Almost a quarter of employers offer a health savings account (HSA)-eligible plan option. That’s a jump of more than 20 percent since 2012, according to United Benefit Advisors. But enrollment in these plans lags behind their prevalence, with only 17 percent of employees selecting them.
Many employers are unknowingly undercutting their own enrollment rate with a poor communication strategy. This isn’t surprising — communication tends to be one of the biggest open enrollment challenges for employers, regardless of plan design. But if your employer clients are looking to maximize savings through increased HSA plan enrollment, an effective communication strategy will be particularly crucial to your success.
These plans usually are implemented with the hope of cost containment — consulting firm Mercer found HSA plans typically cost employers 22 percent less than traditional health insurance plans. But a low enrollment rate constricts these savings and frustrates employers.
Boosting employee enrollment in the HSA-eligible plan option doesn’t have to be an insurmountable challenge. In fact, a few small changes in the way brokers and employers explain the HSA option to workers can make a huge difference and increase plan adoption.
Calling the plan “HSA-eligible,” adjusting the cost, and using concrete examples to explain the plan design can result in significant improvement to enrollment and savings.
In other words, messaging matters. Let’s look at each tip for improving HSA messaging and boosting enrollment.
1. Whatever You Do, Don’t Call It A High-Deductible Health Plan
You might have noticed this is the first — and last — mention of HDHPs in this article. That’s on purpose. Nothing reduces enrollment faster than calling this type of coverage a “high deductible health plan.” Employees naturally think, “Well, what’s the alternative? A low-deductible plan? That sounds better — I am going with that!”
Cut that line of thinking off at the pass and refer to the plan as “HSA-eligible,” and the traditional plan as the “copay plan.” This pushes the emphasis away from the deductible.
Don’t worry — you will fully explain to your client’s employees how the plan works and what they can expect regarding their deductible. But you want to explain it in the right way. Leading with the words “high-deductible” will put the employees on the defensive and make them fear they are downgrading their coverage.
This simple change can make a big difference, but most advisors and employers never realize that the way they refer to the plan can hinder enrollment.
2. Charge the Same for the HSA-Eligible Plan — But Explain Why
This is the opposite of what most employers and benefit advisors want to do. Most think that by charging less for the HSA-eligible plan, they are targeting their cost-sensitive employees and boosting enrollment. However, this actually is hurting their strategy, not helping it.
Employees are cost-sensitive when it comes to their health plans; but remember, they don’t want to downgrade their coverage either. When employees see the new plan option is cheaper, they automatically will assume it’s worse coverage, and they will be reluctant to choose it.
Two things help prevent that assumption: Charging the same amount for the plan, and having the same network for the copay plan and the HSA-eligible plan.
When open enrollment comes around, address everyone’s concerns right away by saying, “We have a new plan option this year. It will cost the same to employees as our previous plan, and it has the same network. The only difference is in plan design.”
Then, share any HSA savings with employees by contributing to their HSAs. More than 36 percent of employers contribute to employee HSAs, and this percentage is expected to increase, according to the Society for Human Resource Management.
After you tell employees they will compare their health plans on design, you must effectively communicate the differences.
3. Develop Concrete Examples For Using the Plan
Your goal for explaining plan designs is to make understanding the designs as simple as possible. Avoid complex jargon and use concrete examples of how employees will use their plans. Use real-world scenarios and address what they can expect to pay, based on various levels of need.
You can point out that employees who are low users of the health plan will see a benefit right away. Under the copay plan, they had peace of mind over their coverage, but there was no associated financial benefit, because they weren’t using the plan. Through the HSA contributions, ththey now have a monetary benefit from their health plan. Be sure to point out that these funds roll over every year and can even be invested.
To the higher users, you can illustrate how the plan will work under various circumstances, including prescriptions and chronic condition treatment. You will want to explain how employees can think about surgeries or emergency care too.
Remember to point out — probably more than once — that employees who have more expenses will have additional funds to put toward their out-of-pocket costs, via the HSA contributions.
Ideally, you will want the out-of-pocket maximum to be the same as the deductible in the HSA-eligible plan. This way, you can explain to employees, “OK, you have a $5,000 deductible, but the employer contributes $800 toward that, and after you meet your deductible, everything is covered.”
Designing the plan in this way really contributes to employees’ ease of understanding. When you begin to explain the far more complicated copay plan design, all but your highest users naturally will gravitate toward the simpler HSA-eligible plan.
Support Employees Down the Road
Finally, you will want to think ahead about your support strategy to give employees further peace of mind. Under an HSA-eligible plan, employees will be subject to more cost variation, and the more assistance you can provide them, the better.
What does this mean? Providing access to price comparison tools and insurance or health care advisors can be immensely useful in helping your clients’ employees minimize their out-of-pocket expenses. When you announce the new plan option, mention these services as well. Then plan to release more information later about how employees can use them effectively.
Seeing the cost-reduction benefits of an HSA plan requires a little more than simply offering it. Ultimately, employers and brokers must develop a strategy to maximize enrollment and employee satisfaction. These goals can be accomplished with an improved message and a few basic support services.