Workscape Institute

Despite growing recessionary concerns and ongoing combat operations in Iraq and Afghanistan, healthcare-related issues remain a key concern for millions of Americans and, ipso facto, those who seek their votes come November. In this election year, media coverage of the “healthcare crisis” is in overdrive, but coverage tends to fall into a subtly-nuanced version of the classic tale of haves and have-nots… only this time both groups are on the losing side of the equation.

Follow up:

The “haves” in this scenario are those who are insured but are forced to contend with skyrocketing healthcare costs and rising premiums; the “have-nots” are those who do not have coverage at all and are somewhat victimized by escalating costs – which continue to raise their barrier for entry. Regardless of where you stand on the political spectrum – left, right or somewhere in-between – it’s an issue to which everyone can relate. That’s why it makes such compelling news.

One group which is conspicuously absent from most national media coverage, however, is the employers. Companies are wrestling with the same economic issues as the people they employ, but must also contend with increased competition, greater regulatory pressures and the growing challenge of retaining the right talent necessary to maintain an edge in this competitive environment. Robust healthcare options remain a critical component of the overall benefits mix, but employers simply can not continue to absorb the costs.

The resolution lies within a compelling middle-ground where employers continue to provide access to high-quality and affordable coverage for their workers, while employees shoulder more of the day-to-day responsibility for their own health and well-being.

That’s where consumer-directed healthcare plans – or CDHPs – come into play.

Simply stated, CDHPs are plans which typically feature a low monthly premium but a higher deductible, which must be met before the insurance provider begins to cover expenses. Such plans are not for everyone and, should an employer offer a combination of CDHP and “traditional” plans, some workers may feel more comfortable paying a higher monthly premium in exchange for the comfort of a $20 co-pay. For many workers, however, the combination of a high deductible plan and a flexible spending account (FSA) or similar instrument can offer the best of both worlds: comprehensive coverage and lower monthly costs. Determining whether or not a CDHP is right for you, however, can be complicated… therein lies the rub.

Despite news reports to the contrary, CDHPs can make a great deal of sense for many workers. (In fact, roughly 1/3 of all companies leveraging Workscape’s Outsourced Benefits Administration solution now offer at least one CDHP option.) In addition to the reduced monthly premium, placing regular deposits into a healthcare-specific savings account can produce measurable tax savings for employee and employer alike. 

To properly assess whether or not one is best suited for a CDHP, from both a financial and medical standpoint, online “decision support” tools have been gaining in popularity. Decision support tools – such as those provided by Workscape and its partners – help individuals to weigh their healthcare options and make better-informed decisions. When offered in tandem with self-administered personal health surveys – typically referred to as Health Risk Appraisals or HRAs – employees can also gain a snapshot of their current health status and identify areas for improvement.

Properly administered, CDHPs and associated support tools can play a vital role in reducing healthcare spend, increasing awareness of day-to-day healthcare costs and leading workers to become more active participants in their own health maintenance. This approach is a win-win for employer and employee alike and can deliver tangible, measurable results for years to come… regardless of who winds-up in the Oval Office.

Although this blog is hosted by Workscape, the healthcare discussion ultimately belongs to you. Are you an employer who currently offers CDHPs? Are you considering adding one or more? Can you share some best practices on CDHP rollouts? Let us know what you think!