Open-enrollment season is in full swing, offering a unique opportunity for employers to engage and guide their workers through the selection of consumer-driven health care (CDHC) plans and accounts that result in better outcomes and lower costs system-wide—a win-win for employers and employees alike. But to achieve true engagement, employers must implement effective engagement strategies and tactics, as well as lead the way in changing the conversation about CDHC.
The migration to CDHC—and away from traditional health plans—continues at a rapid pace and is expected to continue to grow exponentially. According to the 2018 Large Employers’ Health Care Strategy and Plan Design Survey from the National Business Group on Health, by 2020, 97% of all of the largest employers will offer CDHC programs, with smaller employers expected to follow suit. Perhaps more significantly, the survey also reveals that, by next year, 39% of these employers will scrap traditional health plans altogether in favor of high-deductible health plans (HDHPs) and CDHC account offerings—a phenomenon referred to as “full replacement.”
What this means for employers and their advisers is that the conversation about engagement will need to change significantly—away from simply helping employees compare plan features and costs, and more toward helping them understand how to function and thrive within this new paradigm in which, in the near future, CDHC plans will most likely be the only option.
This is significant in light of the fact that consumer fluency concerning CDHC is low and confusion is high. This is illustrated by recent research from Aite Group showing that consumers are running only 17% of their eligible medical expenses through tax-advantaged CDHC accounts, leaving a whopping $100 billion dollars in tax savings on the table—by conservative estimates. It is well-established that optimized CDHC programs result in significant tax savings, better health and lower costs. So, how can employers bridge the fluency gap to help seamlessly guide employees through the inevitable journey toward CDHC to help them capture their fair share of savings?
Strategies for Improving Engagement
With the migration toward full replacement in mind, here are some top engagement strategies employers can implement to change the hearts and minds of their workers about CDHC programs to drive increased adoption:
- Because all health plans comes with out-of-pocket responsibility, they should automatically be paired with a CDHC account that is positioned as complementary to the plan, as opposed to being presented as a disparate option.
- Employers are often sensitive about managing change, which can result in a tendency to make it too easy for employees to stick with the status quo. Sometimes employers must commit to being purposefully disruptive, however, to break down objections and barriers to adoption.
- Making company executives visible and vocal throughout the open-enrollment process—especially when undertaking great change—can help employees understand that everyone is in it together.
- Poor plan design is the most common reason for enrollment disappointments. Good plan design starts with a clear objective and follows some key guidelines, such as: Including higher deductibles and promoting larger account balances to encourage a greater degree of consumerism (In other words, the more stakes the consumer owns, the better he responds); and designing newly introduced plans as “benefit neutral” at a minimum, providing employees with equivalent value, but with cost savings.
- Employers should contribute dollars to employees’ CDHC accounts. CDHC account adoption increases exponentially with direct-dollar contributions from employers—from 35% adoption without contributions to 89% with an average contribution amount of $975.
- Good communications are as important as good plan design for aiding CDHC adoption. A wide variety of simple, straight-forward and positively focused decision support materials should be made available, covering a broad range of topics and distributed over a multitude of channels—both digital and traditional.
- Employers should help consumers visualize outcomes and savings potential by providing interactive tools that show the effects of increased contributions in terms of compounded account growth and tax savings.
- To streamline onboarding for new CDHC benefits, employers should break down “a day in the life” of using new plan features and accounts to help remove fear of the unknown as a barrier to adoption.
- Taking a more active role in teaching people the value of investing in health savings account (HSA) assets compared with other investment vehicles such as 401(k)s can help change the consumer outlook on account contributions.
- Employers are the gatekeepers to employee engagement. All stakeholders should ensure that employers are better educated and prepared to drive enrollment, by implementing a train-the-trainer model to improve in-house expertise.
A solid engagement strategy will help build better engaged and better prepared health care consumers who actively seek information in order to make better saving and spending decisions—an imperative for helping them survive and thrive, as their employers increasingly move toward full replacement with CDHC programs.
John Young is senior vice president of consumerism and strategy at Alegeus, which helps CDHC stakeholders thrive in a rapidly changing health care marketplace with the industry’s largest and most comprehensive consumer health care funding platform.
With more than 31 years of experience in the employee benefits industry, John has helped seamlessly guide numerous employers through full replacement to CDHC, and is devoted to improving the consumerism experience through all stakeholders. He is active in advising policymakers and trade organizations on health care reform and consumerism.
This feature is to provide general information only, does not constitute legal or tax advice, and cannot be used or substituted for legal or tax advice. Any opinions of the author do not necessarily reflect the stance of Strategic Insight or its affiliates.