3 Aspects of Highly Effective HSA Adoption
TA BLE OF
CO N T EN T S Introduction - Health Savings Accounts & HSA Adoption........................ 3 Part 1 - Plan Design. . ......................................................................................... 4 Offer HSA Bridge...................................................................................................... 5 Ease Employees into Stepped Deductible Plans ............................................... 6 Provide the Proper Number of Choices............................................................... 7 Map Out a Migration Plan....................................................................................... 8 Final Considerations: Best Practices.. .................................................................. 8
Part 2 - Structuring Holistic Contributions................................................. 9 Model 1: Fund the 401(k)...................................................................................... 10 Model 2: Equally fund the 401(k) & HSA........................................................... 11
Part 3 - BRI Insights & Messaging Strategies............................................12 How does BRI Insights Work?.............................................................................. 13 Four Messaging Strategies for Success.. ............................................................ 14
Conclusion - Begin with the End in Mind....................................................15 Contact Us. . ....................................................................................................... 16
3
BenefitResource.com
INTRODUC TION
HE ALTH SAVINGS ACCOUNTS & HSA ADOP TION In Steven Covey’s “The Habits of Highly Effective People,” habit one, “Be Proactive,” is defined as “Focus and act on what you can control and influence, instead of what you can’t.” Habit two is “Begin with the End in Mind,” with the description “Define clear measures of success and a plan to achieve them.” When you bear these two habits in mind, you set the stage for a successful Health Savings Account (HSA) adoption strategy. (We would also advise following the remaining five, but our focus will be on the first two).
W H Y H S A s? Many consumer-directed plans are available, but HSAs are uniquely positioned to provide participants with long-term and short-term savings options. Our goal in this eBook is to help you identify what you can control and use that to design a plan backed by practical best practices. We cover that in Section 1 before moving on to holistic contribution models in Section 2 and finally addressing messaging strategies to effectively engage employees in Section 3. Let’s start by looking at habit one: What you can control.
W H AT C A N YO U C O N T R O L? Any number of items could be listed here. However, we’ve chosen the three below because they are practical, attainable, and necessary for your HSA adoption strategy. • • •
Attract and retain talent Merge health and wealth Ensure employee retirement readiness
Now that we’ve identified what you can control, let’s briefly touch on the first part of habit two: defining clear measures of success. (We’ll come back to the second part at the end of this eBook). Your measure of success will most likely tie to how many employees enroll in your health savings plan. You have latitude with how to approach this. Regardless of if you go wide (“We want to boost adoption from last year”) or narrow (“We want to boost adoption by 5% from last year’s numbers”), you will need a plan to achieve your goal.
PART 1
PL AN DESIGN In this section we share our tried and true best practices to help you boost adoption rate effectively, including: 1. Offer HSA BRIDGE 2. Ease employees into stepped deductible plans 3. Provide the proper number of choices 4. Map out a migration plan
5
BenefitResource.com
PL A N DE SIG N
OFFER HSA BRIDG E HSA BRIDGE allows HSA participants to receive HSA contributions on an as-needed basis instead of waiting for funds to accumulate through payroll deductions. This optional feature makes sure your employees have funds when they need them, cutting down on the stress of unforeseen expenses. When it comes to financial or healthcare decisions, most of us will take a safe path that covers the “what if’s” in life. Often, it is fear that prevents employees from enrolling in a qualifying high deductible health plan with an HSA . HSA BRIDGE provides employees with the safety net to enroll, driving HSA adoption.
CRE ATE BA L A NCED OFFERING S STR ATIO
NT IP
A DM I
NI
Assembling a collection of different options through various combinations of health accounts like Health Savings Accounts, Flexible Spending Accounts, and Health Reimbursement Accounts allows employees to maximize benefits as they save money, optimize eligibility, and seamlessly transition between plans.
BenefitResource.com
PL A N DE SIG N
E A S E EM P LOY EE S I N TO S T EPP ED D ED U C T I B L E PL ANS
Another part of increasing HSA adoption is to introduce stepped deductible plans gradually. The keyword being gradually. From an employee’s perspective, transitioning from a co-pay plan to a deductible plan with a $1,500 (or higher) deductible will understandably lead to some hesitancy around signing up. H OW TO G E T A R O U N D I T:
Transform your current co-pay plan to a low or moderate deductible plan. Then, on a year-by-year basis, gradually increase it.
