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 HDHP insurance and wellness programs.
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 wellness 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 to participate in wellness programs, employers may offer cash, discounts on products and services, gym memberships and other types of incentives.
Employers benefit from wellness programs by:
- Lowering healthcare costs
- Reducing absenteeism
- Increasing productivity
- Producing happier, more motivated employees
Employees benefit from wellness programs 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 doing so.
EBRI/Greenwald & Associates recently surveyed consumers on their engagement with wellness programs reported. They found that employees with a qualified HDHP plan were more likely to research the cost of their healthcare services than those with traditional health plans. They also noted that employees participated in wellness programs at a higher rate, and had more awareness of the incentives offered by their employers.
For employers seeking to increase participation in their wellness programs, offering an HDHP can provide a strong incentive for employees to enroll.