According to data from the Kaiser Family Foundation, nearly half of the U.S. population gets their health insurance through their employer. That means half of the country doesn’t get to make any real consumer decisions about their health coverage, its cost, or what network they’re in.
Instead of making healthcare decisions for your employees by offering them a one-size-fits all group health insurance plan, another option is to offer them a more consumer-driven health benefit, like a health reimbursement arrangement (HRA).
By offering an HRA, you’re encouraging your employees to be better healthcare consumers, control their own healthcare costs, and put them back in the driver’s seat of their healthcare experience.
However, given that so many Americans are used to having their employer pick out their health insurance options, your employees may be nervous about tackling the health insurance market on their own. Luckily, we’ve got three quick tips to help your employees make the transition.
1. Educate them on the individual market
Health benefits are complex, and many of your employees may not know even the basic terminology they need to navigate the health insurance marketplaces.
Policygenius surveyed 2,000 American healthcare consumers and found that 96% of respondents couldn’t correctly define four basic healthcare terms: deductible, coinsurance, copay, and out-of-pocket maximum.
To combat the lack of understanding of health insurance concepts, your benefits education should start early and continue throughout the year. By presenting the information in a fun and visual way, and in multiple formats, employees will better understand, apply, and retain the information.
2. Be transparent about costs
Next, providing transparent cost information to employees will help them budget for a plan that fits within their HRA allowance amount. It comes as no surprise that our customer survey data shows that the number one expense employees get reimbursed is their individual health insurance premium. Making sure your employees understand how much their allowance is, how the rollover works, and which insurance premiums qualify for reimbursement will help them find a plan that makes sense for their budget.
Depending on how much of an allowance you choose to offer, your employees may have some HRA funds leftover after they get their health insurance premiums reimbursed. Our customer data shows that in 2020, employees used an average of 69% of their allowance by the end of the plan year. It’s your responsibility to make sure your employees know what happens to their unused funds at the end of the year, and when the deadline is for submitting reimbursements before it’s too late.
3. Offer continued support
Lastly, to help employees become better health insurance consumers, they need ongoing engagement and support. Depending on your employees’ comfort level, they may need more than one quick meeting explaining their benefits.
You should plan on having ongoing communication with your employees throughout the year on how to use their HRA, how healthcare reform legislation impacts them, and when open enrollment period is starting so they can renew their plan.
These reminders don’t have to be big or complex. For example, when allergy season comes around, you may send out a company email reminding your employees that many over-the-counter medications are eligible for reimbursement through their HRA, including allergy and cold medicine.
While diving into the world of healthcare for the first time may seem daunting at first, the steps you take to make sure your employees are educated will make their experience as simple and stress-free as possible. Following the tips in this article will foster better health insurance consumerism, help your employees better understand and value the health benefits provided to them, and reinforce the idea that you truly care about their health and wellbeing.
This article was originally published on October 30, 2013. It was last updated August 13, 2021.