Thanks to ever-increasing employee health insurance expenses, employers across the nation are hopping onboard the high deductible health plan bandwagon at breakneck speed. Before you join them, however, there are a few things you need to know.
While opting to offer only high deductible plans may save you money, you may wind up with an unhappy workforce drowning in burdensome medical bills, stressed out over financial worries, or worse–succumbing to illness after foregoing costly medical care. Yes, before choosing the HDHP, make sure you determine whether or not it will really benefit your employees.
The most loudly lauded benefit of the HDHP is its lower monthly premium, making it much more affordable for lower income employees. These plans are often attractive to young healthy people because they can avoid paying for benefits that they don’t use. An individual who seeks a physician’s attention for simple issues like an ear infection or the flu can receive treatment for a manageable price, meaning that employees who expect to make minimal use of the medical system can save quite a wad of cash.
These plans also appeal to the avid comparison shopper who likes to have control over their care and the costs associated with it. Employers are increasingly choosing HDHPs as a way to put their employees in the driver’s seat to help manage costs together, making them consumers who will use fewer services and become more prudent purchasers since they bear more financial responsibility for their consumption. Take-charge employees may be attracted to this type of plan.
Risk of High Expenses
If your employees cannot afford to fork out a high deductible and, in many cases, a sizeable co-payment, these plans could lead to their financial ruination. In order to avoid a fiscal catastrophe, they will have to sock away a nice chunk of change into their health savings account in case an emergency should arise. If they are living paycheck to paycheck, however, contributing to a health savings account may not be possible.
Savings Trumps Health
Due to the high cost associated with medical treatment, many high deductible health plan-holders forego medical treatment in order to avoid forking out the hefty deductible and large co-pays. Unfortunately, by safeguarding their finances, many wind up sacrificing their health. A study conducted by the American Medical Association yielded startling results, revealing that 43% of high-income families have put off or forgone care due to the expense.
Comparison Shopping Flaws
No matter how diligently you conduct research and comparison shop, you may still find yourself saddled with an over-the-top, bank account-busting expense. For one thing, there are often no guarantees that a quoted price is binding. Plus, as The New York Times‘ “High Health Plan Deductibles Weigh Down More Employees” warns, your employee could pick an in-network gastroenterologist for a colonoscopy, but if they didn’t know they needed to have a biopsy, they could later learn that the lab or pathologist were outside of their plan’s network.”
Plus, it is impossible to predict everything that can go wrong with one’s health. A sudden illness or accident will likely render your employee incapable of tracking down the best deals on the health care products that they urgently require. As a result, they could wind up paying top dollar.
Employees who opt for a high deductible health plan must be prepared to utilize health care professionals and services that fall within the plan’s network of providers. A common gripe among these policy holders is that there are insufficient health providers within many networks to handle the volume of patients. If your business is located in a small community, this issue will likely be even more problematic.
The fact is that the viability of a high deductible health plan greatly depends on the age and overall health of your employees and their financial wherewithal to withstand sizeable deductibles and co-pays. If your workforce contains a high number of older individuals or people with chronic conditions, they will likely have to shop elsewhere for a more suitable plan. And, if this is the only option you present them with, you may find a big percentage of your staff declining an employer health plan completely.
You must also bear in mind that a healthy and happy workforce is likely to be considerably more productive. Plus, you do not want to lose your star employees to a company that is willing to provide them with a more attractive option–and this does happen. According to US News & World Report ‘s “Should You Roll the Dice on a High-Deductible Health Plan?,” upon discovering that her HDHP did not cover her infant’s pediatric services, one employee left her employer in favor of one that offered a low-deductible plan with small co-pays. And she is, by no means, alone. If you stand to lose workers by solely providing a high deductible employee health plan, you will need to factor in the costs of acquiring and training new hires into your decision.
Remember, your business is only as strong–and healthy–as the people within it.
If you’d like to learn more about high deductible health plans and how American workers feel about them, you will definitely want to check out “More Than 4 in 10 Americans Prefer High-Deductible Health Insurance Plans.”