3 Things to Avoid When Designing Your Health Plan
Quote, Select, Communicate, Enroll—a broad overview of the traditional process for delivering employer-sponsored health coverage. It worked in the past, but have shifting market conditions made this traditional purchasing model obsolete?
It certainly hasn’t gotten easier for employers or employees, who, according to a recent study by Aetna, claim that picking health insurance is a greater challenge than parenting. That wasn’t always the case—something has changed.
For today’s new market conditions, here are 3 things to avoid when designing your next health plan.
1. Don’t Wait Until the Last Minute
Waiting until the last minute may work when triggering an ambush, but that’s not the way you want your employees to feel when they see their health plan options for the first time.
Nonetheless, the typical employer won’t consider their next renewal until two to three months prior (roughly the time when carriers release their rates for upcoming quarters). At that point, all they can do is pick from a list of options presented by their broker and hope employees won’t make too much of a fuss. It’s no wonder employers feel stressed and out of control when it comes to health insurance.
This isn’t a strategy, and it’s actually hurting employee-employer relations.
Two to three months from renewal may seem like a lot of time, but factor in the time for enrollment, education on the new plan, and perhaps a benefit fair and you’re lucky to have a month to communicate the new options to employees. If there are significant changes, you run the risk of employees feeling ambushed.
2. Don’t Close Off Your Employees from the Process
Union employers are used employees sitting across from them at the bargaining table, but private owners generally still keep the door tightly shut when designing their health plans.
Having facilitated countless negotiations, both on behalf of employers and employees, we at Benetech believe that there is much the private employer can gain by bringing employees into the process.
Does that mean democratizing the plan design process? Certainly not. But it does mean having real discussions with employees about budget realities, and inviting them to take a more active role in plan design through feedback, Health Risk Assessments (HRAs), and surveys.
Much of this has to do with controlling the narrative. It's easy to assume employers are being greedy when employer contributions go down. They need to know that the grass isn't necessarily greener outside of your organization.
By lifting the veil off of the plan design process, employees can become partners, and better yet, advocates, for your health plan.
3. Don’t Assume Your Employees Know How to Shop Your Plan
Employees have a lot of faith in their employer’s ability to vet and design good health plans; in their own ability, that’s a different story.
Paul Fronstin, director of EBRI’s health research and education program commented in a recent article,
“Choice of health plans is important to workers, and they would like more choices. But most workers express confidence that their employers or unions have selected the best available health plan—and they are not as confident in their ability to choose the best available plan if their employers or unions did, in fact, stop offering coverage.”
Point being, employees need an education on buying health coverage. You could do the hard work of designing a plan that meets the health needs of a variety of groups in your population, but that doesn’t mean employees will ultimately choose the plan that best fits their needs.
Buying health insurance is not intuitive, and the products are growing more sophisticated. Educating your employees in how to shop your plan gives them ownership of their choices, reduces stress in picking plans, and increases satisfaction with your offering.
What Should You Do?
Whether you’re a new employer offering health benefits for the first time or a seasoned veteran in the process, it’s important to acknowledge that the traditional plan design strategy of shopping quotes and waiting for renewals has run its course. Unless you’re clearing a 20% bottom line each year, you’ll never keep up with the rising cost of healthcare.
For an innovative approach to plan design and creating a sustainable benefits plan, contact us today, and avoid the trap of waiting until the last minute to design your strategy.
About Matt Ingold
Matt has taken his combined experience in the US Marine Corps and HR tech to bring practical insights on leadership, administration, and HR technology to the Benetech Advantage Blog. When he's not writing or teaching, he can be found paddling throughout the Adirondacks!