HSA-qualified high deductible health plans (HDHPs) allow employers to trim costs while offering employees protection from substantial medical expenses. And employees typically have the chance to save money too through lower monthly premiums and HSA tax savings (provided an employee has the available funds to make contributions).
However, getting employees to make the switch from a traditional health plan to an HDHP isn’t always easy. Too often, employees see the “high deductible” plan name and stick with their more familiar plan, even if they’re over-insured and paying higher monthly premiums for it.
Here’s how Lane Health helped a Midwest manufacturer solve this problem:
The situation:
This company has more than 3,000 employees, many of whom are modestly compensated. Prior to becoming a Lane Health client, the company had offered three health plan choices: two traditional PPOs and one HSA-qualified HDHP. Lack of understanding around the HDHP, combined with inadequate understanding of how HSAs could help their specific circumstances, led to only 4% of eligible employees choosing the HDHP.
The company hoped to boost HDHP enrollment to reduce costs for their employees and themselves and chose Lane Health to help.
The solution:
Working with this company’s benefits consultant, Lane Health addressed this problem in a three-pronged approach, focusing on plan design, employee education, and a robust HSA offering.
Plan design:
The company revamped their health plan offering to include one traditional PPO and two HSA-qualified HDHPs, a “low” and a “high” option. By helping employees ease into an HDHP, this plan design helped reduce employee uncertainty and enabled them to find the level of insurance that provided sufficient coverage without over-insuring.
Employee education:
Helping employees understand the holistic coverage and cost of their health plan options is essential to them making informed choices on which plan best fits them. Lane Health developed a plan comparison tool, customized for the company’s specific plan design, that employees could use to project which health plan might be the right choice for them based on their expected medical usage. Thanks to the tool, employees were empowered to make data-informed decisions instead of simply choosing what felt familiar.
HSA offering:
The typical HSA solution works well for those who are able to contribute and save but doesn’t offer real value for modestly compensated employees who may not be able to afford their healthcare bills. As a result, those employees might forego or delay necessary care because they don’t have a simple way to pay.
However, with the Lane Health HSA, that all changes. Through the Lane Health HSA, employees have access to a line of credit¹ that, once activated, provides on-demand access to additional funds¹ to pay for their medical expenses up to their credit limit. And the best part is, because funds and fees are repaid through pre-tax payroll withholding, employees typically save money compared to if they’d paid with cash².
With the Lane Health HSA, employees could now feel confidence enrolling in the HSA-qualified HDHP, knowing they can have swipe-and-go access to additional funds¹ in the case of an unexpected healthcare bill.
The result:
Thanks to this multi-pronged solution, 42% of eligible employees enrolled in an HDHP in the next plan year (a staggering 10x increase in HDHP enrollees over the previous year). Now, so many more employees are making informed health decisions and are armed with the tools they deserve to make their healthcare work for them.
If your client is struggling to move the needle on their HDHP enrollment, we’d be glad to work with you to put together a robust and comprehensive plan that will help everyone win. Simply drop us a line, and we’ll be happy to help.
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¹ Advances issued by WebBank
² Savings based on 7.65% payroll taxes and 12.35% combined federal/state tax rate minus associated fees paid pre-tax; savings will vary depending on individual tax situations
