and 2016 from MEPS-IC, an annual survey conducted by the Census Bureau and sponsored by the Agency for Healthcare Research and Quality that contains information on approximately 30,000 private-sector establishments each year. MEPS-IC is a stratified sample with weights that produce nationally representative estimates for a range of measures of employer-sponsored insurance, including single and family deductibles and enrollment in single, employee-plus-one, and family coverage. In addition, because MEPS-IC collects information on up to four available plans for a given establishment, we were able to examine the choice of plans available to HDHP enrollees.
Methods
We defined an HDHP as a plan that met or exceeded the IRS deductible threshold for an HSA-qualified plan in each survey year. The thresholds for single and family coverage were $1,050 and $2,100, respectively, in 2006 and $1,300 and $2,600, respectively, in 2016. Because MEPS-IC does not collect information on employee-plus-one deductibles, we categorized these plans as HDHPs based on the family deductible, if available, and based on the single deductible if family coverage was not offered. Using statutory IRS deductible thresholds for HSAs, which have been adjusted using the Consumer Price Index for All Urban Consumers, we found rapid growth in the prevalence of HDHPs from 2006 to 2016, which indicates that deductible levels grew more rapidly than general inflation did. To provide context for our results, we also simulated the effects of an alternative index that used premium growth as a measure of growth in private health care spending. We found somewhat slower, but still substantial, growth in the prevalence of HDHPs, which is consistent with the fact that deductibles also grew more rapidly than premiums did. These estimates are presented in online appendix exhibit A1.6
We categorized HDHPs as having an employer-funded account if employers reported that they contributed to an HSA or provided a health reimbursement arrangement (HRA). HSAs are tax-preferred accounts available to people enrolled in HSA-qualified HDHPs to save for medical expenses not covered by the plan. While both employers and employees can contribute to HSAs, MEPS-IC collects information only on whether employers contribute. HRAs are employer-funded accounts with “contingent funding,” meaning that enrollees are reimbursed if they incur medical expenses not covered by the plan, up to the amount designated by the employer. While employers can offer HRAs regardless of the level of the plan deductible, our analysis focused only on HDHP enrollees, and we considered only HRAs that were provided for HDHP enrollees.7 In addition to examining the characteristics of enrollees’ benefits, we also examined whether enrollees had other plan options. When calculating the presence of alternative options, we used information on the availability of plans with the same coverage type—single or dependent—as held by the enrollee.
We used enrollee weights to produce nationally representative estimates for private-sector enrollees. All differences in the estimates mentioned in the text are significant ( or better) using two-tailed tests. Additional estimates on the distribution of HDHP enrollees by plan type, discussed in the text, are in appendix exhibit A2,6 which also contains a description of the variables. Appendix exhibit A36 presents estimates of the number of HDHP enrollees by firm size.
Limitations
Our study had several limitations. First, we lacked data on the amount that employers contributed to HSAs and the contingent funding they provided for HRAs.
Second, we could not provide additional information on HDHPs that are HSA qualified according to IRS requirements because MEPS-IC does not collect all necessary benefit information.
Third, we did not know the full choice set of plans available to enrollees because MEPS-IC, like other employer surveys, does not include information on choices available through employees’ family members.
Study Results
High-deductible health plans were relatively rare in 2006, covering only 11.4 percent of private-sector enrollees (exhibit 1). In 2016, however, 46.5 percent of private-sector enrollees were in such plans. In both years there were notable differences by firm size in the share of enrollees in HDHPs. In 2006 the plans were most prevalent among enrollees in the smallest firms (those with fewer than 25 employees), and their share decreased as firm size increased. In 2016 enrollees in the largest firms (those with at least 1,000 employees) remained the least likely to be enrolled in an HDHP (42.2 percent), but enrollees in firms with 25–99 employees were the most likely (56.4 percent).
Exhibit 1 Percent of private-sector enrollees in high-deductible health plans, by firm size and employer-funded account, 2006 and 2016

In 2016, 23.4 percent of all private-sector enrollees were covered by an HDHP that had an employer-funded account: 15.5 percent were enrolled in a plan with an employer contribution to an HSA, and 7.9 percent were enrolled in a plan with an HRA. The percentage of all enrollees in a plan with an employer-funded HSA in 2016 was lowest among the smallest firms and rose steadily with firm size. While the percentage of all enrollees in a plan with an HRA also was lowest for enrollees in the smallest firms, there were no significant differences in this percentage among the three larger firm size categories.
The share of HDHP enrollees who were offered only HDHPs (either one or multiple HDHPs, but no non-HDHP plan) declined steadily in each year as firm size increased (exhibit 2). In the two smallest firm-size categories (fewer than 25 employees and 25–99 employees), the percentage of HDHP enrollees who were offered only HDHPs showed no significant change between 2006 and 2016, although enrollees in these categories were increasingly offered a choice of multiple HDHPs. In the two largest firm-size categories, HDHP enrollees experienced differing patterns in their plan options. The share of enrollees offered one or multiple HDHPs without being offered a non-HDHP plan declined from 2006 to 2016 in firms with 100–999 employees but increased in the largest firms (those with 1,000 or more employees). In addition, while the percentage of HDHP enrollees in both of these firm size categories increasingly had a choice among multiple HDHPs, enrollees in the largest firms experienced a decrease in choice along two dimensions: Their likelihood of being offered only one HDHP increased from 8.7 percent in 2006 to 15.3 percent in 2016, and their likelihood of being offered a non-HDHP plan decreased from 78.4 percent to 53.9 percent.
Exhibit 2 Percent of high-deductible health plan (HDHP) enrollees, by choice of plan types and firm size, 2006 and 2016

Next, we examined the shares of HDHP enrollees in a plan with no employer-funded account by whether or not enrollees had a choice of an alternative plan type. In 2006 the share of HDHP enrollees without an employer-funded account ranged from a high of 75.6 percent in the smallest firms to a low of 55.7 percent in firms with 100–999 employees (exhibit 3). From 2006 to 2016 this share decreased for HDHP enrollees in the largest firms, from 63.0 percent to 35.2 percent, but increased for HDHP enrollees in firms with 25–99 employees, from 62.2 percent to 67.7 percent. Because most enrollees work for large firms, the decline in the overall estimates from 63.9 percent to 49.7 percent over this period reflects the large-firm trend. In 2016 the share of HDHP enrollees without an employer-funded account decreased consistently with firm size, from 78.0 percent for the smallest firms to 35.2 percent for the largest firms.
Exhibit 3 Percent of high-deductible health plan (HDHP) enrollees with no employer-funded account, by choice of plan types and firm size, 2006 and 2016

The most striking finding in exhibit 3, however, is that in both 2006 and 2016 about two-thirds of HDHP enrollees in the smallest firms were in a plan that did not have an employer-funded account and did not have a choice of an alternative plan type. In both years the percentage of enrollees in this situation declined consistently as firm size increased. In 2016 only 10.7 percent of HDHP enrollees in the largest firms lacked both an employer-funded account and a choice of plans.
Next, we examined deductible levels for HDHPs by the availability of an employer-funded account. In 2016 the overall mean deductible levels for HDHP enrollees ($2,480 for single and $4,721 for family coverage) (exhibit 4) were well above the IRS thresholds for HSA-qualified plans ($1,300 and $2,600, respectively), and there was substantial variation in deductible levels across firm-size categories. For HDHP enrollees with individual coverage, mean deductibles in the largest firms ($2,154) were substantially lower than those in the other firm-size categories, which ranged from $2,717 to $2,801. For enrollees with family coverage, mean deductibles in the largest firms ($4,280) were also lower than those in smaller firms, which ranged from $5,173 to $5,873. For HDHP enrollees with deductibles at the ninetieth percentile of the distribution within each firm-size category, family deductible levels ranged from $9,600 in the smallest firms to $6,000 in the largest firms.
Single deductible | Family deductible | |||||
Firm size, number of workers | Mean | Median | 90th percentile | Mean | Median | 90th percentile |
All HDHPsa | ||||||
Overall | $2,480 | $2,000 | $4,400 | $4,721 | $4,000 | $7,600 |
Fewer than 25 | 2,782** | 2,500** | 4,900** | 5,873** | 4,900** | 9,600** |
25–99 | 2,801** | 2,500** | 4,900** | 5,332** | 4,400** | 9,500** |
100–999 | 2,717** | 2,500** | 4,600** | 5,173** | 4,900** | 8,700** |
1,000 or more | 2,154 | 1,800 | 3,000 | 4,280 | 3,700 | 6,000 |
HDHPs with no employer-funded accountb | ||||||
Overall | 2,627** | 2,200 | 4,800** | 5,028** | 4,000 | 8,900** |
Fewer than 25 | 2,755 | 2,400 | 4,900 | 5,917 | 4,900 | 9,700 |
25–99 | 2,770 | 2,500 | 4,900 | 5,326 | 4,400 | 9,500 |
100–999 | 2,695 | 2,400 | 4,700 | 5,136 | 4,500 | 8,600 |
1,000 or more | 2,376** | 2,000** | 3,900** | 4,594** | 3,900* | 7,400** |
HDHPs with employer-funded account (HSA or HRA) | ||||||
Overall | 2,320 | 2,000 | 3,500 | 4,474 | 3,900 | 6,000 |
Fewer than 25 | 2,887 | 2,600 | 4,900 | 5,754 | 5,200 | 9,200 |
25–99 | 2,874 | 2,500 | 4,800 | 5,341 | 4,300 | 8,600 |
100–999 | 2,749 | 2,500 | 4,600 | 5,210 | 4,900 | 8,700 |
1,000 or more | 2,037 | 1,700 | 3,000 | 4,110 | 3,600 | 5,900 |
HDHPs with employer contribution to HSAc | ||||||
Overall | 2,279** | 2,000 | 3,500** | 4,389** | 3,900 | 6,000** |
Fewer than 25 | 2,815 | 2,800** | 4,900 | 5,842 | 5,100 | 9,600 |
25–99 | 2,858 | 2,600** | 4,700 | 5,176 | 4,800** | 8,000** |
100–999 | 2,603** | 2,500** | 3,600** | 4,977** | 4,900 | 7,000** |
1,000 or more | 2,062** | 1,700** | 3,000 | 4,101 | 3,700** | 5,900 |
HDHPs with HRA provided by employer | ||||||
Overall | 2,398 | 2,000 | 4,000 | 4,648 | 3,900 | 7,500 |
Fewer than 25 | 3,045 | 2,500 | 4,900 | 5,581 | 5,600 | 7,900 |
25–99 | 2,893 | 2,200 | 4,800 | 5,548 | 4,000 | 9,600 |
100–999 | 2,974 | 2,800 | 4,700 | 5,595 | 5,000 | 9,900 |
1,000 or more | 1,981 | 1,600 | 2,800 | 4,132 | 3,500 | 5,600 |
In the largest firms, HDHP enrollees without employer-funded accounts had higher mean deductible levels than their counterparts with such accounts ($2,376 versus $2,037 for individual deductibles and $4,594 versus $4,110 for family deductibles), and they also had higher deductibles at the ninetieth percentile of the distribution ($3,900 versus $3,000 for individual deductibles and $7,400 versus $5,900 for family deductibles). For enrollees in other firm-size categories, there were no significant differences in deductibles by the presence of employer contributions.
Although there were some differences in deductible levels for HDHPs with employer-funded HSAs compared to HDHPs with HRAs, there was no consistent pattern. For example, mean single deductibles for all enrollees in HDHPs with employer-funded HSAs were lower than those for all enrollees in HDHPs with HRAs ($2,279 versus $2,398), but they were higher among enrollees in the largest firms ($2,062 versus $1,981). It is also important to note that when the estimates included all plans with HRAs (HDHPs and non-HDHPs), mean deductibles were about 15–20 percent lower for plans with HRAs than for those with HSAs (data not shown).
In addition to having lower deductibles, enrollees in HDHPs with an employer-funded account tended to be in plans with fewer restrictions on their choice of providers, compared to enrollees without employer funding. For example, among enrollees in the smallest firms, those in plans with employer-funded accounts were more likely to be in a preferred provider organization (PPO) and less likely to be in a point-of-service plan than those without such accounts (appendix exhibit A2).6 Consistent with other studies,1 we also found that the percentage of enrollees in PPOs generally increased with firm size for all non-HDHP and HDHP enrollees, including those with and without employer-funded accounts. And we found that within each firm-size category, non-HDHP enrollees were less likely than HDHP enrollees to be in a PPO.
