Good health insurance is one of the most valued benefits that an employer can offer to attract and retain employees. Almost half of U.S workers, about 158 million people, have employer-sponsored health insurance, according to the Kaiser Family Foundation.
High-deductible health plans (HDHPs) have become an increasingly common type of insurance, with nearly a third of covered U.S. workers enrolled in an HDHP in 2021, up from only 10% in 2010. HDHPs feature lower-than-usual month monthly premiums but higher deductibles, and they are often combined with health savings accounts (HSAs), which allow beneficiaries to set aside tax-exempt money for medical expenses.
HDHPs are intended to make enrollees more sensitive to the costs of health care services to help lower overall health care spending. However, they can also create barriers to health care for people with lower incomes or with chronic conditions requiring regular provider visits 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.
Employers can design a smarter HDHP that optimizes value and does a better job of meeting employee health needs. 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.
In a survey of 50 large employers, two thirds or more agreed on the nine practices in HDHP design. They also identified the five most impactful of these practices as providing HSA contributions, front-loading contributions, basing contributions on employee actions, offering ongoing education and covering preventive care pre-deductible.
However, gaps exist between what employers considered a good practice and what they implemented in their HDHP designs. For instance, while 98% of employers agreed real-time pharmacy tools and ongoing education are good practices, only 52% offered these pharmacy tools and only 70% provided ongoing education.
About 96% of employers agreed covering preventive care pre-deductible as fully as federal regulations allow is a good practice, while 72% actually implement this tactic. Recent NPC-sponsored research by the Employee Benefit Research Institute found that many large employers are expanding pre-deductible coverage for medications and health services used to prevent exacerbations of common chronic conditions in response to a 2019 IRS rule change. The research also revealed that 81% of employers surveyed would further broaden this pre-deductible coverage if allowed by law.
“While many employers are taking a more proactive approach to managing employee health benefits, there are opportunities to implement additional HDHP good practices to create health benefits that deliver even greater value to the employer and the employee,” said Kimberly Westrich, NPC vice president of health services research.
In the NPC-GRI study, employers reported that HDHPs generally achieve satisfactory results but can sometimes cause difficulty for patients. Some expressed concern that out-of-pocket costs create a financial burden for employees, especially low- and middle-income workers, potentially prompting enrollees to delay medical care or decrease medication adherence. The negative outcomes most often observed by employers were increased emergency room claims and reduced claims for routine care.
Although HDHPs have been somewhat successful in lowering employer health care spending, employers need to be aware of potential unintended impacts on patient health. NPC recently collaborated with the National Alliance of Healthcare Purchaser Coalitions on an Action Brief, “Better Value, Smarter Deductibles in HSA-HDHPs: Improving Health, Equity & Engagement,” which highlights key steps that employers can take to enhance their benefit design approach to support better out-of-pocket spending, reduce costs, and improve employee engagement, while also considering health equity concerns.
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.
Learn more in NPC’s High-Deductible Health Plans: Good Practices.