HDHP Supplements – HSA versus Group GAP Coverages

shutterstock_252811903 - CopyHigh deductible health plans (HDHPs) have become popular since the implementation of the Affordable Care Act as a means to secure basic coverage and avoid noncompliance penalties. But these plans clearly leave their claimants vulnerable to a wide variety of costly health issues. Most employers and human resource directors know this, but the challenge is finding an affordable solution that benefits everyone. Spend too much of your HR budget and you risk dragging or company into the red. Offer too little in coverages and you’ll have difficulty retaining highly qualified employees.

For many years, Health Savings Accounts (HSAs) have been the defacto supplement to HDHPs. But these accounts have proven unattractive to employees for a variety of reasons, from complexity of use to perceived value. Group GAP coverages, however, have begun to change the way people think about health insurance. Here’s an example from our own consulting experience:

Challenge:  Workers were offered a high deductible health plan (HDHP) along with a Health Saving Account (HSA).  Employees were urged to put away monies to cover deductibles and cost sharing expenses. However, the company was facing poor employee participation and employee morale was low.

Solution:  At renewal, the Employer offered a second plan option for employees: a HDHP with Doctor’s Office Visit and RX copays PLUS several GAP insurance plan options employees could “pick and purchase” to fill in high deductibles and cost sharing expenses.

Result:  Enrollment response was overwhelming with the new Bronze/Group GAP plan, that the following year, the employer dropped the HSA plan and kept the HDHP with Doctor’s office visit and RX copays and GAP plan offerings.

To learn more about how your HR team can control costs and improve employee morale with GAP coverages, contact us.

HDHPs, Gap Coverages, and Enrollment Challenges – Where Does Your Business Stand?

shutterstock_251707783 smWith the sharp increase in HDHPs (high deductible health plans) offered by employers, utilization of voluntary benefits to fill related coverage gaps has not kept pace. Businesses must find a better way to help their employee acquire and maintain appropriate coverage, and those that do gain significant competitive advantage.

Nearly 60% of employers with 500+ employees offered HDHPs as a plan option in 2015, up seven percentage points from just one year prior, according to a 2015 bswift Benefits Study. Yet voluntary benefits such as critical illness, hospital indemnity, and accident insurance are still not regularly offered alongside HDHPs, according to a new survey released by Benefitfocus, a Charleston, S.C.-based HR and benefit technology solutions company. This creates significant gaps in coverage – especially for those with health issues that require periodic visits to the doctor and/or pharmacy.

While the aforementioned voluntary benefits products generally assist employees with financial hardships, only 36% of employers surveyed by the company offer at least one of these three gap products, with a scant 10% offering all three. To further exacerbate the challenges in providing adequate coverage, only 14% of employees are enrolling in them, the company’s 2016 State of Employee Benefits study finds. Communication is key to encourage employee participation in voluntary benefits, the study says. Experts say the timing of those communications is also important.

To learn more about HDHPs, gap coverage, and employee benefits communication, contact us.