High deductible health plans continue to demonstrate broad appeal even as Congress attempts to pass alternative healthcare legislation. While HDHPs have proven quite effective for some of their insured, many fail to get the specific care they need. High-end health plans that offer more coverage cost dramatically more as services are expanded in every direction. But healthcare isn’t a universal issue with a universal solution.
Surprisingly, both employer and employee adoption of GAP coverages remains low. Some of the most significant voluntary benefits such as critical illness, hospital indemnity, and accident insurance are still not regularly offered alongside HDHPs, creating alarming gaps in coverage – especially for those with health issues that require periodic visits to the doctor and/or pharmacy.
Even when they are offered, employee enrollment rates are modest – a challenge for employer and employee alike. Companies that fail to offer gap coverages and leverage their adaptability as a strong employee benefit will fail to remain competitive in the long term – whether legislation changes or remains as it is today. To learn more about HDHPs, gap coverage, and employee benefits communication, contact us.
Most employees focus on comparing insurance carriers and which plans they provide during open enrollment. Employees want to choose the most cost-effective coverage that meets their needs. This task is getting harder with each passing year due to rising health care costs. One often disregarded benefit is a health savings account (HSA).
An HSA is a savings account that employees use toward future medical expenses. Both employees and employers can contribute to HSAs. In order to be eligible for an HSA account, the employee must enroll in a high-deductible health plan (HDHP). Most companies offer a variety of HDHPs. An HDHP is an insurance plan with lower than average monthly premiums and a higher deductible. HDHPs combined with HSAs save employers more in the end over health services covered by a health maintenance organization (HMO).
While employees may initially balk at higher deductibles, having an HSA can offset medical expenses. Many employers contribute a certain amount to HSA accounts. Add in employee contributions, and out-of-pocket costs are no longer as daunting. If the employee does not use the money in their HSA right away, they continue to amass more savings for future medical expenses. This option appeals to employees as their employer deducts less money each month toward health care costs and it allows them to save for their future health needs.
Because combining HDHPs with HSAs can save employers a significant sum over time, they must stress the benefits to their employees. Many employees are unaware that HSAs can follow them from job to job and that their contributions are tax-free. To learn more about HSAs and benefits solutions, contact us.
Group Supplemental Health (GAP) plans can help fill in the holes of high-deductible health plans (HDHPs). GAP insurance plans do not qualify under the Affordable Care Act (ACA) on their own. However, when combined with an HDHP that is ACA compliant they can help control costs. They are rising in popularity because HDHPs are often too expensive for not enough health coverage.
For example, many ACA compliant insurance plans have high deductibles averaging around $3000. Many individuals do not feel comfortable or are not capable of meeting that cost. Approximately 80% of people qualify for a subsidy under the Affordable Care Act to help mitigate the costs, but that leaves 20% of individuals who have to pay that cost out of pocket. Businesses must also handle these expenses on their own. As a result, businesses either raise deductibles to keep costs down or increase their employees’ out-of-pocket cost.
This is where GAP plans become a major player. GAP plans can provide coverage where HDHPs fall short or help pay deductible costs. GAP plans appeal to businesses in particular because it allows them to offer health insurance packages that ultimately cost less than if they only offered expensive plans with lower deductibles.
GAP plans also allow employees to customize their health insurance to meet their particular needs. Many employees view health insurance customization as a benefit, so GAP plans can help improve employee loyalty as well. To learn more about controlling insurance costs while improving employee health plan satisfaction, contact Chelten Consulting.
High 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.
With 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.
Most large employers currently offer HDHPs (high deductible health plans) in tandem with HSAs (health savings accounts). But traditional plans still play a major role in the employee benefits marketplace. Industry experts indicate that HDHPs should continue to grow in popularity, relevance, and effectiveness as long as targeted communications and transparency tools are put in place to aid employees in identifying and contextualizing the plans best suited to them.
According to a survey from the National Business Group on Health, large employers offering HDHPs with HSAs increased two percentage points in 2016, though the majority of them still offer traditional plans alongside. The 2016 HDHP minimum deductible is $1,300 per individual or $2,600 per family, while the maximum deductible is $6,550 per individual or $13,100 per family. Maximum total employer and employee HSA contributions for 2016 come in at $3,350/$6750.
With more people having to make decisions about when and where to receive healthcare services, the increasing prominence of transparency tools is both unsurprising and important. Future growth in this segment will be incumbent upon further improvement to the employee benefits communications and healthcare transparency systems implemented by employers, insurance providers, and healthcare professionals. To learn more about these and other crucial employee benefits issues, contact Chelten Consulting.