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Why HDHPs are so hard, and the "magic formula" your benefits team needs

Understanding the notorious HDHP, and the two things your benefits team needs to get it right.

Sophia Lee
By Sophia Lee on May 24, 2018

Sophia is on the communications team at Amino, where she helps share industry perspectives. Connect with Sophia Lee on LinkedIn

Risky. Confusing. Disappointing.

These are some of the characteristics commonly associated with high deductible health plans (HDHPs), according to a survey by Jellyvision and Harris Poll. This is an unfortunate reality given that HDHPs, especially those that are HSA qualified, are becoming increasingly popular: HDHP enrollment has grown from just 4% in 2006 to 29% in recent years.

Before we dive into the "magic formula" to make the transition to an HDHP a little more painless for your employees, let's address an important question: why are HDHPs so hard in the first place? 

The problem with HDHPs

When it comes to the HDHP, the main issue seems to be perceptions and sentiment, rather than the plan itself. Here are two common obstacles that surface when HDHPs are rolled out at companies:
  • Employees are unfamiliar with this type of plan. Many employees have never had a HDHP before, which means they likely haven't learned or been taught the ins and outs of this new plan. They may not be aware of important features, such as what their new health savings account (HSA) is, or the fact that they still have access to free preventive services. They will probably be unpleasantly surprised when they go to their first few doctor's visits and are hit with the full bill for their care. 
  • It puts more burden on the employees. Higher deductibles mean more financial responsibility on the employee. This is supposed to encourage people to shop around for care in an effort to save money, but research shows that this isn't actually happening. In fact, employees on HDHPs are twice as likely to delay or forgo medical care as those on a PPO. 

With these problems, it's natural that employees might perceive HDHPs in a negative way. That's where the two-part "magic formula" comes in.

Ok... we'll be honest. The formula isn't that magical — it's actually pretty straightforward. But what we've seen is that most companies tend to emphasize one aspect of the formula over the other, or use tired tactics that have been proven time and time again to be ineffective. But when executed on in a balanced and forward-thinking way, which we're going to help you do, we promise the formula does deliver magical results. Let's break down the two parts:

The first piece: clear education 

Did you roll your eyes a bit?

We know. As a benefits manager, you constantly hear about the importance of employee education. You may be tired of receiving this particular piece of advice — especially since you likely already have a robust education program in place. But is it working? Do your employees really understand their health plan?

In an upcoming post, we're going to approach education in a different way. We'll break down four different common employee personas and give you a sneak peek into their mindset, pain points, and communication preferences. We'll also tie these personas to specific education tips that we've sourced from some of the top benefits leaders in the space, so you can trust they're coming from a credible source.

The second piece: innovative partners and tools

This is frequently the missing piece of the "magic formula." While crystal-clear education is absolutely key, it's putting the education into action that brings results. However, without the right types of partners, tools, and resources in place, you're setting your employees and yourself up for failure.

In the next few days, we'll publish a post that gives you a glimpse into the types of partners and tools that may be invaluable to you throughout the HDHP journey. We'll also share a list of questions to vet whether or not a specific vendor is the right fit for you and your organization. If you don't want to wait and need all of this information (and more) right now, you can download our guide below.

It's hard to deny that implementing an HDHP is a challenging endeavor. But this shouldn't be the reason why your employees end up hating the benefits package you worked so hard to put together. With the right formula, tactics, and execution in place, even the notorious HDHP can become a plan that your employees love.   

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