There is a lot of ammunition an employer can use to get employees to switch to or value a health savings account (HSA) paired with a high-deductible health care plan (HDHP), according to Justyn Harkin, a benefits communications specialist at Jellyvision, a provider of interactive software to help employees with benefits and financial decisions.
This health plan design will cost employees less in premiums, employees can keep HSA assets forever—there is no use-it-or-lose-it condition, HSA savings can be used to pay for health care expenses after retirement, and HSAs provide triple tax benefits, Harkin tells PLANSPONSOR. Bob Armour, chief marketing officer (CMO) at Jellyvision in Chicago, explains that contributions made to HSAs are tax-free, earnings on investments grow tax-free as long as they are used for medical expenses, and distributions to pay for medical expenses are tax-free. He adds that HSAs are portable.
However, while these are points employers can use to sell these plans to participants, once employees sign on, employers must also be on point with ongoing support, Armour says. Employers must make sure employees that have signed up for an HDHP with an HSA continue to realize the value of the benefit “because there are opportunities for profound disappointment” due to the change in the way employees pay for health care, Harkin adds.
A lot of times employees end up feeling their employers have taken benefits away from them or are being cheap.NEXT: Communicate at the time of need
For example, Armour shares, when an employee first goes to the pharmacy to pick up a prescription, they may be shocked to see it costs more than the co-pay they are used to paying with a previous health benefits plan. Employers need to explain that the HSA is being funded to pay for these expenses.
“We refer to that change as point-of-service perplexity,” Harkin says. Another example is when employees visit their doctor, and instead of having a co-pay, the doctor’s office will have to file with insurance first to know what the employee will pay. “Employees need to understand there is a change in the way they pay for health care, not a change in health care costs.” Harkin suggests employers offer transparency services for employees that tap into particular plan details and show which doctors or pharmacies charge less. An e-book offered by Jellyvision also mentions free comparison tools, such as goodrx.com.
Employees may experience another shock at the beginning of the year when HSA funds are not yet available. They should be reminded that they can pay themselves back when the funds are available, and to keep receipts so they can be reimbursed.
According to Harkin, employees may not know that preventive care is now covered at 100%. They should be informed of this and encouraged to seek preventive care, but also warned that if the doctor discovers something during a well-visit exam, the treatment for it will not be free. “What happens when people are thrust into a consumerist position and not informed, they shut down and do not get care. They may not go to the doctor until they feel they absolutely have to,” Harkin says. “Employers want people to feel they are covered so they can remain healthy and ready to work.”NEXT: Tips for communications
Armour and Harkin offer five tips for communications with employees about HDHPs with HSAs:
- Be simple, open, honest, and completely transparent and objective when introducing the HDHP/HSA option, Armour says. He notes that employees who use computer support tools, such as Jellyvision’s ALEX, find it fun and personable and do not feel employers are forcing them into an option they don’t understand.
- Start the communication about how things are going to be different right after they sign up, Armour adds. Do not just tell them they will pay less up front and can reimburse themselves for expenses later, be honest that they will see a radical change, as expenses will be more exposed to them.
- When the plan becomes effective, over-communicate about point-of-service-complexity and how to get reimbursed for expenses later. “Anticipate when employees may be surprised by costs, and make communications real to employees by properly describing and explaining scenarios,” Armour says.
- Continue to send reminders about how things are changed throughout the year. “Communication may not be valuable to an employee until he or she actually goes to the doctor or wants to get reimbursed for expenses, so continue the education throughout the year so employees can see it at their time of need,” Harkin says.
- Check with providers for communication resources. For example, according to Harkin, many have resources prepared about how to read an explanation of benefits (EOB) or how to prepare for the change in the way benefits are paid.