High-deductible health plans reap big savings while sowing cash to help workers change their waysReprints
While LafargeHolcim U.S.' move to high-deductible health plans last year shifted substantial costs to U.S. plan participants, the building materials manufacturer also took steps to ease that financial burden.
Under one of the new plans, HealthChoice, the annual deductible for single coverage is $2,600, while the deductible for family coverage is $5,000. Once deductibles are met, the employee picks up 30% of claim costs, up to an out-of-pocket maximum of $6,500 for single coverage and $13,000 for family coverage.
The other plan, HealthChoice Plus, has a deductible of $1,750 for single coverage and $3,500 for family coverage. After that, employees pay 20% of out-of-pocket expenses up to a maximum of $5,750 for single coverage and $11,500 for family coverage
Previously, the company offered traditional preferred provider organization health coverage with little or no deductibles and flat dollar copayments, said Philia Swam, LafargeHolcim's U.S. manager of health, wellness and group benefits in Chicago.
While earlier plan changes had brought down annual cost increases to an average of 4.7% from 2007 to 2014, from 13.3% from 2001 to 2006, more changes were needed to reduce LafargeHolcim's exposure to a health care reform law provision that imposes a stiff excise tax on plan premium costs that exceed certain levels, Ms. Swam said. In 2015 alone, the plan design changes saved LafargeHolcim $5.4 million.
At the same time, LafargeHolcim added features to reduce employees' cost burden.
For example, the company contributes up to $650 to the health savings accounts of employees who get screened for certain conditions. That same $650 contribution also is available to employees' spouses who have the screenings.
HSA contributions also provided for employees who engage in other health-related activities. For example, employees and spouses who participate in a company Get Active program are each eligible for up to a $300 HSA contribution, while a $150 HSA contribution is offered to pregnant plan participants who complete an Aetna maternity management questionnaire within the first 16 weeks of pregnancy, and a $75 HSA contribution is provided to employees participating in an Aetna program that counsels those with chronic problems, such as high blood pressure.
LafargeHolcim purchases stop-loss insurance from Aetna that covers individual claims that exceed $2 million and self-insures claim costs below that amount.
“We elect to have a high (stop-loss) threshold because most of our high-dollar claimants usually peak at about $500,000 to $750,000 for catastrophic incidents,” Ms. Swam said. “We prefer to pay a lower stop-loss premium and accrue the cash reserves ourselves.”
Shifting to high-deductible health plans was the “right decision for our benefit plan strategy of continuing to change employee/family consumer behavior, and (we) decided that implementing HSAs would help our employees save money for health costs that occur today and in the future,” Ms. Swam said.