HSA Turnover Rate?

pattyo

We are looking at going to an HSA. I'm not crazy about it because it looks like the first year will be tough as far as educating employees to any advantages especially because our benefits are excellent as they are. Our president is convinced it's the way to go. Has anyone experienced a higher rate of turnover after instituting an HSA?

LarryC

We went with the HSA plan this year and got about 60% of enrollees to sign up for it. The other 40% of the enrollees opted for the more expensive, low deductble plan with copays.

I had researched this HSA thing ever since it came out in 2004. I've been working with our broker to gather information on it, knowing that we would go to it at some point. Our game plan started last year when we introduced the high deductible, low premium plan along with the low deductible , copay, high premium plan. We had about 20% of the enrollees opt for the high deductible plan. These 20% were, of course, low users of the health insurance. The predictable happened. The low deductible, copay plan got used and experienced a very high loss ratio which earned that plan a 30% increase at the renewal. The high deductible plan renewed at the same premium as the year before. We introduced and attached the HSA to it, offerred a company contribution to it and sold it through small group informational meetings. We divided our 90 employees into groups of 5 for the informational meetings and then followed up with the same groups for the enrollment meetings. That's alot of work, but the only way to really communicate a new health insurance concept. For our ESL employees (Bosnian, Russian, and Hmong) we brought in interpreters and worked one on one with them.

As far as turnover, we do not expect any. Conversely, we tout the HSA during our recruitment efforts.

Sorry about the length. I could actually go on for quite a bit longer. Hope this helps.

pattyo

I'm glad to hear details! I don't know any companies currently on the HSA plan so I am unsure to even know all the questions to ask. The way you handled it sounds fair and would ease them into it if it's inevitable. Thanks.

System

I know enough to be dangerous - only have experience helping one of our very small clients install an HRA not an HSA. It worked well for them because they offered no health coverage at all until the HRA was implemented. Which is a point I beleive is something to consider: It looks as though these plans will be much more embraced by employees when the company has very limited or very basic coverage, then overlays an HSA or HRA on top. But when you currently have a "Cadilac Plan", I believe the employees react with much greater resistence. This, however, should not prevent a company from considering or implementing such a plan. It only is one of the factors I beleive needs to be considered.

SMace

On it's face it is merely cost shifting. That doesn't do crap long-term and in Larry's case actually made it worse short-term.

If you include EDUCATION and additional INCENTIVES it may work in the long term.

The only way to save money in the long-term is to get people to get healthy and use their insurance benefits wisely.

System

I think your assessment that it is cost shifting is quite accurate. But I think that's the point of these plans: get the employee to adopt a "consumer" mentality towards medical care by having them take on a greater finacial burden when considering medical care options, providers, frequency of care and overall utilization. Theoretically, this should drive costs down because of reduce utilization and competition amongst providers. Notice I said "theoretically"

SMace

Theoretical- right. HMO's worked in theory. They just stop going to the doctor until one day they either wake up in the hospital and leave with a $200,000 bill or they arrive at the pearly gates.

At least if they die it's cheaper.

As I said they will work with LOTS of education. The problem is there is not enough education available. If I want a colonoscopy, can I find out who is the cheapest doctor? I doubt it. If I can it's gonna take a lot of time.

If I find the cheapest doc, are they going to screw it up so I have complications and end up spending three times the money?

IMHO the health system is not currently set up for customers (patients) to be consumers.

sandra_d

We just switched to a high deductible plan with an HSA this year, and I can't say anything has gone well, and I certainly wish we had NOT made the move ... hopefully with time things will get better. Anyway, one of our employees told me yesterday that he's calling his doctor to see if there is a cheaper drug out there, or even an OTC drug on the market, that could take the place of his very high $$ medication that he's currently taking. I think this is an example of the "consumerism" that was supposed to happen with this kind of insurance ... I don't hold out much hope of our other employees tho. In fact, another employee told me she just isn't going to buy her meds anymore since she can't afford the up-front out-of-pocket cost! Hmmm...seems like a bad choice to me...

SMace

Sandra just gave the story of the good and the bad. Very good info.

One employee does exactly what they should- switch to cheaper medicine. The other stops taking the meds and will eventually go into a diabetic coma and spend tens of thousands.

That's why it is important, as Larry stated, to educate the ee's of the consequences of their actions.

Next thing you know you will be sued by the estate because you made the deductible so high they "couldn't" get the care they needed.

LarryC

Lots of good points raised here. The successful HSA, high deductible plan will still have all preventive services covered at 100% with no deductible or copay. This encourages wellness and catching "things" before the progress to major illnesses. A well run company wellness program is also a must.

Having an alternative plan for employees to choose from, albiet expensive, is also very helpful. In our case I used the "Cadillac plan" to sell the HSA plan. I urged the employees to look at the cost avoidance of the premium for the expensive plan to the HSA plan and think about using that difference to put into an HSA account. Other considerations were, of course, foreseeable medical expenses. Money put into an HSA account is retrievable. Money put toward premiums is not. Each employee's personal medical situation ended up dictating which plan was best for them.

EDUCATION IS A MUST!

LarryC

Call it "cost shifting", "cost sharing", or "cost dumping". What it is, actually, is a choice of two insurance plans which the company can afford and the employees can fit to their needs and to the best of their affordability.

"Consumer driven" really means having an unaffordable high deductible in a health insurance plan for unaffordable health care and services.

HSA's in the short term don't amount to much. Since they are savings plans, the money has to be in it before it can be withdrawn. Managed smartly, they turn into very liquid medical 401(k)plans. That's where the education comes in which, in our case, started a year and a half ago. It has to in order to be successful. With total monthly costs equal to a mortgage, ignorance can become very expensive.Some of our employees have progressed to the point where they are becoming pretty adept at coordinating an FSA with their HSA. Done right, it will save the employee lots of money in the unaffordable, unforgiving arena known as "health care".