Recent Headlines suggest that High-Deductible Health Plans have “Fallen from Grace”. Is that true? Many Insurers hope so!

A number of stories have been published in recent weeks making the statement that “HDHP Fall From Grace in Employer-Based coverage”. Some of these stories rely on reports from the Kaiser Health Foundation (KHF) and articles from KH News (KHN).

KHF is a reliable source for health care and health insurance data; and your humble author has cited their data in numerous posts. The notion that HDHPs are getting less popular seems to stem from a survey conducted by the National Business Group on Health (NBGH) which predicts that the percentage of employers offering HDHPs will drop from 39% this year to 30% next year.

One factor cited for this forecast is that employers ( specifically larger employers) are being pushed to offer richer health plans in order to recruit and maintain a sufficient workforce. The great economy and historically low unemployment rates are making it harder for larger employers to find and hire the staff they need and will need to keep up with the growing economy.

We usually associate a growing economy with prosperity for more Americans but this time the economy and the jobs created by it is outpacing large employer’s ability to stay staffed. This issue is not being reported too heavily but it could lead to American businesses falling behind in filling orders and improving revenues. This kind of employment environment has never occurred in a peace-time economy.

The phrase “Employer Driven Health Plans” was trademarked many years ago as one firm in California pioneered the practice of putting Employers in the driver’s seat of their health plan, By integrating an HRA with a HDHP (usually HD but any plan really) the Employer can provide the benefits it desires or requires at a lower cost that traditional plans.
So, I offer a contrarian view for two reasons.

One, the forcast is based heavily on large employers and less on small employers who are growing just as fast as larger employers. If an employer with 10 employees adds one employee to staff that is 10% but if a larger employer( example 500 EEs) adds 10% it is a bigger number of Americans employed. While it is easier to survey large employers than small employers, the result stays the same, American businesses are hiring and need good benefits to compete for staff.

Two, it does not include the huge potential for Employer Driven Health Plans (EDHP) utilizing HRAs. Employers can continue buying HDHPs , which keeps premium costs lower, but then implement an HRA to improve the benefits employees desire.
Ever heard of  a plan “Turning Bronze into Platinum”? Well, that’s what EDHPs were created to do for employers.

Fact is:

  • Employers, both large and small, can provide richer benefits to their employees at lower cost using EDHPs than the standard or conventional plans available.
  • EDHPs can be more attractive to potential and current employees thus accomplishing the goal desired to attract and maintain good staff.
  • EDHPs not only lower cost and improve benefits but will also improve the quality of care received.
  • EDHPs also provide greater access to  that quality care  we all seek by making more providers available than are currently available on many plans.

Larger employers have utilized HDHPs on a greater percentage than small employers but not by implementing the concept of EDHP.

Smaller employers have had less access to EDHPs over the past 10 years due to the unlawful restrictions that many insurers have implemented. But due to a recent anti-trust lawsuit Insurers are no longer threatening brokers about using EDHPs.

This should mean that more small employers will see an EDHP proposal as an option when selecting its next health plan.

Brokers, consultants, Insurers and Employers should not give up on HDHPs as a potential solution to meet the health plan requirements for their staff. Employers should be presented every plan possible in the region to fulfill the RFP it presented, including an EDHP.

The result will be a resurgence in HDHPs with an increased level of satisfaction by both the sponsoring employer and covered member.

Employers just need to find a good TPA to present the EDHP options to them. If their broker/consultant does not present them with a proposal from an experienced TPA administering EDHPs then the employer needs to find a new consultant.

EDHPs are possibly the best example of why and how we are all in this together.

BTW, be sure to vote on November 5th.
Until next week.

Mark Reynolds, RHU
559-250-2000
mark@reynolds.wtf
It means “Walk the Faith”.

 

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