Use High-Deductible Health Plans To Win More Worksite Sales
It was easy in the past to tell the difference between traditional employer-sponsored health benefits and voluntary health benefits. Traditional health benefits, whether through a preferred provider organization or a health maintenance organization, were offered and paid for primarily by the employer.
Where employers did not offer PPO or HMO coverage, they often would offer critical illness or hospital indemnity-type programs. These are typically voluntary, sponsored by the employer but paid for by the employee. Different insurance companies typically conduct enrollment meetings for these products at different times, and decisions about such voluntary coverage are made outside of the selection of traditional health coverage.
The differences between employer-paid and voluntary health care benefits are no longer that clear, especially with the advent of high-deductible health plans and health savings accounts. These consumer-driven health care options have characteristics of both traditional and voluntary products. This translates into a more complex health care decision for the employee. It also creates opportunities for producers to strengthen their relationships with business owner clients and provide additional solutions to each businesss employees.
Unlike most voluntary health care plans, the employer normally pays a significant percentage of the premium for the high-deductible health plan for employee coverage. This encourages employees to sign up, so they are protected against catastrophic medical claims. Enrollment is straightforward, using similar techniques and tools that are in place today for other health benefits. Although the details are different for HDHPs, the benefits are similar to other offerings.
Because the HDHP and the HSA are new, however, they require additional communication and new sales tools. They may look partly or entirely voluntary to the employee, depending on the funding strategy of the employer.
Many producers ask themselves why they should spend time helping individual employees determine how much money they should put into their HSAs since this takes time and produces little or no direct compensation. But it does something else that is very important to the producer. It provides a forum to discuss employee needs and present other voluntary products, such as dental, disability and life insurance.
David Van Ahn of Van Ahn Insurance Services LLC., an Ankeny, Iowa, brokerage, has developed a comprehensive 4-step approach to selling and enrolling HDHPs and HSAs. According to Van Ahn, the key is to “educate, educate and then educate.” His process reflects that focus.
First, he meets with the prospective employer to explain how HDHP-HSA programs work. This comprehensive discussion focuses on benefit and tax implications as well as likely reactions from employees. The agent also presents preliminary rates to give the employer an idea of the savings that can be expected.