HSAs
Helping Employers Ease Into Consumer-Directed Health Plans and Health Savings Accounts
by Kristin Komen

Just weeks before the beginning of the plan year, a broker informed a major client that annual health insurance premiums were increasing by nearly 20%. The client, a manufacturer with operations in multiple states, decided to try a new approach. The CEO suggested switching to a consumer-directed health plan (CDHP). But, the broker tried to dissuade him, insisting that few employees would sign up.

That broker quickly became the ex-broker. The CEO was fully committed to instilling a culture of health and personal responsibility. He found a new broker who was just as enthusiastic about introducing a CDHP and health savings accounts (HSAs) to the workforce. The CEO was pleased that the new broker shared his belief that consumerism and wellness can work as a powerful pair to manage healthcare costs over the long term.

This kind of episode should be a wake-up call to brokers serving the California market. Many brokers in California have been slow to embrace consumer-directed plans, thereby missing out on the growing interest employers have in lowering premium costs and making lasting changes in the workers’ approach to health and wellness.

More than one-half of large companies offer consumer-directed health plans nationally, according to a survey by Watson Wyatt Worldwide and National Business Group on Health. Another 8% expect to adopt a consumer-directed plan by next year.

Brokers can prepare to help transition employees to CDHPs and HSAs during the benefit enrollment season. It helps to understand that transitioning to consumer-directed health involves more than making a change to the plan design or hosting a one-time benefits event. It requires a long-term strategy to create a larger culture of wellness and consumerism. Here are some recommendations for transitioning to a CDHP.

Get the Senior Leadership Involved

Experience with hundreds of transitions to CDHPs and HSAs has proven that the support of senior management is vital to successful enrollment. For example, one distribution company built a culture of health in several ways. Its headquarters is located on a golf course, senior managers exercise at the onsite gym nearly every day during work hours, and the vending machines dispense healthy snacks. The CEO, not the benefits or human resources departments, took the lead in introducing the CDHP as a natural extension of the firm’s emphasis on health and personal accountability.

A CEO at a large energy company formed a road show to roll out its new HSA benefit program. Representatives from the human resources department teamed up with health plan reps to meet with employees, face-to-face, at dozens of locations. The CEO explained how he was able to save hundreds of dollars by switching from a brand name heart medication to a generic drug and how he encourages his own family to use the health plan’s nurse hotline.

The CEO of another company issued a company report in mid-summer to lay out, in general terms, the healthcare cost pressures facing employers and employees and their impact on the company. In late summer, the benefit staff introduced the basic concept of consumer-directed plans and how HSAs can help employees plan, save, and pay for healthcare. By open enrollment that fall, employees only needed to be educated on the plan’s specific provisions.

Find the Right Partner

Brokers can help clients address the natural resistance to change among many employees by aligning with a carrier or administrator that offers educational materials with simple, direct messages about CDHPs and HSAs.

One of the best ways to make sure that employees understand a new plan is by providing examples of how the plan works for typical employees and how it compares to other plans the employer is offering. For example, many employers or their brokers build profiles of three types of employee to show how each might fare under the new plan: a young single person, a family of four, and an older couple whose children no longer live at home. Yearly examples of healthcare spending show how the different employee types pay under the different plans (if there are options) and what happens if the employee or family member has a chronic condition or gets sick and needs to be hospitalized.

Of course, selecting the appropriate scenarios depends on employee demographics. For example, some brokers use one scenario for union workers and another for non-union workers. Employers appreciate brokers who offer these kinds of educational tools because they ease the decision-making process and help make the case for moving to HSAs.

Inform The Family Decision-Maker

Savvy brokers understand that the employee may not be the healthcare decision-maker in the family. So they encourage employers to invite employees, spouses, significant others, and even teen-age children (particularly in families of non-native speakers) to attend open enrollment meetings. That way, those who make the doctors’ appointments and pay the bills can get a first-hand feel for HSAs.

Employers sometimes hold evening calling hours so the employees and family members can ask questions about their accounts. Before or during open enrollment, other employers place an information table outside the cafeteria, during lunch hours, where the broker or carrier representative helps explain the benefits of HSAs.

Some employers prefer to educate employees about HSAs as part of a benefits fair where employees can learn about their plans and get free blood pressure and cholesterol checks, discounts at local fitness centers, and other freebies. This kind of event emphasizes the connections between wellness and healthcare costs.

Test the Call Center

A broker who has assessed the knowledge and level of service of the carrier, bank, or administrator is a tremendous asset to employers. Before open enrollment, brokers should call the toll-free number and ask the kinds of questions that employees ask frequently, such as which medical expenses are eligible, the tax advantages of an HSA, and whether unused HSA funds can be rolled over into future years.

Brokers should also alert their clients to potentially sensitive topics that should be discussed before, during, and after open enrollment, such as the following:
• Can I fund my HSA if I am covered by the flexible spending account (FSA) at my husband’s company? (Depending on the circumstances, an employee may be ineligible to contribute to an HSA or accept employer contributions while covered by a spouse’s first-dollar health plan.)
• Can I fund my HSA if I am covered by Medicare? (Again, depending on circumstances, the employee may be able to enroll in a high-deductible plan but be ineligible to have her HSA funded.)
• What are the HSA rules if my husband and I are both over 55? (In some cases separate HSA accounts may need to be opened)

Open enrollment is the time to reinforce key messages so employees don’t get confused about how the health plan and bank account work. For instance, -employees who are accustomed to FSA use-it-or-lose-it rules may confuse them with HSA rules. Others fail to open a bank account because they assume incorrectly that their employer is doing it.

It’s easy for employees to forget the details of HSAs -- much less the basics that were described in the company newsletter they received a month before open enrollment. Give them easy-to-use checklists to make sure they take care of opening accounts, they understand employer contributions, and they understand how they can contribute.

Never Stop Educating

Your work isn’t over when open enrollment season ends. Educating employees about HSAs is an ongoing process. After the plan year begins, it’s a good idea to help your clients provide follow-up information or even host question-and-answer sessions to help employees get comfortable with their plans and their HSAs.

By providing a steady flow of information, employers can achieve higher employee satisfaction. In fact, 82% of those who had an HSA for at least one year were satisfied with their accounts, according to a recent OptumHealth survey of 500 people nationwide. One thing is clear, investing the time in education and support will pay off for you and for your clients.
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Kristin Komen is the regional sales director in California for OptumHealth Financial Services. She can be reached by email kristin.komen@optumhealthfinancial.com or by phone at 949-251-9540.