Consumer-directed health plans are the new kids on the benefits block, and data on their long-term appeal and influence are just starting to come in.
But enrollment in health savings accounts, health reimbursement arrangements and flexible spending accounts is surpassing analyst projections by a wide margin. CDHC is planting itself alongside traditional insurance as a viable health plan option as it grows in popularity and takes hold of the critical mass.
A recent study from consulting firm Watson Wyatt predicts that next year 40% of companies will decrease their benefit plan options and will either keep or add an HSA. This research also suggests that more employers will offer a CDHP as their company’s only benefit plan option; currently, 5% of employers offer a CDHP on a total replacement basis and an additional 4% are expected to follow suit in 2008.
It’s clear that brokers need to step up or get out of the game as a result of this consumer-centric shift. Employers want to see their options, and learn about new strategies.
The steady employer exodus from traditional plans means more CDHPs in the pipeline and big earning opportunities for motivated and educated insurance professionals.
At many leading-edge benefits brokerage firms, every client sees at least one CDH proposal at renewal time.
Nevertheless, many employers are reluctant to pull the trigger on a new CDH initiative, partly because the learning curve appears to be so steep.
That is why now, more than ever, CDH education is essential, and it begins with the broker.
Brokers need to make sure employers and their employees understand the entire CDH program. That means the plan design, consumer health finance tools including debit cards and accounts, and wellness advocacy. It’s not just about insurance anymore.
Educating the broker
It’s apparent that CDHC can save employers money, but there are many moving parts to the solution: accounts, insurance, employee communications, and education programs that promote behavior change.
The National Association of Health Underwriters, Arlington, Va., has launched a CDH certification program designed to clarify CDHC, so brokers can explain, sell and implement plans with confidence.
The NAHU course includes a legislative history of account-based health plans, examines the distinctions among accounts and clarifies qualified expenses and contribution limits. Additionally, students engage in mock discussions with “pseudo-employers” to assess whether a CDH plan is a good fit for their organizations. During this exercise, they review past claims history, existing health plans, employee culture and long-term goals. If the student brokers conclude that a CDH strategy appears to be a good fit for their mock clients, they design a plan, create a timeline and develop an enrollment and employee education strategy.
Educating employers and employees
Change can be unsettling, especially when it involves health care, and many companies are wary of new initiatives that may result in employee backlash or become a roadblock to retaining and attracting talent. Brokers must assist their clients in understanding the truths behind CDH: What is the ROI? What incentives are necessary? What are reasonable first-year enrollment expectations?
To simplify the process many brokers approach their clients with a roadmap to CDH that addresses employer education, account-based plan design, employee onboarding and ongoing education, and reinforcement, which is usually created with the help and shared resources of a CDH administrator.
When presenting a CDH plan to a client, some brokers can share a persuasive testimonial–their own.
The brokers with the best success selling the CDH concept are probably those that are using CDHPs themselves.
Analyzing the client
As a health insurance broker, it’s your task to identify your clients’ corporate culture and understand their goals are moving forward. Is it attracting and retaining the best talent? Is it motivating behavioral change?
Once you answer these questions, you can identify which type of CDH account can best complement the client’s strategy.
If the client’s objective is cost savings, an HRA might be a good fit. If the client wants to offer an incentive for behavioral change, it should consider HSAs. If it just wants to explore CDH, introduce the client to an FSA program and, in the future, help the client transition to a broader CDH solution.
Brokers also must familiarize themselves with the administrators of these CDH accounts, to ensure that they have a complete appreciation and understanding of the entire CDH experience.
Beverly Regester is manager of marketing communications at ConnectYourCare, Hunt Valley, Md., a company that sells consumer health care finance administration solutions. She can be reached at .