Looking forward to 2019 with consumer driven healthcare

There’s no question that selling health insurance is competitive. As the old adage goes, it’s cheaper to keep your current clients than find new ones. Paying attention to benefit trends that are catching employers’ attention is a key tactic to retain your clients year after year.

Rising healthcare costs and the importance of strong benefit packages in recruiting are driving employers to consumer driven healthcare (CDH) plans including health savings accounts, flexible spending accounts and health reimbursement accounts. Despite high premiums, CDH plans allow employers to diversify their benefits offering without breaking the bank. In the last decade, the usage of HSAs have increased by nearly 400%, according to a report from consulting firm Advisory Board.

CDH plans help offset the high cost of medical care and allow for a portion of healthcare services to be paid with pre-tax dollars. Often, these plans have the option to be employer-sponsored and are administered by third-party administrators.

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Medical examination tools hang on a wall in an exam room at Perry Memorial Hospital in Princeton, Illinois, U.S., on Wednesday, Oct. 11, 2017. Senate in both political parties say they've reached agreement on fixes to stabilize Obamacare just two weeks before Americans start signing up for 2018 coverage. Photographer: Daniel Acker/Bloomberg

Brokers have stated that their groups desire CDH plans because they reduce costs. This is because employer contributions to HSAs, HRAs and FSAs are 100% tax deductible and can be combined with lower insurance premiums. Additionally, CDH plans offer flexibility since they are customizable. Employers can contribute different amounts based on their budget and employees can invest in the accounts too.

CDH plans also give employees the ability to better plan for out-of-pocket medical expenses. There’s less concern about paying for unexpected medical expenses because they have access to an account specifically for healthcare costs, available for use when they need it. Additionally, unused dollars from HSAs, FSAs and HRAs rollover year to year and can be used for future healthcare costs, including during retirement.

Implementing CDH plans. Offering CDH plans is only half the battle. To truly help your groups experience the benefits of CDH plans, it’s important to help them drive employee participation. If you’re looking to offer CDH plans in 2019, here are some best practices to consider:

Develop a good plan design. Employees should not feel like their employer is unfairly shifting the cost of healthcare to them. If possible, help your groups understand that funding CDH benefit accounts for their employees is critical to driving account adoption. A recent survey found that consumer driven health benefits account adoption increases with direct-dollar contributions from employers, to nearly 40% with a contribution of $800, up from just more than 20% with no employer contribution.

Help your groups communicate the value of a CDH plan. In order to drive utilization, the benefits of using a CDH plan should be clear to the employee. Advise your groups to present the CDH plan they are offering as a single, complementary solution that’s designed to offset the increased cost responsibility of their health benefits.

Empower your groups to drive benefits adoption. In addition to taking a more active role in overall plan design, you can ensure that employers are educated on the value of CDH plans and be prepared to drive enrollment. Working with employers to help them better articulate plan and account value propositions, as well as differences in plan design, can have a huge impact on enrollment.

Looking forward. The role of the health insurance broker is evolving. It’s no longer enough to offer your groups the same set of plans year after year. Instead, groups are looking for benefits that help them reduce cost and satisfy their employees. Insurance premium increases show no sign of stopping, and therefore, CDH plans will continue to play a role for years to come.

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