This is the fifth article in a 10-part series on successful open enrollment. Previous segments can be found here.
One of the challenges for benefits professionals during open enrollment is helping employees figure out the costs of health plans and the details of health savings and flexible spending accounts.
When presenting health options to the 300 employees of Maxx Properties, a real-estate management firm that oversees apartment buildings in eight states, benefit executive Amy Warycha has specific methods for assisting employees with their choices based on a cost-benefit analysis.
Maxx, through its broker HUB International, offers five medical plans from UnitedHealthcare; dental coverage from Aetna; and vision, life and supplemental coverage from MetLife. Employees choose between plans with varying deductibles, co-pays and physician networks.
The benefit analysis at Maxx begins by asking employees to fill out an online survey to determine their risk profile and help them examine their medical and insurance needs. Questions include:
· Are you a risk taker or are you conservative?
· How often do you go to the doctor?
· Do you have regular prescriptions and, if so, how much do they cost?
· How much money can come out of your paycheck before it affects your lifestyle?
· Do you prefer to pay upfront or pay a little bit as you go?
· Will you or a family member have a medical procedure that will require physical therapy and a lengthy hospital stay?
In addition to questions related to medical insurance, the Maxx survey also raises questions to help employees analyze their HSA and FSA needs. The company offers an HSA option to those who choose the health plan with the highest deductible. The other four health plans offered by MAXX Properties come with the option of using an FSA.
“The tax savings are 100% and they are easy to use. They give you a credit or debit card, and if you have a drug or doctor visit co-pay, it is a no brainer,” she says. As employees go through the HSA/FSA portion of the survey, they learn that HSAs can rollover from year to year, that money left in the FSA at the end of the year is non-refundable and non-transferable, and that there are times when these programs can come in particularly handy, such as when specialists prescribe therapies and medications that are outside their basic coverage.
And employees also are asked life-insurance and short-term-disability coverage questions, such as “If you passed away, could your family manage expenses without you?”
“You have to paint the worst case scenario picture for them,” Warycha says.
Another significant cost that employees need to carefully consider is deductibles and co-pays. “People tend to look at the premium alone and see what the cost will be for the coming year. But you need to lay it out and look at the hidden costs, which means the deductibles, the co-pays and the limitations on services,” she says.
Different plans have different limitations for therapy and rehab, Warycha notes. “If they go with the highest-priced plan, they may allow 50 physical therapy visits but the less expensive plans may offer only 25 physical therapy visits,” she says, adding, “That could be important to them.”
Many health plans are similar at first glance and the only differences often appear to be the deductibles and co-pays. This is why Maxx, during open enrollment, prompts staffers to view plans side-by-side and add up all of elements of each health plan to see the real cost. Employees can view the details online, and if their choice comes down to two possible plans, they can compare the details of each plan.
“It’s easy enough to look at the paper handouts and say that the cost of these two plans is significant so I will go with the base plan,” Warycha says. “But when you look at the hidden costs and the coverage, the plans might be more different than they appear.”
Coming Monday: Designing communications plans
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