Valuable Information

Employers Need to Ensure Employees Are Financially Prepared for High-Deductible Health Plans

According to new research by the Commonwealth Fund, high-deductible health plans often trigger financial difficulties and cause members to forgo needed care.   Results of the survey are based on responses from 4,052 adults polled nationwide covered by high-deductible health plans.

Approximately 49% of adults with high-deductible coverage have debts or problems in paying medical bills, compared to just 31% of those covered by lower-deductible plans. Furthermore, individuals with high-deductible plans are more likely than those with lower-deductible plans to leave a prescription unfilled or skip a medical test, treatment, or follow-up when needed, due to cost, the organization reports.

"Health savings accounts coupled with high deductible health plans have potential pitfalls, especially for families with low incomes or individuals with chronic health conditions, who are at greater risk of accruing burdensome medical debts and facing barriers to needed health care," said Commonwealth Fund President, Karen Davis. "The evidence is that increased patient cost-sharing leads to underuse of appropriate care."

With many employers evaluating Health Savings Accounts (HSAs), what questions should employers consider to make sure their employees are ready for a change?

1. Will the employer contribute to the HSA on behalf of the employee? If not, what happens to employees who cannot afford to save into a HSA?
2. Will the employer offer a HSA alongside of a traditional major medical plan?  Giving employees a choice of plans should reduce the stress associated with such a large transition.
3. What is the average income of the company’s employees? Lower income employees have less money to save in HSAs and could be impacted the most by an unexpected medical claim.
4. What is the participation rate in the company’s retirement plan?  While certainly not an accurate measure, employers with low retirement plan participation should expect similar results with a HSA plan.

While HSAs have been proven to cut down on unnecessary medical care and reduce frivolous claims, thoughtful employers need to consider how a high-deductible health plan will impact their employees’ financial lives.  Financially stressed employees make for unproductive employees.