By Kathleen Greer

Nonetheless, 30% of large employers across the country have added HDHPs to their health care options and 45% are expected to offer them in 2010. It is predicted that 60% will offer them by 2020 and for good reason. HDHPs, coupled with a Health Savings Account (HSA) can save companies an average of $1,800 per employee per year when compared to a traditional plan such as an HMO or PPO with a $300 deductible. And these plans can be win-win solutions for employers and employees alike. Employees may pay 40% less in premiums, while employees gain a new type of portable retirement plan, one that they may never pay income taxes on if the money is eventually used for eligible health care expenses.

In addition to direct savings, a 2009 ACS/BNY Mellon survey showed that 52% of their HSA participants are monitoring health care costs more closely. The plans help employees instantly become better consumers of health care while both parties save money on premiums and claims.

If HDHPS are so good, why are the enrollment numbers still low?

Cash Flow Concerns by Employees

While the annual cost of the HDHP may be lower than other plans, employees fear that they will not have enough cash flow to pay bills when they need care. When faced with familiar plan designs, employees will stick with what they know if they can.

Lackluster Support from Senior Management

Many business leaders fail to see that high deductible health plans can be a welcome option for employees who want to reduce insurance premiums. They may not understand the plan from a funding or design perspective, and may minimize the importance of premium reduction. They may see them as "catastrophic" plans, instead of plans that can offer win-win solutions for both employees and employers. Although business leaders see health care costs as a key business issue, many are fearful of alienating their employees. They're afraid to champion the HDHP, thus sabotaging efforts to get a movement going.

Lack of Motivation

Unless there is a substantial difference in premiums, employees will elect the tried and true. Some organizations minimize employees' motivation to switch health plans because they are priced without much a difference among them.

Fear Factor

Employees are spooked by the idea of having to pay a deductible, after being spoiled by years of small co-pays. Employees have experience with deductibles within auto and property/casualty plans and don't welcome more of the same.

Misunderstandings

The average employee in a typical open enrollment process takes less than thirty minutes to make a decision about health care insurance. Understanding the ins and outs of a HDHP and HSA can be overwhelming. It requires time and personal communication with Benefits specialists.

So what can organizations do if they believe that consumer-driven health care is part of a business solution to rising costs?

Do the analysis.

It is important to think strategically and analyze your current situation before deciding whether to offer a high deductible plan. This analysis includes reviewing employee demographics, average salaries, claims data, and current 401k contributions. With that information, the plan can be designed to provide the right coverage at the right price point.

Lead from the top.

With data in hand, educate leaders so they will champion the cause. Craft a strategy message that says, "This makes good business sense... health care is heading this way, and it's time to get on board."

Design it right.

There are factors that will drive people away from a HDHP that can be mitigated in a plan design. Companies need to ensure that:

            • The deductible isn't too high

            • Out of pocket maximum isn't too high

            • There is a significant cost differential between HDHP and other plans

            • Company pre-funding of the plan is offered for the first year

            • There is a company-wide focus on consumer education and wellness

Although "best practices" are not yet firmly established, we know that most companies supporting HDHPs are attempting to offer plan designs that will attract at least 50% of the population while trying to maximize overall financial savings for the company.  Here is some other interesting data.

• The average individual deductible last year was $1,838 while many companies offered the minimum deductibles required by Federal law in order for employees to be eligible for an HSA. ($1200/individual and $2,400/family in 2009)
• The average out-of-pocket maximum was $3,312/single and $6,485/family.
• More employees will sign up when the HDHP premiums are 40% less than traditional plans.
• Forty-five percent of employers contribute $500 or more to an HSA.

Communicate all year long.

Fears about health care coverage run deep and will not be alleviated through the usual open enrollment process, particularly when it is strictly impersonal. For the first year of an HDHP, an investment in a strong, customized marketing communications program will help give people the confidence to migrate to the plan. Use the real data and there will be an immediate return on investment if it is done right. Testimonials, incentives, face-to-face education, and "what if" scenarios will work if people are given enough time and support to do their own analysis. Many of these techniques can be integrated into wellness activities or other benefit communication. These programs cannot be pitched to people quickly or they will feel that the company is trying to trick them.

High Deductible Health Plans are gaining momentum and will undoubtedly become a focus as our health costs continue to rise. Through top-level support, crafting the right plan, and communicating it thoroughly, employees can be convinced of the merits of an HDHP, one person at a time.

Author Biography:

Kathleen Greer is Founder and President of KGA, Inc., a human resources consulting firm headquartered in Framingham, MA.  She can be reached via email at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .