Five years before the Affordable Care Act turned employer-sponsored health care on its head, Zions Bancorporation implemented a consumer-driven health plan. It was a huge undertaking, requiring years of consistent communication using a variety of media, to get employees to a point where they felt comfortable.
We were definitely an early adopter of the consumer-driven health plan, says Diana Andersen, executive vice president and HR benefits director for Zions Bancorporation, a financial services company with 11,000 employees that operates five full-service banking offices across 11 states. We realized early on that our employees needed to be part of the solution in managing our health care spend. The consumer-driven health plan design provided our employees with the ability to take on the smaller medical expenses in exchange for a huge reduction in insurance premiums.
Andersens efforts to rein in health care costs and educate employees about the true cost of health care have earned her the 2014 Benny Award for Benefits Leadership in Health Care.
In the early 2000s Andersen recognized the cost of the HMOs and PPOs were consistently increasing by 20% annually. These were not long-term, sustainable health plan options for employees or the company. She began to explore options that were affordable to employees and that could help the company stay competitive. Andersen was intrigued by Medicare Reform Act of 2003s introduction of health savings accounts and, at the same time, identified CDHPs as a cost effective option.
Just like anything new there was resistance, but what we did was focus on education and providing our employees with the tools to become better consumers of health care, she tells EBN. Another focus was implementation of health savings accounts.
By offering a consumer-driven health plan along with a health savings account, our employees are able to save money on a pretax basis and have the choice to use this money to pay for medical expenses when needed, Andersen says. This was the direction that we needed to go.
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To jump-start employee savings and help employees and their families deal with the health plan swap, senior leadership at Zions agreed to make company contributions to employees for the first two years after the CDHP implementation. Today, employee balances have grown to over $13 million, says Andersen.
Our employees continue to save money in their health savings account even though we stopped contributing a long time ago, she says.
As a result of Andersens efforts, Zions has been able to maintain a 4% cap on annual plan increases. In fact, for the past three years, premiums and deductibles for the CDHP plans have remained relatively flat.
The first step for any change is increasing communication, and Zions launched a grassroots campaign to educate employees.
There was a very concerted effort to make sure we communicated this, Andersen explains. The multipronged communication campaign included emails, print articles, telephonic and in-person meetings, as well as videos and webcasts featuring the companys CEO.
We dont have a lot of clients that are that forward-thinking, and can really embrace change, says Krystle Hilbig, west market exchange solutions leader with Mercer, which helped deploy the communication plan. Clearly today, everybody is looking at high-deductible health plans, and most people do have them, but Zions was all about it [before everybody].
Zions HR business partners and benefits team held meetings for the companys diverse and widely dispersed employee population, which is currently based in 11 western and southwestern states. Andersen personally conducted 90 such gatherings in the first year.
Zions also hosts an annual benefits fair that serves as a venue for continued consultation as employees sit down for their flu shot.
They are not afraid to get into the trenches and really address change head on, and I think that makes a huge difference in rolling these products out, says Hilbig, noting that Andersens focus on education was a driving force in the successful launch.
The ACA nonevent
Andersen says the ACA was a nonevent for Zions because the company had addressed many of the laws mandates long before it was even proposed by President Barack Obama.
An added bonus of rolling out the consumer-directed health care plan was that it prepared us for the Affordable Care Act, Andersen explains. Most of the mandates under the ACA were already in place with the consumer-driven health plan design that we offer our employees.
Zions already complies with other ACA provisions, which range from maintaining a 60% actuarial value, covering all the essential health, offering preventative care screenings, premiums that do not exceed 9.5% of an employees household income and health coverage to employees dependents up to age 26.
I know that there were other companies that were trying to implement this when we did, but they didnt have same success as we did, she notes. But again, its because we put forth a very concerted effort in education and communication.
