Why Employers Offer a HDHP

Why Employers Offer a HDHP

benef592752jwwwj Uncategorized

According to the Centers for Disease Control, the number of employees participating in High Deductible Health Plans (HDHP) increased almost 300% in the 10 years between 2007 and 2017. Two types of employees are most apt to perceive the benefit of being offered an HDHP as part of their total compensation package. One group is relatively healthy, young participants and the second is employees who can predict and plan for their yearly healthcare costs.

The Benefits of HDHPs (High Deductible Health Plans)

HDHPs are also known as “consumer directed” health plans. In order to be considered a HDHP, the deductible must be a minimum of $1400 for the employee. With that in mind, savvy employers opt to fund part or all the deductible for employees via a tax-exempt account to cover out-of-pocket costs.

A Health Savings Account (HSA) The HSA and its available funds are controlled by the employee and is in the employee’s name. It also allows the employee to roll-over their unused (pre-tax) employer-deposited funds into the next plan year.

An alternate offering would be a Health Reimbursement Arrangement (HRA), which usually does not roll-over into the next plan year for use by the employee. In this case, the account containing the funds is controlled by the employing company.

Employers Benefit From High Deductible Health Plans

When employees don’t use all of the HDHP HSA funding that the employer has made available to reimburse for medical expenses, the company comes in under budget. When employees do use their HDHP funding, the company then has that cost data available for budgeting next year. In this way employers may be able to mitigate risk as they look ahead.

Employees Enjoy Employer-Paid Deductibles in HDHPs

In these uncertain times of COVID19 and its accompanying employment challenges, employees want to cling to the security they feel with their traditional employer-funded health insurance plan. It is imperative that the employer communicate clearly and effectively with their employees so that they understand the benefits of the HDHP. A trusted benefits advisor like benefEx can handle this communication on behalf of the employer. This is an opportunity to gain important staff buy-in around the company’s total compensation package. Building rapport may go a long way!

Some of the ways to sensitively help employees see the value in your High Deductible Health Plan include:

  • Reiterating that preventive care is covered, in most cases 100%, under the parameters of an HDHP. There will be no extra stress surrounding maintaining (or improving) good preventive habits they’ve established for themselves over the years.
  • Helping employees calculate their figures, giving them their own healthcare spending costs from past years. Plugging numbers into online calculators, or an active form could achieve this.
  • Enabling, encouraging, or requiring your Human Resources and Management staff to talk about the company’s total compensation package with their staff and the benefit of the HDHP to the employee.

How benefEx Can Help

Contact benefEx to discuss how to roll-out a new High Deductible Health Plan, and how to design the plan that best serves your company’s particular needs. We’re here to provide you with trusted and reliable guidance so you can make the best decisions for your business!