For companies looking to reduce their health care benefits spending, the high-deductible health plan (HDHP) represents a powerful way to shift costs to employees and encourage thriftier health care utilization, a report from Benefitfocus notes.
The promise of big savings on claims expenses has recently led more and more large, self-insured employers to introduce HDHPs as an alternative to their traditional, copay-based plans, such as preferred provider organizations (PPOs), health maintenance organizations (HMOs) and point-of-service (POS) plans. But for midsize employers, many of whom are fully insured (and not directly responsible for paying claims), the HDHP appears to be less of a priority right now. Benefitfocus found only 11% of midsize employers on the Benefitfocus platform offered at least one HDHP in addition to traditional plans for 2016. And in those situations, employees had much more choice in traditional plans, which outnumbered HDHP options 1.8 to 1.3.
The company contends that while the relative lack of HDHP offerings in the midsize market might make short-term sense for employers (less urgency to reduce claims) and their insurance carriers (adverse selection concerns in a smaller risk pool), it could be at the expense of employee wellbeing and benefit cost control in the long run. Many employees in traditional health plans are over-insured, paying premiums for care they won’t need. According to the report, the average PPO plan at midsize employers carries a $1,415 deductible for individual coverage and a $3,403 deductible for family coverage. Additionally, many traditional plans create little incentive to change unhealthy behaviors and can lead to overutilization, which ultimately drives up the cost of care—and health insurance—for everyone, including the employer.
As the health care industry continues to move towards a more outcomes-based, consumer-driven model, it could be well worth it for these employers (and their carriers) to re-evaluate their current offerings and develop strategies that better align with the varied health and financial needs of employees.NEXT: How to offer more choice
Jeff Oldham, vice president, Benefitstore at Benefitfocus, tells PLANSPONSOR, “A well-designed benefit marketplace should include a variety of traditional plans like PPOs and HMOs alongside HDHPs. In offering more plans, employers should also utilize an enterprise benefits management platform, with data-driven tools that enable demographic analysis and current health plan evaluation to help employers determine which options will best fit the needs of their employee population.”
However, according to Oldham, despite this technology, core medical plans fail to provide a one-size-fits-all outcome. He suggests employers also give employees the opportunity to utilize health savings accounts (HSAs) or flexible spending accounts (FSAs), benefits that can help pay for unforeseen costs, tax-free. “HSAs or FSAs should also be layered with additional voluntary benefits, such as accident, critical illness or hospital indemnity and digital health services. Providing a comprehensive benefits package helps consumers achieve a more holistic approach to health care for their families and in some cases provide more affordable and convenient access to basic care,” he says.
Oldham says offering more plans and benefits should not complicate the enrollment process. “When presented through a single enrollment workflow, employees can gain greater context and understanding of how their benefits can work together. This both increases the likelihood that employees will adopt the coverage they need to stay healthy and financially secure, and gives employees a better idea of the full value their employer is providing,” he concludes.Benefitfocus’ inaugural State of Employee Benefits research report uses actual enrollment transaction data—aggregated anonymously across the Benefitfocus client base—to present an annual snapshot of employee benefits activity.