5 T I P S TO P O S I T I V E LY POSITION HIGH DEDUCTIBLE PL ANS:
1
Market them as “low-cost premium plans.”
2
Show side-by-side savings between high premium and low premium plans.
3
Give both monthly and annual savings examples.
4
Describe how the plan works under different medical expense scenarios.
5
Illustrate how premium savings, employer contributions, and tax savings combine for an attractive benefits offering.
7
BenefitResource.com
PL A N DE SIG N
PROVIDE THE PROPER NUMBER OF CHOICE S While providing choice is generally viewed favorably, providing too many options can overwhelm employees, reducing your ability to drive change. We recommend offering no more than three deductible-based plans at varying tiers. The result? Your employees have a fair number of choices without feeling overwhelmed (and they become more comfortable with high deductible plans!).
U S E A D E C I S I O N S U P P O R T TO O L
STR ATIO
NT IP
A DM I
NI
Decision support tools like BRI Insights incorporate personalized recommendations and visual representations to increase employee comprehension of benefit offerings.
8
BenefitResource.com
PL A N DE SIG N
MAP OUT A MIGR ATION PL AN You’re almost done! The next best practice is to map out a migration plan to move employees to an HSA . A big part of this is mapping out the why, how, and what for employees: •
WHY they should migrate
•
HOW to migrate
•
WHAT they can expect during and after the migration
FINA L CONSIDER ATIONS
B E S T PR AC T I C E S Your plan is mapped out, but how do you keep your employees engaged? We’ve boiled it down to a simple pair of best practices: DO US E: AC T I V E E N R O L L M E N T S T R AT E G Y
DON’T USE: T E C H N I C A L JA R G O N
Avoid allowing employees to default into their existing plans. Instead, require “active” enrollment to give employees a chance to make a better benefit choice (like an HSA).
Reduce the use of technical terms and choose easyto-understand language to deliver new ideas and information.
YO U R P L A N D E S I G N I S A L L S E T ! Next, to continue your plan to achieve your goal of increasing adoption, it’s time to consider how to structure contributions.
PART 2
S T RU C T U R I N G H O L I S T I C CO N T R I B U T I O N S Let’s refocus on what you can control: Attracting and retaining talent, merging health and wealth, and ensuring employee retirement readiness. If you’re going to address those, you will want to talk about how 401(k)s and HSAs work together. In this section we explore the two approaches to consider when looking at how you can use holistic contribution models to increase adoption.
MODEL 1
F U N D T H E 4 01(K )
Do the min to get the max.
Within the benefits industry, the phrase “Do the minimum to get the maximum” is often thrown out as a simple framework that employees can follow to ensure that they are saving enough in their 401(k). The basic premise is that most employers offer a company match, so employees should fund up to the match to avoid leaving free money on the table. But many employees often miss this step. You can encourage them to participate in a 401(k) and an HSA by offering a match for both. That is the beginner’s model. Unfortunately, it often results in employees contributing to their 401(k) first and then putting leftover money they can spare (which usually isn’t much) into an HSA. While this works, it doesn’t prepare employees to pay for both regular and medical expenses in retirement.
What if your employees didn’t have to choose?
11
BenefitResource.com
MODEL 2
EQUALLY FUND THE 4 01(K ) & HSA
Employee’s Choice
The intermediate model involves a paradigm shift around how to approach the funding of the two accounts. Instead of encouraging employees to put money into the 401(k) first, you can decide to give employees a sum of pre-tax funds to put toward either account. Doing so removes the limitation of funding the 401(k) before the HSA and offers employees the chance to fund each account as needed, supporting health and general expenses. It might look something like this:
The basic idea here is that if employees contribute to either tax-free account, you will provide a match. The new result? Employees don’t retire only to realize they money in their 401(k) might not cover their medical expenses. Instead, they have enough in their HSA and 401(k) to pay for medical and general expenses.
STR ATIO
NT IP
A DM I
NI
BE AWA RE OF NON-DISCRIMINATION TE S TING IMPLIC ATIONS Non-discrimination testing implications may arise if you adjust how contributions are structured. Our team can help you manage the legislative legwork to avoid errors and fees.
