Regardless of the options employers choose to offer, consumer-driven healthcare is on the rise and high deductible health plans aren’t going away anytime soon. As they continue to become more and more prevalent, it’s important for HR to step up their communication efforts. Employees will be (understandably) concerned and confused by the differences in HDHPs, but it’s nothing education, patience and a bit of behavioral economics knowledge can’t solve to ward off buyer's remorse. Here are some ways to help employees embrace high deductible health plans.
As with any other change in your company, you must be very explicit and intentional in your communication. Remember that people like to have explanations for what is happening (and why), rather than have changes dictated to them without any kind of supporting information. Just remember Benjamin Franklin's oft-cited adage "Tell me and I forget, teach me and I may remember, involve me and I learn."
When introducing a HDHP, it's critical to hold an active (vs. passive) enrollment. It's also smart to hold an open enrollment meeting so your employees can ask you questions - just make sure they’re prepared for it by sending out the benefits information a few days prior to presentation. In this way, they'll have time to review the information and come prepared with any questions they might have. Be as candid as possible so they feel as though you’re understanding their concerns - and do your best to be as patient as you can to assuage their fears. This course of action will go a long way toward a smooth transition.
If your employees have never been enrolled in a high deductible health plan before, they’ll have plenty of questions about how they work. Why aren’t there copays? How much does an office visit cost at the doctor? What if one of the members on the plan is seriously injured? For what type of person are HDHPs most appropriate? Although HDHPs are growing in popularity among employers, employees tend to know very little about them and therefore, shy away from them.
One of the biggest hurdles for people to overcome with high deductible health plans is purely psychological. The plan works differently than anything they might be accustomed to. For some, it’s difficult to get over the idea of needing to pay for prescriptions and doctor visits out of pocket until they’ve reached the deductible — and many are not into the idea of having lower premiums if it means they have a substantial deductible waiting for them (despite, in all likelihood, buying automobile insurance in much the same manner for years and years).
Some people may be concerned because they’re not particularly adept at saving the money they would have spent on premiums. In theory, this amount should go into a health savings account (HSA) to be used toward the deductible. While this strategy may work for some, others may have health issues that mean any money they could have saved is going toward expensive prescriptions or doctor visits.
Again, it will be to everyone’s benefit to hold meetings to educate employees on how high deductible health plans work, how they differ from traditional plans, how HSAs can be used with them, and how they can make excellent financial sense for certain people. This will help ease tension and allow employees to understand this new way of using a health plan.
Even if an employee gets on board during meetings with HR, that doesn’t mean their spouse will understand. In order to prevent information from getting "lost in transit" between the workplace and home, provide your employees with written literature to review later with their spouses. Also consider sending some literature directly into the home. Self-mailing postcards are a great way to get a message into the home, since the content is in plain view for everyone to see. Some employee benefits brokers will also make available video tutorials that help explain how high deductible health plans and health savings accounts work. The spouse will be a crucial part of getting employees fully on board, so don’t limit your communication to just your employees and only within the workplace.
HSAs are without a doubt, the best part of high deductible health plans. HSAs allow employees and their families to set aside tax-advantaged dollars each month that they can use for qualifying health expenditures, such as prescriptions, office visits, and their deductibles. For 2017, enrollees can contribute up to $3,400 ($6,750 for families) with tax-advantaged status. It’s certainly possible to contribute more, but it will taxed.
HSAs are real savings accounts that never expire, which means employees can keep these accounts for the rest of their lives. They can always withdraw funds, but tax-advantaged contributions are only possible while currently enrolled in a HDHP. Because the accounts can stay active forever, employees could even save these funds for retirement, when medical expenses are likely to be higher and they’re living on a fixed income.
Many people are thrown by the "HDHP" abbreviation of the high deductible health plan. They see “HDHP 4500” as a plan name and think “HMO” (health maintenance organization), which they associate with narrow networks and limited access to specialists. What's more, they might see this "HDHP 4500" plan next to another called the "PPO 2500", which might suggest to the employee that the HDHP plan must not be a PPO (which stands for "Preferred Provider Organization"), because the network designation isn't in the plan name. The result? Depressed adoption of the HDHP plan in favor of the PPO, all because of a poor naming convention. (PPO plans generally come with wide networks, excellent hospital groups, and do not require you to get a referral from a PCP (primary care physician) prior to seeing a specialist.)
Since HDHPs can also be HMOs, POSs, EPOs, or PPOs, we'd suggest plan names which more clearly communicate the network, the deductible (though this is debatable), and any other special features, most especially the presence of an HSA. In the case of the "HDHP 4500", why not rename it "PPO HDHP 4500 with HSA". That way it has a fighting chance of getting adopted when stacked up against something called a "PPO 2500".
If you’re concerned or feeling anxious about introducing a high deductible health plan to your workforce, or if you're unhappy with the adoption of an HDHP you already offer, don't be afraid to ask your employee benefits broker for help. Your broker should have plenty of marketing communication resources to assist you. At the very least, they can make themselves available at your open enrollment meetings to field questions and address concerns. This is a very common practice and you certainly wouldn’t be the first to request it.
How are your employees adapting to high deductible health plans? Leave us a comment below or contact us. We’d love to hear from you!
About the JP Griffin Group
The JP Griffin Group consults for discerning companies coast-to-coast, ranging in size from 10 to more than 30,000 employees. In addition to our Scottsdale, Arizona headquarters, we have bi coastal offices in Seattle, WA and Washington, DC.