A study by Chicago-based Alliant Credit Union finds that high-deductible health plans (HDHP) coupled with health savings accounts (HSA) can be a good fit for many employers and employees. However, introducing such an employee benefit provides an employer with both opportunities and barriers that must be handled with care for a successful implementation.
To gauge employees’ knowledge and perceptions of HDHPs and HSAs, Alliant conducted a survey of 1,020 people who represented a broad spectrum of company sizes and industries. It also conducted follow-up personal interviews with individuals who are–or were–enrolled in an HDHP to learn about their experiences and attitudes around HSAs. Alliant found that companies can save 20% to 40% of their health insurance premiums and defray future premium increases by implementing an HDHP. However, HDHPs suffer from an image problem and an awareness challenge. Unless employees work for a company that offers an HDHP, odds are they don’t know what it is. In fact, only 32% of the employees in the survey had heard of an HDHP if their company did not offer one.
When respondents were introduced during the survey to the concepts of an HDHP and an HSA, 53% said they wouldn’t consider an HDHP if they had a choice. On the other hand, 32% said they would consider switching to an HDHP if it was offered at their company.
Employees in companies that offer an HDHP chose it because:
- 69% preferred the low premiums
- 45% liked the tax-favored HSA option
- 26% saw the plan as a good catastrophic care plan/safety plan
- 36% appreciated the employer match
- 31% enjoyed the freedom of choice for their doctors and hospitals
On the other hand, respondents declined the plan for the following reasons:
- 44% considered the deductible too high
- 23% didn’t think the price was aligned with its value
- 20% preferred traditional coverage
Alliant’s white paper, “Is an HDHP/HSA the right prescription for your company?”, notes that companies have a better chance of effectively implementing an HDHP if they:
- Introduce it as an option in addition to “traditional plans,” such as HMOs and PPOs
- Are transparent about employee benefit insurance costs
- Select a good HDHP, particularly one that covers annual checkups and preventive care before a deductible is considered
- Fund employees’ HSAs (at an amount of 50% to 70% of the employees’ deductible)
- Do a good job of pointing out the comparative benefits among their company insurance plans, enabling employees to self-select an HDHP, based on their needs and its perceived value
- Provide the HDHP within the context of other wellness programs
- Choose their HSA custodian wisely