In past years, employers had the idea that the more employees who use high-deductible health plans (HDHPs), the better the cost savings, but that push backfired, says Kim Buckey, vice president of DirectPath, a health care consultant for large employers, in Boston.
“Participants see the high deductible and panic. Employers may have seen cost savings in the short term because participants were not using the plan. But not getting regular checkups and treatments lead to major health issues down the road that drive up costs,” she says. “Now employers are focusing on getting employees in the right plan for them.”
The key to increasing employers’ return on health care benefit spend is helping employees be as healthy as they can be, according to Tracy Watts, a partner and leader for U.S. health care reform at Mercer in Jacksonville, Florida.
But, it’s not that employers just want to help employees be healthy for cost reasons. “Sometimes employees get skeptical about who has their best interest in mind, but employers work hard to offer special programs designed to help employees get healthier. It’s disappointing if employees don’t participate or engage in enrolling in a health care plan” Watts says. “Employers should stress that they want participants to get healthy and get the right medications, because a healthy employee is a happy employee, and if employees’ family members are healthy, they are also more likely to be happy.”
Getting employees into the right plan
According to Buckey, employers should focus on general education about how health benefits work. Because it is such a confusing topic, she notes, studies have shown people spend much more time researching cell phones for a purchase than evaluating health benefits.
“Employers will save in both the short and long term when employees understand how to choose the plan that is right for them,” she says. “If they don’t understand, they tend to take easy way out: make no change at all, rolling over their prior year’s election; ask friends what they sign up for and do the same; or go with cheapest option, which may end up not really being the cheapest.”
Buckey says the biggest thing is focus to focus on, “What’s in it for me?” Plan sponsors should make clear to employees that the benefit of researching options is to ensure an employee and his family’s heatlh is protected.
Bob Armour, chief marketing officer (CMO) at Jellyvision in Chicago, calls this WIIFM, and it can be different for different people. Plan sponsors should craft a different WIIFM for different groups. For example, he says, Millennials want to be part of something and are always looking for free money, someone new to the company will have a different WIFFM than someone close to retirement, etc.
“At Jellyvision, we have a statement that plan sponsors need to approach open enrollment like a marketing event, and use the basic tenets of that to get people to turn out—and excited about turning out,” Armour says. To do that, he suggests plan sponsors fashion motivating messages. “When plan sponsors take a rinse-and-repeat approach, employees end up thinking, ‘This is the same old thing, so I’m just going to stick with what I’ve selected because it seems to work for me.’”
According to Armour, there are two primary motivators for messaging for any event—love and fear. People love making the right choices, love knowing their family is secure and love saving money. On the other hand, people fear missing out on the opportunity to choose for themselves rather than have something chosen for them, and they fear missing out on benefits others are getting.
Armour adds that the message can also be flipped from something employees have to do to one of the biggest components of their financial wellness.
DirectPath advocates for coaching or decision support tools, Buckey says. “An employer can sign up with us and arrange to have benefit educators available to employees either on site or via telephone. During 20 minutes with employees and spouses or significant others, they can ask any question no matter how embarrassing, which they wouldn’t ask in a group meeting. The benefit educator will present all options available to the employee and make sure they understand them, then help them through the decision making process.”
According to Watts, tools that pull in prior claim history and show what out-of-pocket costs will be under each plan are very effective. She says most tools today have a way for employees to simulate their circumstances—they can put in an estimate how many doctor office visits or prescription refills they expect in the next year, but others automatically bring in data from prior claims.
Other cost savings for employers
Armour points out that employers incur costs from printing health benefit education and open enrollment materials, traveling to different locations to meet with employees, and having productive workers moved to other tasks during open enrollment. They should consider whether there are ways to cut down on those expenses.
Plan sponsors should also set goals for what they want to get out of communication materials and education efforts; for example, how much participation they want to get in their HDHP. “CFOs are not going to be pleased with human resources staff just doing communications; they want to know how it affects the bottom line,” he says.
Armour adds that, unlike defined contribution retirement plans for which employee deferrals have no cost benefit to employers, there is a cost benefit to employee contributions to health savings accounts (HSAs). “Half of the FICA tax that employers would pay from an employee’s salary doesn’t get taken from employer. This saves employers 7.5 or 7.65 cents per dollar,” he says. “Tax benefits resonate with employees, but also with the finance folks in the company.”
Armour suggests the messaging to participants should be: “You’re going to have health expenses between now and the end of your life no matter what, so why not pay at a discount using HSAs.
“Past surveys have shown that employees who feel their employers benefits communications are effective are far more satisfied with their jobs (and as such, are more likely to be productive and less likely to leave)—having a real impact on the employer’s bottom line. Interestingly, even companies with below-average benefits but effective communications tend to have a high employee satisfaction level,” says Buckey.
Post enrollment education
For employers and employees to realize health benefit savings, employees need to maximize the use of their benefits. According to Watts education about how to get the most out of their health plans and free offerings by employers is great for after open enrollment and all year long.
Buckey says employees should understand they can save money on premiums and total cost of plan by making the right decisions. For example, they can go to an urgent care facility instead of and emergency room, or they can shop prescription drug prices.
“One of our other lines of business is transparency,” she says. “An employee of our client can call and say he needs an MRI, and we provide a report with prices at different facilities.”
Both Buckey and Watts point out that many employees don’t understand that preventive care is covered and should be reminded of that.
Watts adds that if more specialized networks available, such as accountable care organizations (ACOs) or narrow networks, employers should remind employees how using these networks will bring savings to them.
Employers should also promote low-cost or no-cost types of care they offer, such as nurse lines or telemedicine. In addition, Watts says, many employer plans now offer special support services for people with certain chronic conditions—diabetes, blood pressure, asthma—designed to help employees be as healthy as they can be.
And Watts has seen programs designed to help people get expert medical opinions—something different from a second opinion. “When an employee gets a super scary diagnosis or has a condition for which he has gone to several doctors and is not getting better, he can be referred for an expert medical opinion.“Employers need to talk about ways to take advantage of health benefits a lot—not just at open enrollment,” Watts says. “People forget about things. It’s one thing to offer a program, but it’s another to make sure people are of aware and know how to use them.”