Qualified consumer-driven health plans (CDHPs) and health savings accounts (HSAs) have been around for the last five years — but still, agents continue to complain that this lower-priced tax-advantaged combination is too complicated and that their clients, both in the individual and group spheres, just don’t get it.
Well, first of all, let’s admit that these plans can be hard to explain and for our clients to understand — at least at first. For the past 30 years, we have been selling our clients a very simple product. Basically, all we needed to show the client with traditional medical plans was the office visit copayment, the deductible, the provider network, and the premium. After shuddering over the premium, the client would select the combination of features that best met their needs — and we were done until next year.
With a product like that being the norm for so long, it’s no wonder that when it comes to selling health plans, agents have forgotten one of the basic rules: Promote the benefits and not the features.
Many agents make the mistake of introducing the qualified CDHP to their clients by saying something like, “How would you like to look at a plan that has a higher deductible than you have now, but you can open an account where you can save some money tax free?”
The client invariably responds, “Higher deductible? I don’t think so. My deductible and out-of-pocket costs are already too high.”
The agent takes that objection as, “No. I don’t get it. Why would I want to do that?” After a few more attempts to make sense of the plan, the agent drops the discussion altogether and offers to find a more competitively priced traditional PPO plan (good luck with that). Worse yet, the agent may eventually lose the case to a competitor who is more skilled at selling the benefits of a qualified CDHP.
Here’s how that successful competitor may have started the conversation: “I know you’re tired of the big rate hikes every year. How would you like me to help you implement some long-term changes that will alter the way that you/your employees interact with the health care system, allow you/your employees to live a healthier and more responsible lifestyle, and save you money?”
By discussing the benefits of the plan instead of the features, you should have the prospect’s attention, whether they are buying insurance for themselves or a 500-person group. But getting the buyer’s attention is only the first step to successfully introducing a qualified CDHP and the HSA — now, it’s up to you to educate your client on the principles, mechanics, and language of qualified CDHPs. Remember: Stress the benefits, not the features. Clients want to know how the plan will work for them. Effective education, then, should be tailored to your client’s circumstances, or in the case of a group, all covered units.
Here are four ways to make your presentations on qualified CDHPs more effective.
- Conduct face-to-face meetings. Yes, face-to-face meetings to explain the plan are essential for success. It is worth the time and effort to conduct these meetings, whether they’re one-on-one or in small groups. The last thing you want as an agent is to introduce a new plan that will lead to a negative experience because the client didn’t understand how to use it.
- Use examples. Before meeting with your client, take the time to illustrate, on paper, how the qualified CDHP works for your client when compared with their current plan. If you don’t know enough about your client’s health care usage patterns or you are meeting with a group, develop several hypothetical situations using the most prevalent health issues found in the covered population. Be sure to develop examples for single consumers as well as families.
- Keep it simple. When presenting a new concept such as a qualified CDHP or an HSA — for example, replacing a PPO with a flexible spending account — it is very important that you explain new terminology. This business is full of acronyms, and you can never assume that your client knows the difference between an ABC and an XYZ. Be sure to carefully define each new term or concept that you introduce during your presentation. Make sure that your client understands the basics before getting into more advanced discussions about investment options and catch-up contributions. Remember, you have promised to help your client implement some long-term changes. You do not need to explain the entire program in one session.
- Follow up. Schedule a follow-up session with your client after they have had some experience using the plan. If you’re working with a group, the follow-up session could take the form of a focus group where you ask a small group to sit around a table and share their experiences. Be prepared to hear some complaints, but this is your chance to help clear up any misunderstandings and to suggest ways to get more value from the plan. Better yet, allow others in the group to share how they are using the plan. The sharing of actual experiences will replace the hypothetical with the real and will speed understanding and acceptance of the new plan.
Despite the fact that consumer-driven health plans have been in effect for a few years and are commonly tossed around the trade and mainstream press as an effective solution to rising health costs, there can be a disconnect for those expected to use these plans. With something so different from traditional plans, where individuals and employees must take control of spending and help manage their own health care in exchange for savings, education is key. With the four-step process above and a little patience, your clients will soon begin to come around — and word of mouth will spread.
Martin Trussell is the senior vice president for First Horizon Msaver Inc. He can be reached at [email protected].