A high deductible health plan (HDHP) offers both employers and employees access to healthcare coverage at a reduced cost. When combined with health savings accounts (HSAs), high deductible plans can take care of most medical needs. So why aren’t your employees fans of your company’s HDHP?
It is clear that HDHPs aren’t the right choice for every company or employee. But when they are the right choice, they are a fantastic choice. Still, it is not unusual for enrollment in an HDHP to lag behind employer expectations. High deductible plans are sometimes a tough sell.
If your company’s HDHP has only received lukewarm reception, here are four possible reasons explaining why:
1. Fear of the Unknown
If your employees originally had access to a standard health plan prior to your offering the HDHP, the most likely reason they aren’t fans of the new option is fear of the unknown. We human beings have a natural tendency to fear new things because we don’t know all the details. This natural fear is made worse by the already complicated nature of health insurance.
Simply put, your workers already know and are comfortable with the traditional health plan. They don’t know anything about the HDHP and, if applicable, its associated HSA. They are not about to jump into murky waters when they cannot see what lies under the surface.
2. High Deductibles
As strange as it might sound, the very cornerstone of the HDHP – its high deductible – might be enough to scare employees away. The one thing they understand about HDHPs is that the plans cover very little until they reach deductible limits. And because most employees will never reach those limits via preventative and primary care, there is a perception that they are paying for nothing.
Employees who fear high deductibles have a valid point. At the same time, they aren’t thinking about the potential financial risks of experiencing a catastrophic health issue without having insurance in place. They do not realize that it’s a trade-off.
The good news is there is at least one thing employers can now offer to mitigate the concern. As explained by BenefitMall, a general agency based in Dallas, Congress recently extended the telehealth relief originally established in the 2020 CARES Act. This relief allows employers to offer first-dollar coverage for telehealth through any HSA-qualified HDHP.
3. HSA Ignorance
HDHPs work best when they are combined with an HSA. Unfortunately, HSAs remain a mystery to a lot of people. Employees may not know anything about your HSA, how it works, what it entails, and so forth. This lack of knowledge only clouds their understanding of the HDHP.
Educating employees about the tax advantages HSAs bring to the table could be enough to at least pique their interest in HDHPs. And once interest is piqued, a little bit of HDHP education could go a long way toward turning the tide.
4. Lack of an Employer Contribution
Finally, HSAs tend to work best when employers contribute to them. From the employee’s perspective, the HSA is one part of a two-part healthcare strategy. They believe employers should be contributing to HSAs just as much as HDHPs. For their part, employers can make regular contributions or just provide an initial lump sum to get the ball rolling.
HDHP are a less costly alternative to traditional group health insurance. They represent a way for both employers and employees to cover healthcare costs while still paying lower premiums. But not everyone is on board. If your employees aren’t big fans of your HDHP, you now have multiple reasons that could explain why.