Consumer-driven health plans can play a robust role in your health program strategy. These low-premium, high-deductible health insurance plans can help control employer costs and put more control in the hands of employees. They are often paired with Health Savings Accounts (HSAs) or flexible spending arrangements that employers contribute to.
A recent study from the Employee Benefit Research Institute shines some light on how employees use CDHPs, and it’s clear education is key when it comes to taking full advantage of the benefits. “Health Savings Accounts can be seen as complex so we want our client’s employees to have a clear idea of how and when to utilize them properly,” says Curry Bradley, Winston Benefits’ chief marketing officer.
More CDHPs, More Employees Participating
According to the report, almost 15 percent of privately insured adults were enrolled in a consumer-driven health plan last year, and among those with traditional coverage, a growing number have the option to choose a CDHP. Those who choose them stay enrolled for a longer time. The financial benefits of using an HSA with a CDHP make it an attractive option for employees. “When coupled with a CDHP, HSAs help employees stretch their current and future healthcare dollars through employer contributions and tax savings,” Bradley says.
Increased Numbers of Contributions
Employer contributions are one of the best ways to build interest in CDHPs. According to the EBRI report, more employers contributed to HSAs in 2016 (78 percent compared to 67 percent in 2014) than in the past, and the dollar amount increased as well. As a result, more than half of CDHP enrollees opened a health savings account to take advantage of growing employer contributions, the report found.
At Winston Benefits, we realize the value HSAs add to employee benefit programs, especially when employers make a contribution. If you’re considering a CDHP, it’s important to look at all the different savings and flexible spending options you can offer with them to maximize their usefulness to employees.
Choices Drive Behaviors
While CDHPs are often touted as a way to keep employer health insurance costs down, they can also lower healthcare costs across the board. The EBRI report found that adults in a CDHP were more likely than those in a traditional plan to exhibit a number of cost-conscious behaviors. For example, those in a CDHP were more likely to say that they had checked whether the plan would cover care.
To be effective in changing behaviors, employers need to communicate clearly about CDHPs so employees know what to expect, which can help them make the right choices for themselves and their families. “Properly educating employees in regards to their benefits plans will always lead to better benefit decisions,” Bradley says. “This is especially true for complex plans like High Deductible Health Plans and Health Savings Accounts.”
Winston Benefits is an HR solutions company that helps businesses enhance and optimize employee benefit plans, enrich compensation and rewards programs, and save money on benefits communication, enrollment and administration. Contact us to learn more.