9 Employer Best Practices for High Deductible Health Plan Design

Employers are exploring ways to promote effective high deductible health plan benefits utilization among members, as noted in a report from the National Pharmaceutical Council (NPC) and Gallagher.

“While many employers are taking a more proactive approach to managing employee health benefits, there are opportunities to implement additional HDHP good practices to create health benefits that deliver even greater value to the employer and the employee,” said Kimberly Westrich, one of the report’s authors and vice president of health services research at NPC.

The researchers did a literature review to gather insights on potential high deductible health plan best practices. They then honed the list by conducting interviews with over 20 healthcare stakeholders and combined these insights with the results of a survey of 50 large employers.

Employers either agreed or somewhat agreed on nine principles of high deductible health plan design that help employees optimize their benefits.

Employees may not realize that their consumer-driven health plans, which are high deductible health plans paired with one of four types of savings accounts, can meet needs beyond healthcare utilization, particularly in health savings accounts (HSAs).

In order to make sure that employees leverage these benefits to their fullest extent, the employers’ first recommendation was to provide ongoing education. Ongoing education can help inform employees of other potential uses for HSA funds, such as retirement advantages. 

However, while nearly every respondent (98 percent) agreed or somewhat agreed that this was a strong principle for high deductible health plan design, 28 percent of those who agreed had not actually put it into practice. Seventeen out of 33 employers said that ongoing education was among the top three high deductible health plan practices that they would recommend.

Second, the employers recommended using real-time pharmacy tools in order to improve drug price transparency. Nearly half of all employers who recommended this option (46 percent) had not actually implemented the solution in their own environment, even though 98 percent agreed or somewhat agreed that it was a good practice.

Third, employers can encourage workers to use preventive care services by covering preventive care medications pre-deductible. This is a benefit that employers can leverage with HSAs under federal law. 

Employers and healthcare stakeholders were generally confident that high deductible health plan enrollees understood their pre-deductible coverage options (80 percent). However, separate studies have found that high deductible health plan enrollees may need better education on how to leverage their HSA benefits.

Almost all employers agreed or somewhat agreed that this strategy was a good practice (96 percent). Less than three-quarters of the participants were implementing the solution at the time.

Of the five good practices that employers recommended prioritizing, pre-deductible preventive care medication coverage ranked fairly low. No respondents considered it the most impactful approach, compared to options such as offering HSAs.

Fourth, employers can offer price transparency tools to estimate healthcare costs outside of pharmacy products. More than nine out of ten employers agreed or somewhat agreed that this strategy was good practice (94 percent).

Two-thirds already offered price transparency tools for non-pharmaceutical products and services. However, almost three in ten of the employers who found this to be a useful approach (28 percent) were not using this strategy.

Fifth, employers emphasized the impact of offering HSA contributions. More than nine out of ten employers agreed or somewhat agreed that offering HSA contributions was a good strategy in high deductible health plan benefits. Out of 35 employer respondents who ranked the impact of offering HSA contributions, 28 employers ranked this strategy as the most impactful.

This approach was also one of the most commonly implemented. More than eight in ten employers offered HSA contributions with their high deductible health plans.

The remaining four strategies largely revolved around HSAs and HSA contributions.

Sixth, employers supported offering an investment option within the HSA. This recommendation had the most widespread implementation: 84 percent of employer respondents had offered an investment option as part of their HSAs.

The seventh recommendation was not tied to HSAs. Employers suggested giving employees the option of a separate plan design that was not a high deductible health plan.

Eighth, employers agreed or somewhat agreed that employees should be able to acquire more HSA contributions based on certain actions, although 44 percent of those who agreed with this option were not implementing it at the time. It was one of the least-implemented recommendations.

Lastly, the employers suggested front-loading HSA contributions, a practice which two-thirds of employers supported.

Most employers found that high deductible health plans can produce moderate or strong outcomes on reducing pharmacy and medical spend and incentivizing preventive care utilization. But respondents acknowledged that high deductible health plans can create heavier financial burdens for certain employee populations due to high out-of-pocket healthcare spending.