At this point, you have a new way to structure contributions holistically. But, even if you have the proper number of deductible plans and a new holistic contribution model, you still need to communicate effectively with employees about the HSA . How can you do that in a way that produces interest, adherence, and sustainability? We will show you how with BRI Insights in our next section!
PART 3
B R I I N S I G H T S & M E S S AG I N G S T R AT EG I E S BRI Insights is a decision support tool that individualizes the Open Enrollment process. It explains how the employee benefit plans you are currently offering work in concert with employees’ healthcare needs and goals. By incorporating input provided by the individual, employees receive highly personalized, data-driven suggestions for how to maximize contributions. This fosters a holistic benefits experience and is presented in an easy-to-understand format for a smooth and efficient enrollment.
13
BenefitResource.com
BRI INSIG HTS & ME SSAG ING S TR ATEG IE S
HOW DOE S BRI INSIG HTS WORK? Employees complete a customized guided assessment about their household, expenses, and benefits goals. Data from the assessment is converted into a personalized recommendation about benefits and funding for pre-tax accounts. It provides recommendations for health plans, and pre-tax accounts, retirement plans, wellness accounts, and more.
Through BRI Insights, employees can sit with a benefits expert even after they have left your Open Enrollment meeting or benefits fair.
14
BenefitResource.com
BRI INSIG HTS & ME SSAG ING S TR ATEG IE S
FOUR ME SSAGING S TR ATEGIE S FOR SUCCE SS In addition to BRI Insights, there are four messaging strategies that have given our clients the most success with developing a comprehensive program and increasing HSA adoption.
1
M U LT I - C H A N N E L CO N T E N T Deliver various types of content, including videos, articles, emails, and even podcasts, to raise employees’ awareness and understanding of HSAs.
P R O M OT I N G O P E N D I S C U S S I O N
2
Create in-person or face-to-face environments where employees can bring forward questions. Supplement with trainings or panels offered by third parties.
L E V E R AG I N G T E C H N O LO G Y
3
Provide education via digital formats like video and mobile, and engage decision support tools like BRI Insights to promote reduce employees’ cognitive workload and improve benefits education.
P R E- & P O S T- E N R O L L M E N T CO M M U N I C AT I O N
4
Continue engagement and education post-enrollment by providing tips on how employees can maximize their HSA . Partner with Benefit Resource to send your Open Enrollment emails during the first 90-days after enrollment that feature interactive materials including videos, guides, and best practices.
TOOLS TO ENHANCE YOUR MESSAGING STRATEGIES
1.
DRAW ON EXISTING KNOWLEDGE to bring in new concepts. For example, the general population knows what a 401(k) is. Use this as a stepping stool to market an HSA as a “healthcare 401(k).”
2.
PROVIDE SIDE-BY-SIDE EXAMPLES of savings with and without an HSA . Make sure you show examples that apply to employees at different stages (e.g., low income, single, high income, married) to increase relevancy
3.
QUIZ EMPLOYEES on different plans to promote engagement. For example, you could say “What does FSA stand for? ” (“Flexible Spending Account.”) “What does HSA stand for? ” (“Health Savings Account.”) You can also use easy to remember rhymes like “Stow it and grow it” vs. “Use it or lose it.”
CONCLUSION
B EG I N W I T H T H E EN D I N M I N D We opened with the first two habits from Stephen Covey’s “The Habits of Highly Effective People.” In section one, we covered how habit one, “Be Proactive,” can help you design an HSA plan backed by practical best practices. In section two, we discussed how a holistic approach to contributions can improve adoption rates and retirement readiness. Finally, we explored how BRI Insights and messaging strategies can engage participants and drive a deeper understanding of HSAs in section three. That’s just the beginning. Now that you’ve laid the groundwork, you’re ready to put habit two, “Begin With the End in Mind,” in action. As you begin, Benefit Resource is here to assist you develop adoption plan goals and map out measures of success. L E T ’ S S TA R T T H E C O N V E R S AT I O N !
RE A DY TO G E T S TARTED?
CO N TAC T U S TO DAY! Contact the BRI team member in your city today to schedule a free personal consultation. Email info@benefitresource.com. Benefit Resource, LLC 245 Kenneth Drive, Rochester, NY 14623-4277 BenefitResource.com
