Due to all of the changes we’ve seen over the course of the last decade when it comes to workplace healthcare costs, it’s no surprise that employers are exploring every possibility they have available to them in order to try and save funds. One such possibility is to adopt High Deductible Health Plans (HDHPs). These plans can help reduce the amount of premiums paid for both employers and employees. The risky part about these plans is that fewer employees might enroll in them than an employer anticipated, or an employee might simply not understand their HDHP and therefore not get everything out of it that they could be getting.
HDHPs can be a good choice for some businesses, but they certainly aren’t right for everyone. One great scenario would be for an employer who is already overpaying for their healthcare plans to utilize an HDHP, because this way they could potentially get much more out of their plans than they currently are. Below we have listed some common issues to try and avoid if you make the decision to transition to an HDHP plan for your business.
Not Understanding the Details of an HDHP
For most employees, the costs of HDHPs are surprising, especially if they are used to paying their co-pay for most of their working lives. The actual costs of healthcare services tend to be much higher than they actually realize. However, in the end, employees can possibly end up saving money if they have a firm grasp of how their plans work – despite the fact that it might seem like an HDHP is more expensive on the surface. This is why it’s so important for the employee to educate themselves, and for the employer to have a system in place to educate the employees on their new HDHP plans.
Net Cost and Overblown Risk Assessment
The high costs of HDHP tend to be what employees mainly focus on when it comes to making this sort of workplace healthcare transition. What these employees fail to recognize, however, is that the majority of those who have health insurance will not reach their deductible for a given plan year or their out-of-pocket expenses. Some employees do, if they have a chronic illness or need surgery, for example. However, it is important to remind employees that most insured individuals do not meet their deductibles.
Some Employers Don’t Contribute Enough
One of the crucial aspects of ensuring that HDHPs are successful in the workplace and that employees are satisfied with them is for an employer to open an account to help contribute to them. These accounts are usually in the form of flexible spending accounts, also known as flexible spending accounts. Unfortunately, there are some employers who don’t contribute enough to FSAs that they set up for their employees, which in turn will cause dissatisfaction in the employee.
If you have any more questions about what to avoid when it comes to your high deductible healthcare plan, and how HDHPs relate to medical-stop loss insurance, feel free to give us a call here at Prodigy. We would be happy to help you.