Authors: Laura Rudder Huff and Patrick McShane, Gallagher Research & Insights; Kimberly Westrich, MA, Amanda Green, MPH, and Emily Ortman, National Pharmaceutical Council
New research from the National Pharmaceutical Council (NPC) and Gallagher Research & Insights (GRI) reveals employer-identified good practices for designing high-deductible health plans to help enrollees better maximize the value of their benefits and navigate their treatment options.
High-deductible health plans (HDHPs) feature lower-than-usual monthly premiums and higher deductibles and are often combined with health savings accounts (HSAs), which allow beneficiaries to set aside tax-exempt money for medical expenses. These high deductible plans can be problematic for people with lower incomes or with chronic conditions requiring regular care or medications. Enrollees can end up paying thousands of dollars in health costs at the start of the year to meet their deductible, leading some to avoid needed care, which results in worse health and productivity.
To identify good practices for HDHP design, NPC and GRI conducted a literature review, health care stakeholder interview and survey of large employers.
Employers identified the following nine good practices in HDHP design to help enrollees maximize value:
- Offer ongoing education that emphasizes retirement and tax-free advantages of HSAs
- Offer real-time pharmacy tools that provide the prices of medications at various locations
- Cover preventive care medications pre-deductible as fully as HSA federal regulations allow
- Offer tools that allow enrollees to estimate costs for medical appointments and procedures
- Offer HSA contributions
- Offer an investment option as part of the HSA
- Offer an alternative plan design in addition to HDHPs
- Offer additional HSA contributions based on employee actions
- Front-load HSA contributions
Employers acknowledged the usefulness of HDHPs, while noting they are imperfect tools, with some employers expressing concern about the financial burden of HDHPs on enrollees, especially low- and middle-wage employees. In addition, gaps exist between what employers considered a good practice and what they implemented in their HDHP designs.
This research shows that many employers are taking a more proactive approach than in the past when managing employee health benefits and employee health programs. However, opportunities exist to increase employer uptake of HDHP good practices to optimize their health benefit design in a more patient-centered manner.
This work builds upon previous HDHP research by NPC and GRI published in 2014. While the HDHP market had not yet matured in 2014, the research showed some employers were beginning to establish good practices. By 2021, the rate of HDHP adoption had leveled off and reached a state of maturity, allowing an exploration of whether consensus had emerged around good practices that consistently help enrollees in maximizing the value of their benefits and navigating their treatment options.
While the 2014 research broadly considered the entire HDHP market, this research update focuses on HSA-qualified HDHPs, which have become the predominant model in the market. This research included a literature review to identify potential HDHP good practices, interviews with 22 health care stakeholders to refine the list of good practices, and a survey of 50 employers with 5,000 or mor