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With healthcare costs rising and self-insured employers exploring cost-containment strategies, those in the benefits industry are trying many tactics to keep spending under control. Whether it’s network steerage, formulary management, or wellness engagement, these tactics are the key to better, more efficient benefits for members. One common practice that’s gained momentum? Account-based health plans (ABHPs).
What are account-based health plans? These plans are like peanut butter and jelly, cheese and crackers, or steak and potatoes: they’re the perfect pairing a health insurance plan plus some form of medical spending account. The idea is that employers can save on overall healthcare costs, help members save for out-of-pocket costs, and do it all with pre-tax dollars.
One common form of ABHPs is the high-deductible health plan + HSA. We’ve written about this type of benefits strategy in the past, and while some employers see this as a way to push costs to employees, others are funding HSAs and contributing to out-of-pocket costs to avoid burdening members. If used thoughtfully, ABHPs can be a cost-saving measure for both employers and their members.
Willis Towers Watson’s annual Best Practices in Health Care survey showed some surprising data around account-based health plans. Employers reported the following:
There are a number of ways that employers can structure ABHPs to maximize their efficiency and minimize disruption to employees. Here are a few ways they’re doing it:
Willis Towers Watson suggests some helpful best practices when considering ABHPs, including offering plans that still emphasize affordable premiums, employer contributions to HSA or HRAs, and support/communication around financial wellness. We’d offer a few other thoughts to help employers make the most of an account-based health plan strategy.
While HDHPs and HSAs are great for some employees, others will be more comfortable with lower deductibles and more traditional plans. By offering employees a number of choices, you’ll attract and retain talent while still impacting your bottom line.
Some of these types of plans are also subject to federal regulation, healthcare policy, and other restrictions (and contribution limits/tax rules change frequently). Employers who offer ABHPs need to carefully follow the changing winds in Washington.
It’s crucial with ABHPs to track, measure, and act on your health plan data. To ensure these plans are truly meeting the needs of members, employers will want to keep an eye on employer per member spend, member out-of-pocket spend, provider efficiency, financial wellness, and more.
A benefits analytics partner is the key to finding insights and making strategic changes that save both employers and employees money.