In a continuing effort to stem the tide of rising health care costs over the years, employers have increasingly asked employees and their families to take a more active role in their health care. With the advent of consumer-directed/high-deductible health plans and their associated accounts -- health savings accounts (HSAs) or health reimbursement accounts (HRAs) -- has come a growing expectation that, as employees are asked to shoulder more of the cost of their care, they will become more thoughtful about how and when they use their coverage.
Unfortunately, this expectation has generally not been met.
A PolicyGenius survey of 2,000 consumers revealed that 96 percent of Americans couldn’t define basic health care terms, including "deductible," "co-insurance," "co-pay," and "out-of-pocket maximum."
If employees don’t understand these basic concepts -- which directly affect what they will have to pay for their health care -- how can we expect them to make smart health decisions? And, if they can’t understand the basic elements of cost sharing, how can we expect them to grasp more complex concepts like choosing between plan options, setting up an HSA, or the importance of comparing costs?
Health care is perhaps the one commodity that we tend to buy without doing adequate research. According to a 2015 Aflac Open Enrollment Survey, more than half of U.S. workers (56 percent) devote 30 minutes or less to the annual task signing up for health care benefits. That’s just one quarter of the time employees spend deciding what TV to buy – and a tenth of the time they spend planning their vacation. Worse, that same Aflac survey found that 42 percent of employees estimate they waste up to $750 each year because of errors they make with their benefits. These surplus costs don't only impact employees, but their employers, as well.
Clearly, if an employee isn’t equipped with the information or tools they need to truly behave like a health care consumer, they’re not going to.
Employers must ensure that their employees are educated on their health care options so they can effectively navigate the complex health care system and select the best plan and treatments for their needs. Providing this needed education, however, can be a challenge, especially for employers whose HR resources are already strapped. Luckily, employers can enlist the help of brokers to guide their employees and ultimately save their organization unnecessary health care costs.
Equally important is demonstrating to employees the value -- the impact on their own wallets -- of doing that benefits research. Increasingly, brokers are offering customized engagement, advocacy and transparency services to demonstrate how comparing cost and quality information can save both employers and employees money. Below are best-of-breed services employers and their employees should expect from their broker.
Personalized, One-to-One Education
The best way to ensure employees are getting the right coverage is to discuss their needs individually. Discussing the needs of each individual employee can be overwhelming for employers to manage internally, is critical to ensure employees are getting the right coverage. This is where brokers can step in to create a more personal and engaging experience.
These one-to-one conversations allow a safe space for employees to ask “dumb questions.” They also provide an opportunity for brokers to remind employees that there is no one-size-fits-all plan, and that choosing the most inexpensive plan on paper might not be the most inexpensive plan for that employee over time. Brokers can also use this time to discuss the employee’s current and upcoming family health status and needs (think: surgeries, new babies, etc.).
This time is not only important to educate employee on the best plan for them, but also how to use that plan and make smarter health care decisions year round, which ultimately save employees -- and employers -- money.
Transparency and Advocacy Services
Employers and brokers also have the opportunity to help set employees on the right path with transparency tools that steer them toward preferred options for both planned and unplanned health-related needs.
Already, employers are making strategic decisions to invest in providing advocacy and transparency services for their employees. According to our 2017 Medical Plans and Trends Observation Report, 51 percent of employers currently offer price transparency tools to help employees choose the service or product best suited for them, and 18 percent plan to add such tools in the next three years. Not only are these services reducing employers' health care spend, but they are also lowering the out-of-pocket costs for their employees and their families.
Brokers provide access to knowledgeable and experienced advocates who can help employees shop for their health care, answer benefit questions, locate in-network providers and resolve claims issues. In one case, a transparency tool revealed a $20,000 difference in price for a surgery in the network, in the same geographic area and with the same surgeon. Transparency services help employees see the true cost of their care, understand how costs can vary for the same service, and see that lower cost doesn’t have to mean lower quality. A recent nationwide study showed that 59% of Americans who have compared prices choose a less expensive doctor, hospital, medical test or treatment – ultimately saving both themselves, and their employers, money.
Transparency and advocacy services also reduce the risk of employees being overcharged for their care. Estimates of medical billing errors vary widely –- from as low as 7 percent to as high as 75-80 percent –- or even higher. Transparency and advocacy services give employees the opportunity to better understand and, if necessary, challenge their health bills to ensure they’re paying for what they received – and not a cent more.
Our annual medical trends report shows that employers are seeking more diverse and effective solutions in an effort to control health care costs – but they won’t be successful if they don’t engage employees on how to maximize these choices via personalized education and price transparency.
In a time of uncertainty in the health care space, brokers need to be more engaged than ever to help employers empower their employees to control costs. Brokers can be the trusted, informed and consistent adviser to help realistically deliver the results organizations crave.