In a recent blog on private health exchanges, we outlined the basics of this innovative
At HNI, we practice what we preach! We embraced this new approach for our own health offering to employees this year and are already beginning to see the benefits.
To illustrate how a private health exchange works, I wanted to share a little about our plan structure and experience with this approach.
HNI pays a set dollar amount for those enrolled on our health insurance plan, depending on whether the employee elects individual, employee + spouse, employee + child, or family coverage.
On the HSA plan with the highest deductible, what HNI puts in is actually more than the cost of the premium. If employees choose that plan, they get the difference deposited to their personal Health Savings Account (HSA) to save for a rainy day.
The company also contributes $1,200 annually to an HSA or Health Reimbursement Account (HRA) for those who choose not to purchase health insurance through HNI. This is a benefit greatly appreciated by those on a spouse's plan.
HNI offered 6 types of plans through our exchange platform to offer the broadest possible choice to employees. We made 3 HSA-qualified (high deductible) choices available, with deductibles ranging from $2,500 to $4,000 for single coverage and from $5,000 to $8,000 for families.
We offered 3 traditional insurance options with lower deductibles as well as office and prescription co-pays. Because these types of plans cost more, the employees who desire this kind of plan structure pay a higher percentage of the premium than those who choose higher deductible plans. The rationale of this was easy to understand and explain to employees.
HNI has four locations:
To start with, we made this available to 2 of our four locations. Next year, we are looking at moving our other offices to this model as well.
We are continuing to build a culture of wellness at HNI with a variety of wellness programming. This year, however, we have shifted the emphasis to results rather than participation.
HNI contributes up to $1,000 to employees' HSAs or HRAs through the wellness program, and this year half of that contribution was tied to results achieved on a health risk screening. The other half can be earned by tracking activities like healthy eating, exercise, and other wellness activities.
Employee benefits can be really confusing. Sorting through deductibles, copays, coinsurance, premiums, and the like is a headache when you’re choosing between a couple of plans, much less 6 -– so we knew we had to make the choice as easy as possible for this plan to win the approval of our employees.
The online decision tool we implemented walked employees through a series of questions to help employees select the plan that works best for them. It asked them questions about plan preferences, what kinds of health events they expect in the coming year, and what their utilization of benefits was like in the past year.
The questions posed were designed to gauge attitudes toward health care without asking any questions employees wouldn’t know how to answer. For example, it asked "If $1,500 in medical bills rolled in next week due in 60 days, do you have the money to pay for this?" This is another way of helping a person determine whether a high deductible is plan right for them and probe risk tolerance.
People like having options and choices – and our employees are no exception. The private health exchange we’ve implemented has received very positive feedback to date. The fact that they have options to choose plan and premium is seen as a benefit in itself.
Our diverse employee population covers 4 states and ranges from age 23 to age 67, so offering a one-size-fits-all approach just wasn’t going to cut it. The new private health exchange has allowed people the flexibility to choose what works best for them.
Those who have utilized our benefits heavily in the past still have the option to select a plan design that meets their needs. Those who don’t utilize many health care services are actually receiving a premium rebate deposited into their health savings accounts – building up a safety net for when they do need to seek care!
The primary reasons we implemented a defined contribution health plan were a) to better manage our healthcare spend and b) offer richer benefit options to our employees. We did, however, find a few additional perks we didn’t expect right off the bat:
We’re taking on this topic in our next HNI University event, Private and Public Exchanges – A Whole New Marketplace for Healthcare on May 16th. Attend this workshop for a better understanding of defined contribution strategies and exchanges - public and private - and how these options might affect your benefits strategy in 2014 and beyond.
What do you think of this emerging health care model? Have any questions? Comment below and let us know!