Three Employee Communications When Introducing HDHPs
Who doesn’t want to reduce stress on their employees? Apparently, open enrollments aren't helping.
A recent study conducted by Harris Pole of over 2100 employees revealed that roughly 50% of employees find the open enrollment process to be “Always Stressful” and over 40% described selecting health benefits as “Very Confusing.”
Makes sense—you’ve got HMOs, PPOs, EPOs, HSAs, FSA, HRAs, HDHPs…and suddenly I’m thinking about Robin Williams in Good Morning Vietnam.
When employees are looking at selecting a High Deductible Health Plan (HDHP) for the first time, here are a few things worth sharing.1. "You pay less money, you assume a higher risk." HDHPs have a lower premium cost because members assume a greater out-of-pocket expense for health claims. For a person that rarely submits a health claim (maybe 2-4 visits to a physician each year), an HDHP makes sense—the savings in reduced monthly premium payments far surpass the employee’s out-of-pocket copays and deductible.
For those employees that find themselves to be accident prone, treating an ongoing or chronic illness, or planning on having a baby in the coming year, it’d be wise to map out projected expenses before committing to the immediate savings offered by HDHPs.2. "You're possibly over-insuring yourself with an HMO or PPO." Perhaps we’re approaching the same discussion point as above from a different angle, but nonetheless it’s a valid point. Employees may be used to the low deductibles and copays associated with traditional HMOs and PPOs, but many aren’t using the benefit enough to get their money’s worth.
If employees require the convenience and assurance of frequent visits to their in-network primary care physician, then perhaps the high-cost (typically $200-$400 per month more than a HDHP) might be worth it. The trend that has kept insurance companies in business over the years is that people tend to air to the side of over-insurance.
3. "This is a team effort. Your Employer is shouldering the burden, too." While rising healthcare insurance costs can typically lead to some understandable hemming and hawing amongst employees, employers can often stay the complaints with greater transparency in how rising costs are impacting the overall organization. The common misconception is that employers are asking employees to tighten their belts while they get fat. In most occassions, this just isn't the case.
Transparency is particularly important when approaching the collective bargaining table. Most employees have no idea that employers are tightening their belts and shouldering the burden of heightened healthcare costs. If there isn't anything to be bashful about, make the truth public. Issue total compensation reports to employees, and make sure they understand the full investment that the employer is making on their behalf. Salary and benefits are only part of the story.
By taking an approach of transparency with employees about rising healthcare costs and their overall implications on the company, employers can avoid breeding bitterness and invite employees to be part of the solution. HDHPs are great options for healthy employees, and assuming they are a right fit for the right reasons, employees may find the cost savings their enrollment secures for the organization to be the swing vote in making their final decision.
Have a little faith in your employees. We are in this together.
Rolling out an HSA with your HDHP for the first time? Read about the Common Pitfalls When Transitioning from an FSA to an HSA.