Employee health plans have experienced tectonic shifts in recent years. Most notable, of course, is the steep rise in the number of employers offering high deductible health plans (HDHPs). Also known as Consumer-Driven Health Plans, HDHPs are meant to encourage a cost-conscious mindset among employees. But is that what they’re really doing?
The benefits enrollment process can be confusing, and employees often select the lowest cost plan with the highest deductible thinking they’re going to save money. A study put out by the Journal of the American Medical Association suggests otherwise. In fact, the report states that despite the rise in HDHP’s most Americans aren’t really saving at all.
This begs an old question: Do employees really understand their health plans? While there is a lot of talk about consumer empowerment, the reality is that most employees don’t do their homework when it comes to their healthcare options. Decisions are made with limited information, and employers are then left to deal with employees who are stunned by the “real costs” of their medical care.
This out-of-pocket (OOP) scenario commonly plays out like this:
Enticed by lower monthly premiums, a company of predominately non-exempt workers opts to move to an HDHP with a limited amount of data analysis and employee education. Weeks into the new year, the benefit department finds itself overwhelmed by confused, frustrated employees who are now paying out-of-pocket for all appointments and medications — and feeling the financial pressure.
But it doesn’t have to play out like this. Advisers can prevent this scenario by providing comprehensive education at each stage of the benefits enrollment process.
This should begin with the financial considerations behind choosing a health plan. For many years, health care benefits have been viewed primarily in terms of clinical coverage, and employees with HMO or PPO plans really didn’t have to think about deductibles. They simply showed up for appointments and paid a small copay. With today’s HDHPs, however, that previous $15 office visit may translate to several hundred dollars out-of-pocket, but employees are often unprepared for the increased financial risk that these plans entail.
To choose a health plan that’s well-suited to their financial as well as their medical needs, employees need a better understanding of how demographics and health profiles can impact out-of-pocket expenses. But where are they to get these insights?
By making use of the decision support tools embedded in their benefits administration platform, employers can help their employees anticipate the health-related costs they are likely to incur and to choose the coverage option best suited to their individual situations. These tools include embedded videos, health plan comparison and predictive applications that can help employees identify their costs and simplify their decision-making.
But to use such tools effectively also requires additional communications and education, and that can be a tall order for many resource-strapped benefit departments. Yet the outcomes, in terms of greater employee engagement and retention, can justify the additional up-front work that’s required to achieve them.
There is another, post-enrollment benefit to these decision support tools. Advisers can help clients use their admin platform’s analytics features to identify further cost savings opportunities. For example, a review of de-identified claims data might reveal that many employees use the local emergency room for issues that could be addressed by a lower-cost 24-hour walk-in clinic—or better yet, through preventive care.
When employees are at ease with their healthcare decisions, employers gain through greater workforce satisfaction and productivity. A clear, concise, intuitive decision-support platform can go a long way towards helping employees make the right benefit choices—and increasing the value of their employer’s health benefits investment.
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