In a climate where rising healthcare costs continue to be a prominent concern among those planning for retirement, it is important for human resources executives to make sure that their employees are educated about the changes and options available to help manage costs and find the right solutions for their healthcare needs. No matter what stage of life your employees are in or how many Health insurance plans they’ve had, it’s important for them to understand the differences in plan types and how specific benefits might impact them financially.
A survey from HSA Bank of over 100 human resources executives showed that only 10% of them are “very confident” that their employees understand the choices they are making when it comes to health insurance.* Alternatively, 75% of these HR executives believe employees are “somewhat confident,” but in our mind, being “somewhat” confident is not good enough. To this end, health insurance plan selection is a huge decision, and employees would benefit from being very confident in their choice.*
While managing healthcare benefits is a top priority for HR professionals, making sure that employees understand their benefits is equally important. A lack of employee understanding of benefit plans may be a result of the increased complexity of the various plan offerings. Due to this overcomplication of the plans, employees may end up using the same plan as the previous year for simplicity alone. Knowledge is power, and we need to address this education gap in today’s healthcare ecosystem.
The lack of education and ability to choose the right plan presents a huge problem for employers that offer health benefits. Health plan comparison calculators are valuable tools to help employees compare plans. These calculators enable employees to determine what factors are important to their personal circumstances and what the best health plan would be for them. In fact, according to the HSA Bank survey, 33% of HR executives believe that the cost of care (copay amount) is most important when selecting a health plan, and 27% believe that a low deductible or out-of-pocket maximum is most important.* While these two factors are deemed most important by employers, HSA Bank believes that the total estimated annual cost of medical services (covered and out of pocket) is the most important factor when selecting a health plan. Seventeen percent of the employers surveyed agreed.* The estimated total annual cost takes into consideration the guaranteed costs individuals will face for health care (premiums), while the copay, deductible, and out-of-pocket maximum are variable costs that may not occur.
Steps for Choosing a Plan
How can HR professionals help employees make the right decisions about their health plan? It comes down to five simple steps:
- Have a defined communication plan based on your employee population.
- Work collaboratively with your benefits consultant because, with hundreds of different benefit providers and varying levels of coverage and cost, the process of picking and choosing a benefits plan that is both cost effective and high quality has become an incredibly specialized field.
- Start the conversation early about health plan choices and how to evaluate plans.
- Help employees make the right decision for their situation by offering dedicated one-on-one and group time, either virtually or in person, for employees to ask questions.
- Provide education year-round about how to not only select plans but also best utilize the plan chosen.
To take things a step further, HR executives can also help their employees define what the “right” plan really is for their needs, lifestyle, and retirement goals. Some employees might be unclear on how to determine what the right plan is, but it simply means selecting the plan that provides sufficient coverage for the individual’s unique healthcare situation. Additionally, the right plan should meet an individual’s comfort level in terms of budget and financial risk. On the other hand, choosing the wrong plan could mean paying more without getting more coverage or benefits in return.
Health plan decisions are indeed complex, but we can help simplify the selection process. It is imperative for HR executives and the company to provide the tools necessary for employees to evaluate plan options. This helps employees understand the importance of their decision for their physical and financial health. And remember, when it comes to educating employees, you are not alone. Work with your HSA provider and benefits consultant to educate employees and help them make the most of their benefits.
Finally, if you want tips on managing the complexities of healthcare in keeping with the ACA, join us at HR Comply in Las Vegas on November 16th for the session, “Healthcare on the Fringes: The Complexities of Keeping ACA-Era Costs Down and Benefit Plan Offerings Consistent with Your Business Strategy.” That session will be presented by John Hickman, Esq., Alston & Bird LLP and Darrell Moon of Orriant.
Chad Wilkins is the President of the HSA Bank.
*Results from a proprietary third-party survey commissioned by HSA Bank, April 24–26, 2018, surveying 100 human resource and benefit professionals.
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