In our blogs, we’ve discussed the rising costs of health care, the need for greater price and quality transparency in the industry, and an overall shift towards high-deductible, consumer-driven health plans to encourage health care consumerism and control costs. What we haven’t discussed is the impact Consumer Driven Health Plans (CDHPs) can have on your workforce.
If you are managing your company’s finances, you’re thrilled that CDHPs provide a strategy and a solution to curb one of the biggest expenses eating away at your bottom line. But if you’re an HR manager, you may be less than thrilled. After all, you offer health insurance as part of an employee benefits package. You may be thinking, “No one is to going like this insurance plan. How can we attract and retain quality employees if we only offer this consumer-driven health plan?”
Depending on your business’s industry and your company’s talent pool, a consumer-driven health plan may not be perceived as a real benefit. Some employees may be worried about meeting their deductible while others may simply want more coverage. Many CFOs and HR managers are finding a happy medium: Offer a CDHP as well as supplemental insurance and other services to fill in coverage where there’s a gap.
Here are the top solutions trending in the insurance industry today:
HRA/HSA Funding
Perhaps the best strategy for employers is to provide and/or fund their employees’ HRA or HSA accounts to help them meet their high deductibles. If you’re offering a CDHP for the first time, you can potentially use the savings from your plan’s lower annual premium to provide your employees with “seed money” and teach them how to save to use their health savings account appropriately. Depending on your business’s cash flow and budgetary needs, you may consider fixed monthly HSA contributions, a 1:1 match, or an HRA that will reimburse claims up to a fixed dollar amount as they are incurred throughout the year.
What does it cost?
It’s entirely up to you. Depending on your budget, you can start out small and work your way to higher contributions in later years as you see the cost benefits of your CDHP unfold.
Alternatively, you can fund aggressively out of the gate, incentivizing employees to migrate to the CDHP sooner rather than later. Be careful that you don’t fund up to the deductible, though. Employees can use these funds to burn through their deductibles, after which insurance will kick in, potentially incurring more claims that may spike your future plan renewal.
Supplemental Policies
Many employers are beginning to offer fixed-indemnity policies that pay cash for hospital stays, accidents, or specific disease diagnoses. Cash payments are based on a schedule determining the payout for specific injuries or conditions such as a broken ankle or a cancer diagnosis and can be used to pay for deductibles, copayments, income deficits, or travel expenses. While these products cannot replace major medical insurance, they cost less and offer important gap coverage for those concerned with meeting their deductibles in the event of an accident, hospitalization, or critical illness.
It is important to note that these policies cannot and do not fill in all of the gaps in a CDHP. If the policy does not specify a benefit for your medical condition, you will have to meet the expense with your own cash.
What does it cost?
Purchased on a per-employee/per-month (PEPM) basis, a typical policy is priced anywhere between $13 - $45 PEPM. Though relatively affordable, most employers offer these policies as voluntary benefits that employees can purchase if they desire the additional coverage, especially if they have a family history for particular illnesses or accident-prone members.
Patient Advocacy Services
As consumer-driven health plans encourage greater health care consumerism, employers are looking for ways to empower their employees to make quality health care choices. Health care advocates or concierge services are powerful resources for consumers. They provide consultation for your medical needs and negotiate on your behalf with physicians and hospitals to find you quality care for an affordable price, maximizing the dollars spent towards your deductible.
Advocates will also provide billing reviews to correct mistakes and eliminate superfluous charges that may appear on your bill and they’ll even negotiate payment arrangements to help you settle the bill. With a wide access to various hospitals, carriers, and specialists, advocates may even refer you to a specialist that you may not otherwise have been able to access.
What does it cost?
Employers typically pay $1 - $5 PEPM to provide this added benefit to their employees. Some employers build this amount into employee premiums to help them meet their deductibles.
Telemedicine
Offered as a supplement to your primary care physician (PCP), telemedicine services offer employees access to a physician 24 hours a day, 7 days a week for medical consultation when you are unable to go to a clinic or see your doctor. Telemedicine physicians are board-certified and licensed in your resident state, so they are qualified to talk about your primary care needs and prescribe appropriate medications when necessary.
It is important to note that telemedicine is not a substitute for a PCP and that telemedicine physicians will be quick to refer you to a PCP if you don’t already have one or advise a 911 call if you’re reporting a serious medical condition they are not capable of handling remotely.
What does it cost?
Telemedicine is also purchased via a PEPM fee basis (typically $1 - $3 PEPM) rather than charging any copays to employees and legal dependents who use the service. With such a low cost, many employers pay it in full for their employee, but you can also cost-share with employees.
As a business leader, you are chiefly concerned with staying in business which requires you to find ways of controlling costs and attracting & retaining talented employees. These two goals are not mutually exclusive. You can offer a competitive consumer-driven health plan and help your employees control their own costs or meet their deductibles by providing them with the funding or services necessary to bridge the gap.
