I love HDHP’s, or high deductible health plans. I think they are great. I find they are easy to understand, provide lower overall costs, and offer huge tax benefits! What’s not to love! We are seeing many more employers offer HDHP’s and if implemented correctly, employees may start taking charge of the their own health and wellness. BUT, it’s a long road from here to there.
In order to maximize the success of your HDHP, try and avoid making these five common mistakes.
Failing to use or offer and HSA (Health Savings Account). An HSA is a tax advantaged account that allows employees or you to set money aside to pay for qualified medical expenses. Employers can contribute to an employee’s HSA to encourage participation and engagement.
Failing to analyze employee population. HDHP’s aren’t a one size fit’s all approach. It’s important to survey employees before implementation of the HDHP to discover what current perceptions exist and how knowledgeable employees are. By doing this you can focus on areas that need clarification and help perception. Look at average age, general health and health literacy of your employees to assist in decided whether an HDHP is right for your organization.
Implementing and HDHP without educating employees. The success of your HDHP is really dependent on clear, consistent communication. At Thams Agency we have a library of materials to help assist you in educating. Many times employees have pre-conceived notices and may be skeptical to enroll in the HDHP for a number of reasons. They may think they will have higher out of pocket costs or less coverage. Sometimes a lack of understanding will cause a person to choose a higher cost traditional plan instead of a tax favored HDHP/HSA.
Picking the wrong plan design. No two plans are the same. Analyzing data and consulting a professional is important to help determine which plan is bets for your organization.
Failing to supplement and HDHP with other benefits. Lifestyle behaviors are significant factors in the cost of health care. Studies have shown that behaviors can be modified through the use of Wellness programs and other voluntary benefits. Personally, I don’t think these programs have the intended outcome for the effort expended. I believe change must come from within and these programs don’t really motivate people to eat healthier or exercise more. But if your program is successful, you can reduce future medical costs.
I hope you found this information useful. If we can be of any assistance, please contact us.
About Todd Thams
I am the Principal of Thams Agency and an active insurance broker. I have been providing insurance services since 2004. My family has been providing insurance since 1934 and if you have a question or an insurance need, I’d like to show you how we can help.