For TPAs who offer HSA administration services, understanding HDHP enrollment and wellness program participation can be key when talking to clients and prospects. This article outlines the link between the two.
The cost of healthcare premiums continues to go up for both employers and employees. Since many employers pay a larger share of the premiums, it’s no surprise they’re looking for ways to control the cost of their healthcare plans. As a result, more employers are using high deductible healthcare plans (HDHPs) as a way to lower premiums and shift more of the costs to employees.
An HDHP helps employers lower their premium costs by requiring employees to pay a larger share of their healthcare costs. However, as employers are discovering, HDHPs can also increase employee participation in these programs.
What Is a High Deductible Healthcare Plan?
An HDHP is a health insurance plan with lower premiums and higher deductibles than traditional healthcare plans. The idea is that by paying larger out-of-pocket costs through higher deductibles, employees will become more educated users of healthcare services. HDHPs offer employees the ability to participate in Health Savings Accounts and other tax-advantaged programs that can help control their healthcare costs.
Wellness Programs Create Healthier, Happier Employees
Wellness programs are designed to help employees improve their health by making better lifestyle choices. These programs typically include preventive health screenings, weight-loss and smoking cessation programs, while also encouraging people to exercise regularly. To motivate employees, employers may offer cash, discounts on products and services, gym memberships and other types of incentives.
Employers benefit by:
- Lowering healthcare costs
- Reducing absenteeism
- Increasing productivity
- Producing happier, more motivated employees
Employees benefit through:
- Better overall health
- Interaction with co-workers away from the office
- Learning stress management techniques
- Reduction in medical expenses
How HDHPs Impact Wellness Program Enrollment
Because employees pay higher deductibles with HDHP health insurance, they learn about the true costs of their healthcare. As employees pay a higher share of those costs, they start looking for ways to reduce them, and wellness programs provide an effective tool for doing so.
In 2020, EBRI/Greenwald & Associates released a study that examined the way employees look at the financial security and satisfaction with offered benefits. They found that about 28% of employees felt that their employers’ efforts to improve their overall well-being had improved. Also, 48% felt that their employers had done a good job of helping them to improve their physical well-being. Finally, they found that health wellness programs being offered are increasing in employee popularity.
For employers seeking to increase participation in their wellness programs, offering an HDHP can provide a strong incentive for employees to enroll.