Risk & Business Magazine Spectrum Insurance Magazine - Spring 2019 | Page 31
HEALTH PLANS
Employee behavior and lifestyle are
significant factors in health status—often
trumping genetics, the environment, or
access to care—and can have a huge impact
on the cost of health care. Employers—who
pay the majority of their employees’ health
care costs—have an enormous stake in
engaging their employees in their own
health care.
Studies have shown that behaviors can be
modified through the use of workplace
wellness programs. These programs
can motivate employees to eat healthier,
exercise more, and stop smoking—all of
which can help reduce future medical costs.
CDHPs encourage employees to take charge
of their own well-being and spend their
health dollars wisely.
HSA VS. HRA
Most employers offer CDHPs in
conjunction with a health care account.
These accounts take two forms: a health
savings account (HSA), which is opened
by the employee and can be funded by
both the employer and the employee; or a
health reimbursement arrangement (HRA),
which is owned and funded only by the
employer.
Both HSAs and HRAs are tax-advantaged.
For HRAs, employer contributions do
not have to be included in the employee’s
gross salary; therefore, contributions
are not taxed. For HSAs, the amount the
employee contributes is tax deductible and
not included in the employee’s gross wages.
Furthermore, interest earned in an HSA
account is not taxable. Unspent funds in
both types of accounts can be rolled over
from year to year. Most employers do not
make HRA accounts portable; however,
individuals participating in HSAs may
retain their accounts even if they leave
their employers.
Although both types of accounts are still
offered, HSAs seem to be edging out HRAs
in terms of popularity. Issues such as
portability, ownership, and contribution
flexibility can all be cited as possible
reasons for this shift.
employers contribute to their employees’
health plan accounts, although the
amounts they contribute can vary widely.
INCREASING THE SUCCESS OF YOUR
CDHP
The success of your CDHP is largely
dependent on clear, consistent
communication. Employees are often
skeptical to enroll in a CDHP for a
variety of reasons, including concerns
about higher out-of-pocket costs,
misinformation, lack of understanding,
or reluctance to switch from a traditional
plan that is comfortable and familiar.
In order to minimize these concerns,
employers should communicate early and
often and explain that CDHPs are meant
to help employees take control of their
health. Also, make sure to focus on the
lower monthly premiums associated with
CDHPs and the tax benefits of HSAs and
HRAs.
To achieve buy-in, communication
regarding health care consumerism
should resemble a marketing campaign
more than a typical HR information
campaign. Incorporate sufficient lead
time into communication efforts to
ensure maximum traction. Use a variety
of communication methods, such as
handouts, emails, videos, face-to-face
meetings, and presentations. Repeat key
messages to ensure sufficient exposure
and understanding.
In addition, employees need education
on how to use a CDHP, as these plans
differ significantly from traditional
health plans that employees are
familiar with. For example,
teach employees when it is
appropriate to go to the
doctor’s office, urgent care,
or the emergency room,
so they can reduce
their out-of-pocket
expenses. Other
beneficial topics
may include highlighting the benefits
of generic medications and the higher
costs and restrictions associated with
out-of-network care. This education
should begin during open enrollment
and continue throughout the year so your
employees can become smarter health care
consumers.
Having the right information regarding
CDHPs will give employers valuable
assistance in designing a plan and
effectively communicating it.
SURVEY EMPLOYEES
BEFORE IMPLEMENTING A
CDHP TO DISCOVER WHAT
CURRENT PERCEPTIONS
AND KNOWLEDGE ARE
SO YOU CAN TARGET
THE AREAS THAT NEED
CLARIFICATION.
In addition, resurveying employees
after implementation will provide
an assessment of where gaps in
understanding remain, how effective your
initial communication efforts were, and
how plan design and communications can
be modified for the future.
SUMMARY
CDHPs offer an intriguing option for long-
term improvement and cost savings—so
much so that many employers across the
nation either have already implemented
CDHPs or are considering doing so.
CONTRIBUTION LEVELS
In an effort to encourage employee
participation and engagement, some
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