News & Events

When Considering an HDHP — Be Realistic

January 2, 2018 | Mike Falis

In recent years HDHPs have become a popular option for employers who provide employee benefits and healthcare coverage. High Deductible Healthcare Plans are insurance plans with lower premiums and higher deductibles than traditional HMO and PPO plans. Plan participants often make use of HSAs or HRAs to combat higher deductibles.

Why is it important to be realistic when choosing an HDHP?

HDHP; the less expensive healthcare option The reason that HDHPs have become so popular amongst employers is simply that they make providing healthcare more affordable. HDHPs are less expensive, creating a higher chance for profitability within an organization. However, that opportunity comes at a cost. When considering an HDHP, it is important to remember that they are not the best option for everyone, and employers should take a hard look at their workforce before signing up.

What to review when considering an HDHP?

There are three critical factors to focus on when reviewing your workforce while considering an HDHP. If you find that your employees meet these credentials, then an HDHP is more than likely a good fit for your organization.

  1. Health Status
    First, it is essential to look at the health status of your workforce. If you are finding that most of your employees are healthy, without a continuous medical condition, then higher deductibles should not be a problem.
  2.  Health Value & Culture
    Next, employers should take a look at the culture of their employees. If there is a strong concern for a healthy lifestyle, that is great for HDHPs. Keep in mind, that an employer can have an impact on the value of health in the workplace. Implementing employee wellness programs and encouraging a healthy lifestyle can all be done by the boss.
  3.  Financial Capability
    Lastly, it is vital for employers to consider their employee’s financial capabilities. HDHPs do have more expensive deductibles, meaning that if employees do need to seek out medical attention, it will be more expensive. Now, employers can address this with HSAs, MSAs, and HRAs, but a trip to the doctors should not “break the bank” or add debt for employees.

 

Out-of-pocket cost for HDHPsWhy use an HDHP?

After reviewing your workforce, and you have found that an HDHP could be a good fit for your employees, there are plenty of reasons to make the change.

  • Premiums are lower, making health insurance cheaper for employers and employees.
  • Plan participants who rarely use their medical benefits save money.
  • Policyholders can use HSAs which not only help with medical costs but can also become a source of tax-free income.
  • Medical Expenses (office visits, prescriptions, and procedures) do not cost the market rate. Instead, insurance companies and healthcare providers negotiate pricing.

To learn more about High Deductible Healthcare Plans go to https://varipro.com/what-are-high-deductible-health-plans/