Studies show that most of your employees would save a significant amount of money by enrolling in a consumer driven health plan (CDHP). However, the majority of them will avoid this option at your next open enrollment because they’re unfamiliar with how CDHPs work and fear experiencing an economic loss. Their cognitive biases will ultimately cause them to miss out on more affordable (but still high-quality) health care and make your job of promoting these plans much harder. So, how do you get employees to move past these often irrational hurdles and consider electing what can be a financial win for both them and your company?
Here are 5 ways to increase participation in CDHPs:
Require active enrollment
If you give your employees the option to passively carry their existing benefits over to the following year, they will -- even if better insurance plans are being offered. That’s because it’s easy, and like most people, when faced with complex decisions, most employees will just avoid making a decision altogether. However, if you require them to actively sign up during every open enrollment, they will be forced to look at what’s available and make a choice. Sure, they may still choose to keep their current plan, but at least you have the opportunity to engage them.
Optimize your benefits design
If you want to increase participation in your CDHP, you need to make it stand out as the clear winner among the available options. The language you use and how you present the plan will play a role in how your employees perceive it. In order to frame the plan in the best possible light, consult with your benefits consultant or broker to determine things like: what to name the different plan choices, how to phrase plan descriptions, and what order to list the plans in your benefits materials. Believe it or not, all of these little details really matter when it comes to the value your employees will assign to each available option.
Have a clear and consistent message
As you craft your benefits communication strategy, be sure that every party involved is on the same page and truly understands the value of CDHPs. Your benefits consultant or broker, HR and Benefits team, HSA partner, and retirement plan recordkeeper should provide consistent benefits messaging across all platforms. As a united team, decide how each member can help support the goal of increasing CDHP enrollment. For example, your benefits consultant or broker can provide pointed educational materials for distribution, and both your HSA partner and 401(k) administrator can offer easy-to-use planning tools that highlight the CDHP.
Pro Tip: Consider providing at least basic CDHP training to managers so that they can effectively answer common employee questions. This shifts some of the burden off of the HR and Benefits team and gets more people talking about the plan.
Have an enticing HSA funding approach
First and foremost, if at all possible, your firm should contribute to employee HSA accounts. Picwell’s research and experience shows that doing so increases the CDHP participation rate because it makes the plan option more valuable. However, many of your employees may still shy away from it because they’re afraid that they will need expensive health care before their HSA account can cover it. There are a few different techniques you can employ to build up their account balances and assuage their fears:
- Pre-fund their accounts: At the beginning of the year, deposit a lump sum contribution to jump start their savings. You can opt to deposit the full employer contribution at once or make multiple deposits at predetermined intervals throughout the year.
- Match their contributions: If the firm needs to preserve cash flow, spread out the expense by matching employee contributions each pay period. This encourages employees to save and, as an added benefit, higher employee HSA contributions reduce your company’s payroll tax liability.
- Combine pre-funding and matching: To get the best of both worlds, deposit a smaller lump sum into their accounts at the beginning of the year, and then provide a smaller match on each subsequent pay day.
- Offer an HSA advance: Partner with an HSA Administrator that allows employees to receive an HSA funds advance. That way, they can use their account to cover medical expenses before contributions are actually made and repay what they’ve borrowed over time.
Offer and promote a decision support tool
While educational materials, benefits meetings, and calculator widgets can help employees make benefits decisions, they can only go so far. Cutting through any remaining confusion, a sophisticated decision support tool can make the correct choice the obvious choice. The tool will ultimately highlight the most appropriate plan option -- the best balance of total cost and risk protection - and many times this will turn out to be a CDHP. In fact, in Picwell’s experience, we find that CDHPs are often the best option.
To get the most out of the decision support tool, allow employees to access it as soon as possible. This will ensure that they have ample time to explore it and aren’t left scrambling at the end of open enrollment. Promote usage by showcasing the tool in all benefits education materials and consider offering special training sessions specifically to acquaint employees with its capabilities. In addition, invite employees to show the decision support tool to their spouses and dependents to make the benefits selection process a family affair.
CDHPs are a great solution for most of your workforce -- they just need a little help seeing that. By implementing the techniques discussed above, chances are good that your company’s CDHP participation rate will increase. When that happens, both your firm and your employees can enjoy better financial health.