Employers looking for ways to decrease their group health insurance outlays over the past decade have been turning to high-deductible health plans as they offer lower up-front premiums.
In 2021, 51% of the U.S. workforce was enrolled in one of these plans, according to a recent survey by ValuePenguine.com.
But successfully coaxing your employees to choose an HDHP is not always easy. It means getting the deductible amounts right and educating them on how to best use these plans.
Also, while the plans are not for everyone, they can be a good fit for those who do not use their health plans much, are young and in good health. These employees may instead be overpaying for their premiums if they are not in an HDHP with an attached health savings account (HSA).
The key to encouraging your staff to adopt these plans is to first understand why some are reticent about them, how you can overcome their objections and how you can better tailor the plans for them. The following are the main reasons HDHP adoption may be lagging among covered workers.
Lack of education
One of the biggest hurdles to overcome is that many people are shocked to see the amount of the deductible, even as they save money on their premium. And on top of that sky-high deductible, they still have copays.
If you want employees that would be better suited for an HDHP to actually sign up for a plan, you need to take the extra time to:
- Explain how HDHPs work and that there is a trade-off for high deductibles in exchange for lower up-front premiums.
- Provide custom, side-by-side medical plan comparison tables and different medical usage scenarios to illustrate which types of individuals are best suited for an HDHP and which ones are not. (This would include scenarios of individuals who may be high health care users who may not be well suited for an HDHP.)
- Explain how they can funnel what they save in premiums into an HSA so they can save their money for future medical expenses (more on HSAs later).
After covering all of the above, you should encourage your staff to pencil out the math to figure out which plan is right for themselves and their families. They can do this with the usage scenarios you provide. They may need assistance in doing this and you can encourage them to ask questions so they can make the best decision.
Too-high deductibles
For 2022, the maximum out-of-pocket deductible for an HSA-linked single HDHP is $7,050 and for a family plan the total deductible is $14,100. The minimum deductible for these plans is $1,400 for a single plan and $2,800 for a family plan.
While employees expect an HDHP to have a higher-deductible than a traditional plan, they can be shocked by a multi-thousand-dollar deductible. And many employers offer plans that are at the maximum end of the deductible spectrum.
You can work with us to model out multiple plan design scenarios that will help you save money on your group benefits bill while maximizing plan adoption. These models do a good job of explaining possible annual outlays and savings at different premium and deductible levels.
You’re not contributing to their HSAs
Employers will often fund HSAs with a matching contribution up to a certain dollar amount, but that’s not required under law. As a result, many employers do not contribute to these accounts. But HSAs are critical to the success of HDHPs.
It’s often hard to impart the importance of an HSA and how it can benefit a worker years in the future. To generate interest, it’s a good idea for the employer to offer to contribute to the account if the employee sets up an account. Once an employer starts contributing, the likelihood of the employee starting to do so increases exponentially.
When selling them on the benefits, explain that an HSA never expires. Your employees can keep them for life and let the funds grow in value through investments, and then put them to use when they are older or if they have health problems years later.
Additionally, they are funded with pre-tax earnings, and withdrawals are not taxed either.
Tell them this is essentially free money and that at some point this year or far in the future, they may need the money in the account to pay for medical services.
The takeaway
Helping your workforce understand how HDHPs (coupled with an HSA) can benefit them is the best way to encourage them to enroll.
You may not convince everyone that an HDHP is right for them, but if you get through to some of the ones who can benefit from an HDHP, they may share their experience with colleagues later.