Say the term "high-deductible health plan" these days and many employees assume the worst. They fear their company is adopting a low-quality medical plan, that they will bear huge health care costs burdens and that the plan will require exacting recordkeeping by the workers.
None of this is true. But reversing employee perceptions takes more than a mention during open enrollment.
We know first hand. At OGE Energy, we adopted a high-deductible health plan with accompanying health savings account in January 2012. Many employees were skeptical at first.
But after working with our provider, Fidelity Investments, we developed a comprehensive education campaign about the merits of HSAs. The result: A whopping 28% of the 3,000 employees who participate in our health plans were convinced to enroll in our high-deductible HSA plan in its first year. Nationwide, many companies see only a 6% to 10% enrollment rate during the first year.
Making the case
For more than 50 years, OGE - Oklahoma's largest utility - provided medical coverage to its retirees. That legacy changed in 2000 when we felt compelled to freeze the plan to new employees due to the rising costs of health care. Last year, faced with an aging workforce and a growing liability on our balance sheet of expected future benefit payments, we placed a cap on future benefit increases.
We needed our employees to take additional responsibility in planning for their retirement. Future retirees will be responsible for paying for their own health care expenses once they retire from OGE. As part of this new approach, we began offering a new high-deductible medical plan with an accompanying HSA. To support the new plan, we offered a $1,000 annual contribution to families and a $500 contribution for individuals to help grow their HSA savings.
There were plenty of questions during open enrollment last fall. But the education campaign made it easy to engage and support our employees. We use an online HSA modeler, created by our provider, to demonstrate the tax and savings advantages of the HSA. The modeler - available on our intranet benefits website - estimated out-of-pocket costs for employees depending on the health plan they chose. It projected the accumulated HSA savings amount for an employee over the course of 30 years based on certain contributions (i.e., if an individual saves $3,100 in 2012, that savings could grow to $180,817 in 30 years with a 4% expected rate of return).
We produced an eight-minute tutorial video to explain how HSAs define qualified medical expenses (i.e., prescription drugs) and how participants can access the money (i.e., debit cards, check).
We conducted webinars and onsite employee meetings. We mailed brochures and sent informational emails.
Our work paid off. Of the 846 participants enrolled in the new high-deductible plan, 82% (about 693) are contributing their own money to their health savings accounts.
On average, single workers have indicated they will contribute about $1,500 this year, and families will contribute about $2,600. When the employee contributions are combined with the company's annual contributions ($1,000 for families and $500 for individuals), more than one-in-10 participants (13%) are saving the IRS allowable maximum contribution for 2012 ($3,100 for individuals and $6,250 for families).
These funds are portable, so employees can take the dollars accumulated over time with them if they ever leave or retire from the company.
High-deductible health plans with HSAs can be a tough sell to employees if they aren't given a thorough explanation about the advantages of the plans, which include lower employee contributions and employer seed money to jump start HSA savings.
For OGE, a multimedia educational approach to plan adoption that included an HSA modeler, an explanatory video, webinars and onsite employee meetings was the strategy that resulted in high engagement.
Margaret Walsh is director of benefits with Oklahoma Gas & Electric.
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