The process of initially getting employers to understand the value of qualified high deductible health plans (plans that do not have a copay) and their accompanying health savings accounts takes some work to be done correctly.
More than 12 years of experience moving employers to these plans has taught me and my fellow advisers at my firm a great deal. The opening recommendation I make to employers is that they need to understand and embrace these plans for themselves before they begin to try to explain them to their employees.
Many employers will say, “We like offering the traditional copays and don’t think our workforce is suited for a plan that doesn’t offer copays.”
My next comment is, “Can I show you a way that you can create the same robust benefit plan by spending the same dollars you would on the traditional PPO plan through employer funding into the health savings account? And if employees don’t use the dollars, they are the employee’s to keep in the account for future health expenses — even in retirement.”
While they will often be skeptical, the employer will usually agree to the conversation.
Breaking it down
For my fellow advisers looking to help employers embrace and even become excited about such plan designs, I have eight recommendations:
1) Provide an easy to read, colorful engaging education summary about how these plans work that uses pictures and arrows and graphics to explain the basic concepts to the C suite involved in the decision making. The employer will be astounded by all the favorable elements of these types of plans. Don’t forget to remind your LLC and S Corp owners and partners that they can fund these accounts as well — and deduct them off of their taxes.
2) Let the employer know that if they are moving from a traditional PPO with copays they should be initially committed to spend at least the same dollars for health benefits per employee that they did the prior year. The difference is that employees will now be paying lower premiums and employers will be applying the saved premiums to fund the employee’s health savings accounts.
I often encourage the employer to offer a dollar-for-dollar match to what the employee puts into the account, since these plans only work if the account is funded. I ask for the employer’s permission to encourage the employees to fund the accounts with 100% of their premium savings, which is where the employer match incentive helps.
Also see: “11 benefits workers want.”
A funded account up to the maximum out of pocket exposure is the goal for the employees to begin really liking the program. Sometimes an extra funding bump/incentive by the employer in the beginning can make all the difference in how the plan is perceived and embraced.
3) Sell the heck out of the benefits of the health savings account. The benefits are too numerous to list here, but know these plans inside and out and sell the tax advantages and the benefit of entering retirement with some money allocated to future healthcare expenses.
4) Conduct group education meetings using a PowerPoint or video presentation as well as catchy enrollment materials and one-on-one counseling for the initial enrollment. Preferably the enrollment would be done with an online tool; however, the employee will still need some explanation and hand holding or they will be very skeptical.
5) Include a dual option during enrollment in addition to the HDHP and HSA, a “buy up” to a higher cost PPO with no HSA funding. This is a great way to reinforce to employees the premium advantages of the lower cost HSA plan. Many will sign up for the lower cost plan, especially if they will be receiving employer funds to their HSA.
6) Be prepared to provide extra education if the employer won’t contribute to the HSA. If the employer sees these types of plans as a way to reduce cost but is unwilling to consider any funding into the HSA the only way the employees will embrace the concept is if their premium contributions are much less than in the past. Employees need to understand this and be shown the need to fund the HSAs with their premium savings.
Much more communication and hand holding is needed if the employer is not going to fund the HSA. However, if the monthly premium savings to the employee is significant, you can still have a successful enrollment with individual counseling. The employee needs to understand they need to elect automatic contributions to systematically fund their HSA (with the premium savings they are receiving) or they are entering a danger zone.
7) Provide telehealth services with a very low copay and sell the heck out of this as well. Pair the telehealth benefit with one of the newer technology advocacy and concierge assistance services for members to be able to call and find the lowest price, highest quality providers and facilities and save on Rx prior to entering the healthcare system.
Educate employees and family members on the value of this service, which allows them to spend their HSA money more wisely. Reinforce to them they will not be on their own in their quest for defined cost and quality information if they use the advocacy or concierge assistance. Most of these advocacy and concierge services include telemedicine in the package. They can create immense savings not only for the employee but for the plan as well, since the claim dollars paid out will be reduced.
8) Note that all of the proposed Affordable Care Act replacement plan options at the federal level include an expansion of HSAs, so the demand for these plans will continue to grow as the benefits are enhanced.
All the healthcare replacement plan options proposed at the federal level so far exclude the funds in the HSA from any employer cap on deductibility of premiums — unlike the current Cadillac tax, which includes the HSA value.
Now is the time for every employee in America who receives a plan from their employer to be presented with an option to have an HSA. I see the responsibility to drive this education and promotion as that of the employee benefit adviser.
It is our responsibility to educate, communicate and be advocates for these types of consumer-driven plans. Not until we eliminate copays that detach employees from the real costs of receiving healthcare will we ever have any chance of combatting the continually increasing costs of healthcare, which now equate to 24% of the average American worker’s paycheck (including employer and employee contributions).
Enough is enough. The solutions exist and continue to improve. We must be the advocates of education and change.
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