Decoding high deductible health plans during enrollment

4 tactics to educate your employees about HDHPs

High deductible health plans (HDHP) can be scary for employees. For workers living paycheck to paycheck, it’s really difficult to see the upfront costs of a $4,000 family deductible as affordable.

Since more small businesses are offering HDHP’s as either a budget-friendly option or the only healthplan option, it’s critical that employees understand how to use them. Otherwise, there is a higher risk that your workers will put off medical care when they need it, because they don’t think they can afford it. And then this can lead to more problems such as lower productivity, higher absenteeism and an increase in on-the-job injuries.

Workers with high deductible plans still have difficulty affording their health care or have problems paying medical bills.

Source: Kaiser Family Foundation: Data Note: Americans’ Challenges with Health Care Costs, 2019.

Most employees need help in understanding how their HDHPs work, and how to get the most value out of them. And the reality of the ongoing health crisis has increased the stakes for workers and their families. With this in mind, here are four tactics that can help explain HDHPs to your employees during enrollment and an easy strategy that cushions the impact of high deductibles.

1. Use side-by-side comparisons

If your business offers two or more health plans (high deductibles and traditional deductible plans), create simple side-by-side comparisons that employees can easily understand. Helpful comparisons should include a sample of common health care needs, primary out-of-pocket costs and individuals covered:

Primary out-of-pocket costs

Premiums
Deductibles
Out-of-pocket maximums
Co-insurance after deductibles
Co-pays

Individuals covered

Employee only
Employee + spouse
Employee + dependent child

Common health treatments

Primary care physician visit
Maternity: hospital stay
ER visit
Outpatient surgery
Annual physical
Physical therapy

2. What preventative care covers

HDHPs usually cover preventative care at 100%, also called the wellness visit. But if the healthcare provider conducts another lab or treatment that isn’t covered under preventative care during the wellness visit, your employees could incur unexpected out-of-pocket expenses. For employees living paycheck to paycheck, this situation could make them feel like they’ve “gotten burned.”

To avoid a surprise bill and hard feelings, provide your employees with easy information about what is and isn’t covered for preventative care that they can easily refer to in the doctor’s office. For example, a paper postcard or a digital flyer.

3. Use real-life or fictional examples based on real-life situations

Identifying with other people with similar family or work lives can be a powerful way to explain how an HDHP works. Take advantage of this learning style by creating a few illustrations that are inspired by your workers’ demographics such as age, jobs, family member coverage and common health needs. Be sure that each example notes the standard out-of-pocket costs, including premiums, deductibles, co-insurance, co-pays and out-of-pocket maximums.

4. Link to a price estimator tool

Many employees will have specific health care concerns or prefer certain healthcare providers. A price estimator tool can help them get a good idea of what the costs could be at different providers. For example, an x-ray may cost $200 with one provider, while at another, it costs $1,500. Price-estimator tools are frequently used on health insurance websites.

You can ask your major medical insurance provider if it can provide an easy price estimator tool during enrollment.

While these tactics can be helpful for employees in understanding how their HDHPs work, the initial payments towards the deductible could still cause budget-conscious employees to worry about the costs. You can cushion the financial impact of your employee’s high deductible with voluntary benefits.

62% of HR experts agree that employees who have difficulty affording out-of-pocket health-plan costs could be more likely to report an off-the-job injury as a workplace injury.

Source: IMPA-HR, Impact of Employee Out-of-Pocket Health Plan Costs on Report Workplace Accidents, 2019.

Voluntary benefits 101

Strengthen your business with our quick start guide on voluntary benefits and build a well-rounded benefits package that helps attract and retain skilled workers.

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Voluntary benefits offer easy affordability

Voluntary benefits offer workers an affordable and easy way to pay for the high deductibles, co-insurance and co-pays in a HDHP. And when employees believe their out-of-pocket expenses for health care are affordable, they’re more likely to seek medical care when they need it, rather than putting it off. The bonus for small businesses is that employees who use their benefits are more likely to value them.

Good voluntary benefits options to consider supplementing your HDHP include accident, critical illness and hospital confinement insurance. Many budget-conscious workers find the premiums for two or more of these voluntary benefits very affordable.

How does accident coverage work in real life? Here is an example.

Here is an example of how accident coverage would work in real life: One Sunday afternoon, your employee is in the garage, putting away some equipment when he slips and falls off his ladder, and hits his head on the concrete floor and possibly fracturing his ankle. In this example, this employee goes to the ER, has x-rays, an MRI, bandages and medication that day and over the next several weeks, he will have follow-up doctor visits and x-rays. An accident policy could help pay for the deductible, co-insurance, co-pays and travel expenses his HDHP didn’t cover.

When offering voluntary benefits and if your budget allows, consider contributing a fixed monthly amount to your employees’ premiums. A monthly contribution of just $25 or $50 can both encourage enrollment and build goodwill.

Small businesses have always had to find smart ways to provide employee benefits with limited resources. But given the ongoing heath crisis and uncertain economy, it’s even more important to support your employees with information, so they can be confident that they can afford their medical care when they need it.