With healthcare costs on the rise, it comes as no surprise that employers who offer CDH products (like HSAs, FSAs or HRAs) are looking for creative ways to engage their employees to create awareness and increase adoption. These healthcare saving and/or investment vehicles help to ease the burden of increasing expenses while enabling both employers and employees to move with the market shift toward consumerism.
In much the same way that company-sponsored pension plans of yesteryear resulted in employee apathy about where retirement dollars came from and how they were invested, leading to today’s consumer-directed 401ks, company-sponsored health plans are following a similar path leading to greater adoption of HSAs.
Healthcare is becoming more and more consumer directed. We’ve all seen or experienced consumer driven health first-hand, in some way – whether it is determining which health plan is right for our family, making care decisions for a parent or loved one, receiving an unexpected bill for services, or trying to determine if a health benefit account (FSA, HSA, HRA) is the best vehicle to meet our future healthcare needs.
Long gone are the days of simply picking a benefit-rich health plan during open enrollment – essentially setting and forgetting healthcare management until the following year. With an era of consumer-driven healthcare upon us, this paradigm shift requires the modern healthcare consumer to be engaged and empowered to make the best decisions for their families and their finances.
You may not realize it from watching the news, but in June the U.S. House of Representatives was able to overcome the dysfunctional mire of Washington D.C. and took steps to enact four bills that will increase the availability and usability of account-based healthcare, especially HSAs.
On July 6, 2016, the House of Representatives passed the Restoring Access to Medication Act (H.R. 1270), sponsored by Rep. Lynn Jenkins (R-KS2) and Rep. Ron Kind (D-WI3).
The shift to healthcare consumerism is well underway. Trends continue to point to increased financial responsibility for consumers with rising deductibles, increased consumer out-of-pocket responsibilities, and accelerated adoption of consumer directed healthcare plans (CDHPs), health savings accounts (HSAs), and other account-based benefit offerings. According to Mercer, enrollment in CDHPs among large employers nearly doubled in the past three years from 15 percent to 28 percent of covered employees.
Employer adoption of these consumer-directed benefit designs will continue to grow for the foreseeable future, driven by the need for cost control, the impact of healthcare reform and the looming excise tax. The costs of providing healthcare continues to rise, surpassing $25,000 for an average family for the first time in 2016 (Milliman Medical Index).
Consumers are increasingly responsible for the cost of their healthcare – as evidenced by rising deductibles, growing out-of-pocket costs and accelerating adoption of consumer directed health plans and accounts. However, it is evident that consumers may not fully be prepared to manage these new responsibilities.
The 2016 Alegeus Healthcare Consumerism Index is an annual report that measures the degree of engagement and ‘consumerism’ exhibited during healthcare spending and saving decisions and affirms that there is still much room for improvement for consumers to optimize their financial health.
Rising healthcare costs have led businesses across the country to alter the way health insurance is offered to employees. One popular move has been making the switch to consumer-driven healthcare, which puts more of the responsibility on employees with high-deductible health plans.
Additionally, businesses have also been adding wellness programs. However, if these initiatives are unsuccessful, they're a waste of money. That said, companies might want to consider the following six strategies to help make wellness programs a success: