Smart decisions Featured

8:00pm EDT September 25, 2009

Constant communication is one of the keys to helping employees understand the many facets of health care insurance. In order to make the right health care decisions, employees have to understand their plans’ premiums and co-pays.

Besides making proper health care choices, engaged employees can in turn become advocates for your health benefits plan.

“You create a wedge between workers and management that can result in dissatisfied employees if you don’t help your employees understand the benefits and how to get value out of them,” says Pat Nelson, director of client service at AvMed Health Plans.

Smart Business spoke with Nelson about how to engage employees to make buying decisions that will impact premiums.

What should employees know about health care premiums?

Employees need to understand the entire premium makeup and not just their contribution. For example, many employees are stunned to find out their employer is paying maybe $400 for each employees’ coverage, in addition to the employees’ $100 contribution. So it’s a $500 premium and not $100.

You also need to help employees understand any premium increases proposed by the carrier. For example, if last year’s premium was $500 and the carrier proposed a 12 percent increase, that becomes a $560 premium. But if you keep your contribution stable at $400, the employee contribution goes from $100 to $160. It looks like a 60 percent increase, when in reality it was only 12 percent. So employees need to see the whole picture.

You also need to show employees what you did to mitigate that increase. So rather than pass along a 60 percent increase in employee contribution, you may have increased hospital or prescription co-pays or added a deductible for high-tech radiology services. You kept the contributions the same, but the benefits changed a bit.

How can you engage employees to become better health care consumers?

Communicate and educate. You need to remember that not everybody will jump on the bandwagon, and different things motivate different people at different times. But you can get a head start on impacting buying decisions by providing information that’s easily understood and accessible. Provide employees a list of local facilities and the cost of selected procedures. This makes employees more comfortable to ask questions when they need health care services.

You have to have the information available. It’s like furniture ads in the newspaper. You don’t usually pay attention to the ads if you don’t need furniture. But if you do, you know there will be plenty of information in the newspaper. Just keep publishing and putting information in the same place, so if an employee is diagnosed with a disease or condition, he or she knows where to get information.

Promote the use of generic drugs to help make employees comfortable in talking to their doctors about using generics. Your physician will be vocal if he or she has a medical reason for prescribing a name brand or specific medication.

How do you take information from employees to impact your benefits and premium?

You have to listen to all employees, not just the vocal minority. Given the opportunity, most employees would gladly trade a lower monthly contribution for a higher deductible on hospitalization, because very few people are hospitalized. So you’ll impact few people if you increase hospitalization co-pays. The few people affected might be angry, but this is a better solution than increasing prescription co-pays, which affects all employees. Higher prescription co-pays might also discourage usage, and you don’t want your employees to become noncompliant because that could lead to higher medical costs.

You may want to distribute a survey to employees to find out what they like or don’t like about their benefits plan. Distribute the results to employees with annual benefits information, and make sure to tell them you were listening and what changes you made because of their feedback.

Why is it important for employees to be engaged and understand their health care?

We all use health care resources. Those who are healthy want to stay healthy, and those who are not want to be healthy. You have to keep the information flowing because we’re not all in the same state of acceptance of health at the same time. The old adage about word-of-mouth being the best advertisement is true. If you engage employees, they can engage their spouses and dependents and, before long, everyone is involved in a health care movement.

Health care isn’t the responsibility of employers, doctors, pharmaceutical companies or insurance carriers; it’s everybody’s responsibility. If you engage employees and help everyone understand more, bit by bit, everyone will become stronger and more engaged.

How can engaging employees help you control health care costs?

You do want employees to use their benefits, but you want them to understand their benefits and be able to make wise choices on when and where they receive care. If you have engaged employees, they know, for example, to go to an urgent care center or doctor’s office instead of an emergency room if they think they have a non life-threatening illness. By educating and engaging employees you help get them to the right care at the right time at the right place. That makes it a win-win for the employee, employer and carrier.