High-Deductible Health Plans: Should You Offer Them?
As more small business owners feel the pinch of rising healthcare costs, many have turned to high-deductible health plans. These plans are popular because they are cheaper for business owners and in some cases, they may be cheaper for employees. However, there are times when these plans can put your employees at a disadvantage. Fortunately, there are a few ways to mitigate that, and it all boils down to working with a professional who will help you design a plan that is completely customized for your business.
To help you determine whether a high-deductible health plan is right for your company, we’ll dive into the most noteworthy pros and cons. For more information on designing a customized high-deductible health plan for your business, contact our team at Beckham Insurance Group to receive a free quote.
Who Benefits from a High-Deductible Health Plan?
High-deductible health plans (HDHPs) have become an increasingly popular choice among business owners every year since the mid-2000s. For 2023, an HDHP is defined as a plan with a deductible of at least $1,500 for individuals and $3,000 for families.
Due to their lower premiums, small business owners tend to choose these plans to save money. It’s estimated that HDHPs can save employers about $900 per worker per year when compared to the cost of offering preferred provider organization (PPO) plans.
Additionally, these plans usually work well for young and healthy single employees who don’t need coverage for a spouse or dependents. An HDHP is beneficial to these employees due to the lower monthly premium that it offers. Additionally, some preventive services—like annual checkups and vaccines—are fully covered before meeting the plan’s deductible.
When a High-Deductible Plan Hurts Employees
It’s important to keep in mind that not all HDHPs are created with the same benefits. For 2023, some HDHPs can require a deductible as high as $7,500 for individuals and $15,000 for families. Additionally, while preventive services are covered at no cost, most services that help manage chronic conditions still require patients to pay out-of-pocket until they meet the deductible.
With an ill-designed HDHP, employees may resent the plan feeling that it looks like insurance, but it really isn’t due to how much must be paid out-of-pocket. Consequently, you also tend to see that plans like these result in employees reducing their use of all kinds of healthcare—including preventive services–out of fear of a surprising bill.
What You Can Do to Make Your HDHP Right
As you can see, what a HDHP offers can vary greatly from one plan to the next. To keep all your employees happy with your next HDHP, there are a few things you can do.
For one, an outsourced HR service can help you find the right health insurance plan. By working with outsourced HR, small businesses have a greater chance of finding a high-deductible plan that offers features such as an aggressive preventive drug list, covering things like insulin before the deductible. While it seems like such a thing would be considered preventive care for all plans, it is not!
You should also consider your employees themselves when designing a plan. Are your employees generally well-off or low-income? Younger or older? Healthy or living with a chronic condition? Answers to these questions will have a great impact on how an outsourced HR service designs your company’s plan.
Providing a health savings account (HSA) for your employees is another great option when offering an HDHP. As an employer, you can contribute as little or as much as you’d like to your employees. However, generous HSA benefits can help an HDHP gain more favor among employees.
Beckham Insurance Group Has You Covered
So, should you offer a high-deductible health plan? As you can see, the answer to that question depends entirely on your budget and the needs of your employees. While HDHPs may be attractive to young, healthy, single employees, the wrong plan could hurt an employee who may be dealing with chronic illness. Additionally, an HDHP is fully customizable, and you can design one that is tailor-made for your business.
At Beckham Insurance Group, we navigate the complicated world of employee benefits for you. Located in Charleston, SC, and St. Simons, GA, we are proud to offer full access to all group health and supplemental insurance markets and products! Creating a competitive benefits package that meets the needs of your business couldn’t be easier. To get started, contact us today for a free quote. We can’t wait to help you create a healthier and happier workplace!