A recent Employee Benefit News article, Many Employees Need Help Picking the Best Health Plan, put some clarity around what we’ve long suspected by sharing details of an Employee Benefit Research Institute study. The study found that nearly half of polled employees consider choice of health plan extremely important, and 36% rate it as very important.
We know plan choice is good. But it’s not enough: the same study found that one-fifth of employees are not confident they can make the best plan choice. Health plan choice during open enrollment can and should be a great experience for employers and employees. As an employer, you’re enabling your employees to enroll in the “right” plans for their healthcare needs, and that’s a real opportunity for both of you to save money: When fewer of your employees over-insure themselves, your healthcare contributions will be reduced as well.
Unfortunately, it’s not that simple. Despite the time and effort you put into providing plan choices, if you’re offering them without a decision support tool, you’re only creating an opportunity for change. Health plan choice can only reach its full potential when employees pick the best plan for their needs. But according to Aflac’s 2014 Open Enrollment Survey, 90% of American workers choose the same benefits year after year, and 64% say they rarely or never understand the changes in their benefit coverage.
So what’s so hard about forecasting healthcare needs and selecting the best plan? Actually, it’s pretty complicated. Before making an informed decision, employees must consider how much they spent on healthcare in the past, the health status of their family members and costs of any expected treatments or surgeries, and whether they’ll be adding or subtracting any dependents. Their next important step would be to apply their cost forecast against each of the plan options, which includes answering these questions:
- What will your paycheck premiums total for the year?
- How much will you pay out-of-pocket before your deductible? How about after your deductible and up to your out-of-pocket maximum?
- In case you underestimated your healthcare needs, what’s your out-of-pocket maximum?
And we’re not done. High deductible health plans (HDHPs) and the spending accounts (e.g., HSAs, FSAs) that often accompany them add yet another layer of complexity. How will your employees know how much to contribute?
With all they need to know, can we really expect the average consumer to choose the right plan without help and guidance? The answer is absolutely not. Without guidance, your employees are likely to feel confused and frustrated, and believe that you’re passing more healthcare expenses on to them. Employee discontent with the health benefits and open enrollment can lead to job dissatisfaction and lower morale. And open enrollment confusion can burden your human resources staff. In a 2014 survey of human resources executives, nearly half (47%) said that educating employees about health benefits is the most difficult aspect of open enrollment.*
The good news is there are consumer web tools that do this heavy lifting, helping employees forecast their healthcare spending by providing a personalized experience and then recommending the best plan to meet their needs.
The best of these decision support tools combine an employee’s own historical claims data with a robust, time-tested health care claims database to estimate the cost of conditions or future treatments that are geographically relevant to the employee.
Plan choice is a great thing, but choice without decision support is a missed opportunity and may actually create employee dissatisfaction. This fall, make the most of the choices you offer your employees by pairing open enrollment with a great enrollment tool.
Senior Director, Product Management
*Keas 2014 HR Executive Survey – Full Report.