Tips for Transitioning to a High Deductible Health Plan
As medical costs continue to rise, many employers have begun transitioning to High Deductible Health Plans (HDHPs). While this transition may feel like a big leap, there are ways to make it easy and effective for both you and your employees.
Ease Fears with Education
Changing medical plans can cause fear and anxiety with employees. One of the main reasons employees are afraid to transition to an HDHP is because they don’t understand how it works, or how it may benefit them. This roadblock can be solved with intentional, consistent communication.
The more information you can provide to your employees, the better prepared they’ll feel. Consider sharing educational videos or calculators to help your employees learn about their options.
It’s important to walk through how each plan you offer can work for every employee’s situation. Offering one-on-one consultations or group meetings is a great way to do this. When you consider employee contributions, deductibles, co-insurance, office visits, and prescriptions, sometimes the HDHP can actually add up to be a better plan for some employees.
Offer and Promote Health Savings Accounts
Health Savings Accounts (HSAs) are integral to helping your employees make the switch to an HDHP.
“If you promote an HDHP without an HSA, your employees could be at risk for a financial struggle. It’s important to understand how an HSA can help families long-term, and to not look exclusively at immediate premium savings with other types of plans,” said Oklahoma Account Manager, Shawn Parker.
Because funds can build over time and employees can update their contributions as needed, HSAs are an attractive option when comparing other types of medical reimbursement accounts.
Help your employees understand the math behind HDHPs by demonstrating how money saved on premiums could be allocated to a Health Savings Account (HSA) in preparation for larger health events. For example, here is a video explaining how HSAs work:
Educate Employees on How to Make the Most of an HDHP
With an HDHP, it’s important that your employees understand they have a choice in the care they receive. Because the HDHP has a higher deductible, employees need to understand their part in making financially responsible healthcare decisions. Angela Kyle, Account Manager, explains:
“An HDHP can help you control your healthcare. Before, I would go to the doctor and not be concerned about the cost of treatment. When we moved to an HDHP, I started looking more closely at doctors and asking how much payment was. I started learning more about benefits so I could make better financial choices.”
Another way to help your employees make the most out of an HDHP is to offer a Limited Purpose Flexible Spending Account (LPFSA) to pay for eligible vision and dental expenses.
Continue to Provide Multiple Health Plan Options
Although it may be the most budget-friendly option to have all your employees on an HDHP, it isn’t a one-size-fits-all solution.
According to Kyle, “It’s important to continue offering multiple plans because it can create a softer transition to an HDHP later on. I once had an employer begin offering an HDHP, and after three years, new hires were given HDHPs as their only health option. This worked out because new hires weren’t used to any other plan. Eventually, if the employer wanted to, they could phase their entire group to an HDHP because it slowly became more popular.”
Incentivize the Switch
One of the best ways to ease the transition to an HDHP is to offer an incentive to employees who choose the plan. An easy way to do this is to contribute to your employees’ HSAs, whether through an annual contribution or matching program.
“Take the difference in cost to you as an employer on your highest plan, and contribute those dollars into your employees’ HSAs on their behalf. This is now their money to use for eligible health expenses,” said Colorado Account Manager, Jeff McNeilly.
Another way to incentivize the switch is by offering supplemental insurance—like accident insurance, critical illness insurance, and cancer Insurance—to help employees meet their deductibles in the case of an unexpected health event. And, employees can use the savings they have with a lower deductible to pay premiums for these supplemental plans.
Be Confident in Your Decision
If you truly understand the benefits of an HDHP, your employees will start to do so as well.
“I’ve had lots of people come back the year after they switched to an HDHP and say, ‘I wish I had done this earlier.’ It can be a tough transition to go from a low deductible to a high deductible, but once they took that step, they were happy,” said Marianne Yost, Oregon Account Manager.
If you’ve recently made the switch to an HDHP or would like assistance transitioning your employees, American Fidelity can help. Our salaried account managers are trained on educating your employees on how all benefits work together to create a well-rounded health coverage plan.
Contact your American Fidelity account manager today to discuss your HDHP strategy.