In January 2006 more than 3 million people were covered by health savings accounts offered in conjunction with relatively low-premium, high-deductible health insurance plans.
This represents a huge leap from the 1.03 million enrollment figure in March 2005. While the new HSA number is still a drop in the bucket compared to enrollment in traditional health plans, the real story for brokers and advisors is that employers of all sizes are fueling growth in this market.
According to a census by America’s Health Insurance Plans, Washington, HSA growth at employers with more than 50 employees increased a walloping 320% in 2006, while small group enrollments increased 250%.
The rapidly growing interest in HSAs means that brokers and advisors need to be ready, willing and able to help employers and consumers understand how this powerful health insurance option can benefit them.
Sales professionals and insurers must find ways to reduce the employee anxiety associated with selecting a new, innovative product.
Brokers who can offer solutions that provide convenience and ease of use for employees can achieve better employee adoption rates, and, consequently, greater employer satisfaction.
Here are four HSA product features that can lead to enhanced employee adoption and use.
1. Integrated plan design with auto adjudication of claims.
Perhaps the most important characteristic for an HSA is integration between the savings account administrator and the health plan administrator. This allows for coordination of enrollments, call centers and Websites to deliver an integrated service experience to members.
A new feature that is taking integration to new levels of sophistication is auto adjudication of claims. Auto adjudication aligns HSAs and benefit payments electronically, providing coordinated billing and reporting and eliminating the need for employees to handle paperwork or pay bills out of their own pockets.
For example, with auto adjudication, when an employee seeks care from a contracted provider, the provider submits the claim to the insurer for eligible services. Covered benefits are paid through the preferred provider organization (PPO) at the health plan’s discounted rate, as usual.
What is new is that any identified employee out-of-pocket costs are deducted automatically from the employee’s health savings account. This facilitates payment for these services. Members receive a single explanation-of-benefits statement that shows the amount of funds deducted from the HSA, if appropriate.
In addition, because providers are reimbursed directly, members are taken out of the middle, reducing the potential for unpaid claims and provider dissatisfaction.
Auto adjudication is an important new health plan capability that works to the employer’s advantage, too, by helping to increase employee adoption of the HSA plan.
2. Online tools that increase employee financial control and predictability.
The success of today’s new consumer-driven models of health coverage will depend largely on the consumer’s ability to predict and control costs. Employees must have consumer-friendly online decision-making tools that provide real-time access to their accounts so they can determine available dollars for their health needs.
Select an HSA that uses Web-based tools to help members check their eligibility status and account balances, estimate their treatment costs, and choose a provider.
Health provider comparison tools should be integrated with transactional capabilities.
3. Cost-containment strategies for employees.
With employees shouldering a greater share of the health cost burden, HSAs must offer features that help reduce medical expenses.
Look for PPO plan designs that offer a broad range of providers while offering significant discounts. Expect features such as care management and wellness programs, and a 24/7 nurse line to foster health and well-being.
4. Health plan reputation and customization capability.
Employers and employees are proceeding with caution in this brave new world of health care. Brokers can make the transition to a new product less worrisome by recommending carriers with a history of employer and employee satisfaction.
Carriers should have deep and broad customization capabilities to create an HSA product perfectly suited to the employer’s and employees’ needs. They also should be able to offer innovative product options, such as integrated prescription drug plans.
Another key to success will be enrollment strategies that encourage high employee participation rates, such as proactive telephone outreach. Employees who can talk to live customer service representatives to get answers to questions and resolve concerns are more likely to be successful users of HSAs than employees who have to make do with canned responses from computers.
HSAs are quite possibly the future of health insurance in America, and brokers are a critical bridge to that future. By understanding the key features that will increase adoption rates and employee satisfaction, brokers are taking a major step that can help position themselves as experts with current and potential clients.