Discussion
Similar to previous studies,1,2 we found a rapid rise—in this case, from 2006 to 2016—in the proportion of private-sector enrollees in insurance plans with deductibles that met or exceeded IRS thresholds for HSA-qualified plans. Because the thresholds are indexed by the Consumer Price Index for All Urban Consumers, increasing enrollment in high-deductible health plans indicates that deductibles rose faster than general inflation and that household budgets were exposed to potentially higher out-of-pocket health care spending. Employer contributions to HSAs and HRAs can be used to defray some of these costs, but the share of HDHP enrollees with employer-funded accounts increased only among those in the largest firms (those with 1,000 or more employees) over this time period.
In 2016 HDHP enrollees in the largest firms had significant advantages relative to workers in smaller firms along the following dimensions: the availability of employer-funded accounts (HSAs and HRAs), the availability of alternative plan options, deductible levels, and the degree of choice of providers. The advantage in plan choice for HDHP enrollees in the largest firms in 2016 existed despite a decline in the availability of non-HDHP options for these enrollees since 2006.
We provide new insights into how benefits vary for enrollees working at firms ranging in size from fewer than 25 employees to 1,000 or more.
By analyzing HDHP enrollees’ benefits by detailed firm-size categories and including all health plans at or exceeding IRS deductible thresholds for HSA-qualified plans, we provide new insights into how benefits vary for enrollees working at firms ranging in size from fewer than 25 employees to 1,000 or more. Previous analyses have been unable to examine the smallest firms separately or have focused solely on large firms. 1,2,4 These studies have also focused only on HDHPs eligible for or paired with a savings option. As a result, prior analyses may have excluded the least generous HDHPs.
Other studies have identified lower health care utilization,8 even among plans with employer contributions to a savings account,9 and higher financial burdens for HDHP enrollees compared to enrollees in non-HDHP plans.10 Our results suggest that these effects may be larger for workers in small firms, who are more likely to have higher deductible levels and lack employer contributions to help pay for out-of-pocket expenses, compared to workers in larger firms.
ACKNOWLEDGMENTS
The research presented in this article was conducted by G. Edward Miller, Jessica Vistnes, and Frederick Rohde in a Federal Statistical Research Data Center. The views expressed in this article are those of the authors, and no official endorsement by the Agency for Healthcare Research and Quality or the Department of Health and Human Services is intended or should be inferred, nor do they necessarily indicate concurrence by the Census Bureau. The results presented in this article have been screened to ensure that no confidential information has been revealed.
NOTES
- 1 Henry J. Kaiser Family Foundation, Health Research and Educational Trust. Employer health benefits: 2017 annual survey [Internet]. San Francisco (CA): KFF; 2017 Sep 19 [cited
2018 Jun 12 ]. Available from: https://www.kff.org/health-costs/report/2017-employer-health-benefits-survey/ Google Scholar - 2 Mercer. Mercer survey: health benefit cost growth slows to 2.4% in 2016 as enrollment in high-deductible plans climbs [Internet]. New York (NY): Mercer; 2016 Oct 26 [cited
2018 Jun 12 ]. Available from: https://www.mercer.com/newsroom/national-survey-of-employer-sponsored-health-plans-2016.html Google Scholar - 3 Agency for Healthcare Research and Quality. MEPS Insurance Component chartbook 2016 [Internet]. Rockville (MD): AHRQ; 2017 Sep [cited
2018 Jun 12 ]. (AHRQ Publication No. 17-0034-EF). Available from: https://meps.ahrq.gov/mepsweb/data_files/publications/cb21/cb21.pdf Google Scholar - 4 Willis Towers Watson. 2016 21st annual Willis Towers Watson Best Practices in Health Care Employer Survey [Internet]. London: Willis Towers Watson; [cited
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- 6 To access the appendix, click on the Details tab of the article online.
- 7 When employers reported that they contributed to both an HSA and an HRA, we categorized the plan as having an HSA. Employers can contribute to both types of accounts, but people with an HSA are permitted to have only a limited-purpose HRA that covers specified services. Internal Revenue Service. Health savings accounts and other tax-favored health plans: for use in preparing 2017 returns [Internet]. Washington (DC): 2018 Mar 1 [cited
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