Communication around High-Deductible Health Plans is Key for PEOs, Worksite Employers
There are an incredible number of solutions in the benefits marketplace right now. Professional Employer Organizations (PEOs) can demonstrate value and provide an important service to their employer members by helping them identify and focus on best-in-class tools and resources.
Although a Mercer survey found that only 7 percent of small employers shifted more cost to employees in 2021, high-deductible health plans (HDHPs)—especially when combined with health savings accounts (HSAs) can be an important option as small employers seek to reinvent for value. Even those employers who avoid a full replacement with HDHPs are seeing more employees enroll in these plans. The Kaiser Family Foundation reports that 28 percent of employers offer some form of HDHP; enrollment in HDHPs has increased over the past decade, from 20 percent of covered workers in 2014 to 30 percent in 2019.[1]
HSA-eligible plans cost, on average, about 20 percent less that a traditional PPO. This can translate into significantly lower paycheck deductions, along with the opportunity for tax-advantaged savings, both of which can help offset the higher deductible. New point solutions allow employees to access HSA funds at the beginning of the plan year, much like an FSA, while maintaining HSA perks. These benefits can help employers drive participation in HDHPs.
Education for worksite employers and their employers about these options is crucial. A multi-touch education strategy that illustrates the advantages during the enrollment process can help drive participation. Worksite employers who already have a robust consumer strategy, supplemented with tools and resources from the PEO, will be at an advantage. Increased enrollment in HDHPs helps drive lower costs for the employer and the PEO master health plan.
Mercer’s robust library of templates for worksite employer communications, open enrollment, and new business development is available to our PEO partners.
[1] 2019 Employer Health Benefits Survey. September 25, 2019. Kaiser Family Foundation.