HSAs contribute to wiser choices and lower costs

Client: Professional Services Firm

Situation Analysis:

• No cost or utilization controls
  Three health plans offered: $250 deductible, a $1,000 deductible, and a $1,500 deductible HSA. Most chose the $1,000 deductible; however, there were a number of employees in the lowest deductible, which put the most risk on the plan as opposed to the member. There was no incentive to move to the HSA plan.
• Low participation
  Only 63 percent of the total eligible employees participated in the plan due to high premium rates and high cost to employees. Younger associates were choosing to waive coverage through the company and purchase less costly individual policies. The plan was being adversely selected against and not enough premium dollars were flowing through the plan to offset claim costs.
• Ineffective communications
  The consultant at the time was not expert in the communication and marketing aspects of program design and left it to the client to manage. The firm simply didn’t have the time, experience, or depth of knowledge to maximize the opportunity.
  

Strategy:

Marketing the benefit plan more effectively and increase participation to make the plan healthier and self-sustaining.

Tactics:

• Benefit Associates changed the plan design, implementing two HSA plans (a $1,500 and a $2,500 deductible) with a third high-deductible PPO plan.
• The firm contributed more money to the health plan, reallocating dollars from other programs.
• The firm made HSA contributions to anyone electing that plan--- $1,000 for individuals, $2,000 for families.
• Communication strategies were enhanced, both through employee meetings and with online tools.

Results:

• More reasonable premiums and a more effective marketing message to members.
• Greater acceptance of reduced payroll contributions on both the individual and family level.
• Both participation and loss ratios have improved throughout the first year. The 2007 renewal was of minor consequence (3 percent vs. 25 percent in the previous year) and thus no changes in plan were required.