Consumer-directed health plans (CDHPs) have become a mainstream benefit offering. Spurred on by the need to avoid the excise tax, employers have added these low-cost plans at a fast clip over the past few years. In 2015, 29% of all employers – but 59% of those with 500 or more employees – offered an account-based CDHP, and a total of 25% of all covered employees were enrolled in one, according to Mercer’s National Survey of Employer-Sponsored Health Plans. Now more than a decade old, CDHPs were designed with the goal of holding down cost by encouraging cost-consciousness among consumers. The best CDHPs promote personal responsibility for maintaining or improving health and for choosing cost-effective, quality health care providers.
Most employers still offer a CDHP as an option alongside a traditional PPO or HMO plan. If you’re looking to increase your CDHP enrollment this year, we have a few tips to get your numbers up – whether you have a new or existing plan:
- Sweeten the deal. Offer some great features that you can advertise to your employees in your benefit communications. For instance, seed the HSA and provide funds in January to give employees a start. Our survey shows that in 2015, 37% of eligible employees enrolled in HSA-eligible CDHPs (if offered as a choice) when their employers contributed $800 or more to their HSAs, compared to just 22% when their employers didn’t contribute at all. Another idea is to pay for supplemental health policies, such as critical illness and accident coverage, to help fill gaps for employees.
- “Upset the apple cart” and disrupt current plan offerings and/or employee contributions by plan. The most effective way to get employees to migrate to HSA-eligible plans is, quite simply, to offer only these plans. But if, like most employers, you want to continue to offer a choice of a traditional plan, change up the entire array of plan offerings. Disruption can be a big motivator; without their current plans to fall back on, employees have to pause and spend time to review their options and choose a plan. Employees will be more likely to consider CDHPs under these circumstances, especially if employee contributions are favorable. Also, requiring active enrollment in this situation can translate into higher CDHP enrollment since employees can’t default into their current plan and must make an election.
- Provide decision support. Benefits enrollment isn’t exactly what most employees would call fun. You can at least make it easier by providing a tool during enrollment that allows employees to model which plan has the best cost/features for their situation. It’s also important to create a seamless enrollment experience for your employees, for electing an HSA-eligible plan and for opening the HSA at the same time. Some employees miss out on the employer’s HSA seed because they didn’t open the HSA (don’t need to add, but clarifies a bit).
And, once you’ve done all (or some) of this, make sure to get the word out to your employees. Communication is vital. Just over half of HSA plan sponsors say they provide extensive or very extensive communication to their employees, and among these employers, the average enrollment is 35%, compared to a mere 24% among those providing less extensive communication. In other words, it’s not enough just to provide tools and resources – you have to motivate your employees to use them to take control of their benefits decisions.
This post is part of our 2017 Planning Checklist series.