Rising healthcare cost? Consumer Driven Health Plans so crazy, they might even work
Rising healthcare costs are scaring the bankruptcy out of employers. Traditional insurance plans are excellent choices for many employers, while others are facing the point of extinction if cost continues to rise. There are options available that should be in benefit packages, which can help employers and their employees. Consumer driven health plans (CDHP) are becoming increasingly popular with many employers, and their employees.
A few years ago, we had a client that we were helping work through their renewal. The rates had increased significantly, with little wiggle room (sound familiar?). We had looked at several companies, but they were in the best market at the time. After much discussion, the company decided to offer a $2,000 deductible plan as an alternative (much higher than the $500 Ded. they had offered for the prior 10 years). We thought this would never work, nor would it attract many employees. Needless to say, we were way wrong! Much had to do with the contribution structure, along with the employee demographic. It just blew our minds, considering the norm for the geographic area was a much richer plan (No ded, 90%-10% coinsurance) at the time.
In today’s market, account savings tools (HSA, HRA, Medical FSA, etc.) are brought up in most benefit discussions. I had a conversation yesterday concerning putting an HSA option in. I was going through the pros and cons and who was the better fit for the plan, and the employer was actually following me!
Many people are concerned with reducing benefits, which can typically be associated with HSA and HRA compatible products. Yes, that is a major concern because some quality of care could be reduced because employees are more exposed to the overall cost. Employees find it harder to access care when their visit to a PCP would cost them $100-$200, for example. They are concerned with exposing themselves to major medical bills.
When budgeting, employers seem to like the cost associated with consumer driven health plans (HSA, HRA, Med. FSA). These plans are much more cost efficient than the traditional plans that we are so used to. Employers are faced with difficult decisions when discussing the loss of benefits in comparison to the cost. Employers want to provide the best benefits they possibly can for their employees, as these people are the biggest asset a company has.
If an employer, and its employees, could step back and look at the bigger picture while properly informing the employees, these tools could help create a better culture within the work place. Of course, the employees must be highly involved. With the proper education of these plans and savings tools, the overall health of a group of employees could rise. The consumerism associated with these tools helps them be more aware. Their lifestyle begins to change, as they are more concerned about what is going into their bodies and how they are behaving.
Once the initial shock of these plans has passed and the education begins, the employees start to become a healthier, more aware group. Stepping back and viewing the overall picture, one can see where these decisions can help increase productivity, presenteeism, and help to increase the morale of a company.
These high deductible plans are not as negative as many people believe, and in fact, they can be very beneficial. When considering consumer driven health plans, there are many factors to consider. It is smart to lay out long term goals of the company: Where are you currently; where do you want to be in the future; and what solutions are going to help you get there?
It is important to discuss these topics with a professional, and ask for help. Navigating health care is more difficult than it has ever been in the past, and will only continue to become more difficult.
When thinking about major benefit decisions, think of Employee Benefit Consultants, Inc. of Richlands, VA. Taylor would be happy to help, as he is a certified professional through the National Association of Health Underwriters with CDHP’s.