This post was originally published in March 2018 and updated in 2021.
Every year, companies must decide on how much they’ll need to change their existing employee benefits. As annual rates increase, it can be financially painful to stick with the status quo. More than ever, companies are working with their brokers to make more significant plan design changes to account for the ongoing COVID 19 pandemic and serve the diverse needs of their workforce. Read on to get the lowdown on how you can help employees navigate a benefits plan design change.
Following a year of disruption, we’re seeing quite a few changes in the benefits space. According to Benefitfocus’ 2021 State of Employee Benefits Report, 71% of large employer groups are shifting away from a single health plan strategy by offering a mix of traditional health plans like a PPO and a high-deductible health plan (HDHP) for 2021, up from 65% in 2018. Of those that subscribed to an HDHP, 90% opted into an HSA this year, up from 83% three years ago.
Additionally, HSA participation increased most among younger employees, with millennials having the highest participation at 31% this year alone. Even the makeup of voluntary employee benefits has changed drastically. Identity theft protection usage is over 66% since 2018, while even Fido’s lot has improved, with 69% of companies projected to offer pet insurance by 2022 or beyond.
Changing your plan design can be jarring for employees, especially when most don’t understand coverage or the basics of their benefit plan. One survey found that only 32% of people could correctly define all three of the insurance terms “out-of-pocket expenses,” “deductible,” and “copay.” That’s problematic, especially when we consider how much we rely on them to comprehend such terms and understand how to navigate something as complicated as healthcare benefits.
What to Highlight During an Employee Benefits Plan Design Change
Companies typically hold annual open enrollment meetings to explain plan design changes. Whether you’re meeting virtually or in person, you’ll likely distribute a few – often lengthy — manuals. From there, employees are expected to navigate your benefit offerings on their own, or turn to human resources when they have a question. Enrollment meetings and any employee communication sent after, should focus on specific changes within the plan design to not only help employees understand their benefits but also drive utilization. Key takeaways that workers should understand include:
Premiums vs. Deductibles
Employers might not like the term “cost-sharing,” but with health plan costs rising, employers and employees are splitting the bill more evenly. For group health insurance, the cost structure basically hinges on two things: premiums and deductibles.
- Premiums. The portion that employers and employees pay for insurance, usually on a monthly basis.
- Deductibles. The amount of money the employee is responsible for before insurance begins covering expenses (except for preventive care, usually). In general, the higher the deductible, the lower the premium.
Provider Network: Employees need to know about changes to the provider network. Encourage them to check if their existing doctors are still in-network on their new plan. Employees should also be encouraged to develop an emergency care plan that includes in-network hospitals, urgent care and a new primary care physician (PCP) if necessary.
Formulary: If an employee is on a monthly maintenance drug, they’d need to verify that the drug is within the same pricing tier under the new formulary plan. If pricing changes, they need to know the new cost before visiting the pharmacy to avoid any surprises. They could also have a doctor adjust their medications based on the new formulary.
HRA / HSA / FSA: Health savings account usage is growing, but many employees don’t know how to use them or comprehend their enormous benefits. Understanding what’s an eligible product or the ideal time to spend your money depends on many circumstances. Providing employees with ongoing resources for these types of accounts can help maximize their benefits. Otherwise, they may not receive the same value and end up switching back to a more expensive plan.
Using HealthJoy to Ease Plan Design Changes
HealthJoy’s healthcare navigation platform is designed to connect employees to the care they need at the moment they need it. Our customer success team works alongside clients and brokers to ensure that on launch day, there’s no disruption to the member experience. They’ll still see their selected benefits as well, personalized information, deductible accumulators, health financial account balances, and more within their benefits wallet.
JOY and our healthcare concierge team will note the changes and seamlessly continue to find local health providers, create an emergency care plan, and conduct Rx Savings reviews to uncover potential savings. Plan design changes can be frustrating and confusing for employees. With clear messaging, a focus on changes, and a single source of truth for healthcare and benefits navigation, HR teams can make even the largest transitions run smoothly.