Help Employees Pick the Right Health Plan ... Right Now!

September 27th 2017 | Tim O'Shea

Many employers are nudging their employees to be savvy health insurance consumers through strategies like expanded choice of plan options, defined contribution funding, HSA education and cost transparency tools. But relatively few employers have taken the leap to a private exchange as their delivery model. We are learning that many elements of an exchange experience can be effectively realized without necessarily moving to a private exchange platform, where an employer might lose more flexibility than it is ready to cede.

One of the critical elements in benefits consumerism is health plan selection decision-support, which can be implemented easily, quickly and inexpensively without disrupting current platforms or administrative processes, a potentially valuable capability for midsized employers looking to push down the consumer-driven path.  Decision support is vital as consumers select among more plan options and encounter increased complexity in plan design and spiraling costs that eat at the family budget. Studies indicate most consumers choose poorly; random selection would be as or more effective.1, 2 So offering a consumer-friendly decision support tool might save employees significant money in the coming plan year. And if employees feel they’ve made an informed choice of plans, they are more likely to take ownership for making that choice work.

We’ve been evaluating employee use of decision support for 3 years, and have identified 4 critical success factors for decision support models. These factors are consistent with how employees might view support for other major purchases, like buying a car, finding the right mortgage, or most importantly, picking a fantasy football team! Here are the 4 key factors for effective health plan decision support:

  1. Speed and ease of use is paramount - avoid questions that require research, estimating or calculations. Effective decision support does not create work or waste time. The tool should take less than 5 minutes so that 50% or more of employees actually use it.
  2. Consumers need to understand total expected cost of medical care to make a rational selection. Total cost is employee’s share of premium plus estimated out-of-pocket cost for each plan option, taking into account variances in copays, deductibles, OOP maximums, etc. Accurate forecasting of OOP cost, while keeping the user experience quick and easy, is the holy grail of health plan decision support.
  3. Decision tools must be accessible, mobile friendly and adaptable for family discussions or counselor / enroller support. Output must be informative but not overwhelming. Good tools don’t make a blanket recommendation but provide relevant information to provide a ranking of best to least fit, with supporting evidence.
  4. Above all else, decision support models should create consumer peace of mind – the feeling you get when you think you know what you are doing. So the model must be unbiased, credible and independent. Models that lead the consumer to consider purchasing ancillary products may not have the rigor to make the right health choice.

Health plan selection is not getting any easier for consumers. Yet the technology is available now to help the consumer today at a cost that is less than a rounding error in total health premiums. Why not give your employees access to an exchange-like experience now?

  1. Can Consumers Make Affordable Care Affordable? The Value of Choice Architecture” Johnson, Hassin et al.
  2. Do Employees Make Sensible Health Insurance Decisions?....” Bhargova, Loewenstein, Sydnor et al.

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