Empowering employees to design their own health plan

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As a benefits consultant, much of the consultation my team and I provide to employers focuses on health plan design. Usually, representatives from our client’s HR and finance departments consult with us and make the final decisions. Sometimes, the resulting plan design recommendations are presented to various committees, including employee committees, executive teams and/or the board of directors, for approval.

However, it is rare for these committees to object to the recommendations. It’s rarer still for these committees to study and evaluate the plan design beyond the scope of the recommendations.

A client that recently took a radically different approach is Janet McNichol, the human resources director at the American Speech-Hearing-Language Association. Historically, McNichol, my team and I benchmarked ASHA’s plans, identified areas of focus and presented the budget impact to ASHA’s CFO and COO for review. However, leading up to the 2019 plan year, in order to facilitate the redesign of ASHA’s in-network only plan, Janet invited all of ASHA’s staff to participate in small group discussions, involving a benefits builder board game Janet designed. Here’s a look at the game board.

As shown, the board contains 72 dots or chips. For example, it costs 12 chips to purchase better hospitalization and surgery benefits (10 chips for good + two chips to upgrade to better). However, participants were only given 55 total chips to spend, with the option to buy more chips by reducing his or her salary. In other words, the 55 chips represented ASHA’s budgeted cost for this plan.

Using the game board, participating employees first designed the new ASHA Signature Plan based upon his or her individual preferences. Then, participants collaborated within their small groups to reach agreement on the final plan design, balancing the wants and needs of the group with the scarcity of the 55 chips. Importantly, the groups had to arrive at complete consensus; they couldn’t, for example, hold a vote. The cumulative selections were used to set the ASHA Signature plan design for 2019.

Following is a Q&A with Janet about the process, results and takeaways:

What did your plan design look like before this initiative?

McNichol: We offered three plans: a traditional PPO, a HDHP and a network-only plan with essentially the same benefit design. Our plans only varied by provider choice and the deductible. Our goal was to use a collaborative process to redesign the network-only plan together as a low cost, low cost share alternative. We call the new plan we designed together the ASHA Signature Plan.

How did you come up with the idea to gamify this process?

McNichol: To decide together what to include in a health plan, it is critical that participants develop an understanding of each issue that is informed by the views of the other participants. This understanding can only be achieved when people talk with one another, listen and empathize. Board games encourage conversation, turn taking and playing fair. These social conditions are an important part of the deliberative process.

We understand that employees initially designed the plan based upon their preferences and then collaborated within the small group to build consensus on the design. How did the resulting collective preferences compare to the initial individual preferences?

McNichol: As employees discussed their healthcare needs and preferences in a group setting, individuals were willing to accept less robust coverage in certain areas of care, such as dental, vision and diagnostic benefits, so that the broader group could have access to more comprehensive mental health and maternity services.

Tell us about this consensus building process. Were employees able to successfully come to a consensus without holding a vote?

McNichol: In the beginning, people’s views varied greatly based on their own experiences and what they think is important to the ASHA culture. The first step to reconciling these differences was to make them visible. I was pleased to see how the groups engaged everyone at the table and demonstrated curiosity and patience with thoughts that did not represent the majority perspective.

After this divergent or exploratory phase, most groups got stuck. A number of groups discussed voting at this point. I asked them one question if they seemed to be seriously considering it, “when you vote, who loses?” In every instance, someone answered, “the minority,” and they abandoned voting. Instead they kept listening and asking one another questions until they developed a shared framework of understanding and started to see the way forward. You could see the pace of the discussion accelerate at this point.

Did any of the decisions collectively made by the small groups surprise you?

McNichol: No. I was not particularly surprised by any of the plans the groups designed. I went into this more interested in the process than in the outcome, to be honest.

Was there any interest individually and/or at the group level to reduce salary levels in order to increase benefits (i.e., buy more chips)?

McNichol: Yes, in both instances. At the individual level, the average amount more they were willing to pay was $38 a month. However, regression results revealed that the probability of any willingness to pay, or the actual dollar amount itself, was not systematically related to any demographic or distance variable. This means we cannot make inferences about what groups of people are more willing to trade salary for a richer benefits package, as they are roughly equally likely to do so. This could be unique to the ASHA employee group, as their benefits package is relatively rich and our employees are mostly professional.

During the exercise, we gave participants the option of purchasing an additional chip. This required that every member of the staff give up $300 in a future salary increase. A subset of participants showed a willingness to pay for more services; the amount ($19.08/month) was below what was required to purchase additional services ($25/month to add up to $300/year for a single chip). People seemed very reluctant to commit money they saw as belonging to a colleague even if they were willing to pay for it themselves.

What happened during the ensuing open enrollment? Was there significant migration into the new ASHA Signature Plan?

McNichol: Enrollment in the new ASHA Signature Plan was comparable to the enrollment in the network-only plan it replaced. Enrollment in the high deductible health plan increased by 10%. You can see the changes people made during open enrollment in the healthcare benefits builder.

In February, we fielded a staff survey. We asked people how well they understand their health insurance. People who participated in a benefit builder session were more likely to say they have a high understanding of their health insurance. It could be that this greater understanding gave people the confidence to enroll in a high deductible health plan. This was an unexpected outcome.

It’s also worth sharing how our staff accepted the limitations in the ASHA Signature Plan; there was absolutely no complaining, no noise at all.

What have been the benefits to your organization from this process? Were there any downsides?

McNichol: The only downside is that our staff would like me to facilitate similar sessions to get their input on all kinds of benefit and HR issues now. I’m happy that they want to be involved, but I’m going to have to dedicate more of my time to creating experiences like this.

For employers who may become interested in involving their employees in plan design decisions, what advice might you give?

McNichol: When our individual values would cause us to make different decisions, how we decide becomes very important. You have the opportunity to empower your colleagues to understand different viewpoints and get a sense of what they collectively value and what solutions they prefer in order to better focus your efforts. It is so much more satisfying to work this way.

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