Reality – Elusive Savings From High Deductible Plans

High Deductible Health Plans can deliver substantial savings. Yet many companies don’t get the full benefit from offering them to their employees.

Companies don’t want to harm their employees. They don’t want to pressure them. They certainly don’t want to offer them sub-standard health plans. They want to encourage employees to be smarter healthcare consumers. And they want to help employees to avoid negative consequences in their own coverage choices. Getting the balance right, between company goals and doing right by employees, takes more skills and resources than they planned for.

Simply Allowing Employees to Choose is Not Enough

The happiest employees are those who choose the health care plan options that best fit their own family and lifestyle. Yet there is a perception that High Deductible Health Plans are inferior to the health plans they are familiar with. This is a misconception.

Higher deductibles can be intimidating to an employee considering the switch. The employee rarely has the full amount of the deductible set aside in case of a major medical expense. This is why so many employees make the poor financial decision to pay a higher per-paycheck amount to avoid exposure to a higher deductible. Of course, employers can buffer this with HSA contributions, but the benefits are not obvious to employees.

Nobody Wants to Force a Change!

Companies want to help employees make their best choices. Yet few companies planned and budgeted for the additional resources required to educate employees and then custom tailor the offering to encourage adoption of High Deductible Health Plans. What is necessary is an infrastructure and dedicated staff to support every individual employee’s decision making process.

“We needed more resources and a better way to educate our diverse workforce to understand the benefits of High Deductible Health Plans. Tango’s program helped us make exponential improvements in high-deductible health plan adoption. I wish everything was this simple and effective.”

—VP of Fortune 150 Company
Tango works side-by-side with your team to provide a quality experience for every employee. Tango has the knowledge and experience to manage benefits selection for optimal results. Tango’s tools provide employees with customized data to make smart decisions. We handle all aspects of educating employees about why HDHPs can actually be their best option, so you don’t have to.

Outreach — We offer client-branded communications throughout year, customized with your plan offerings.

On-demand online training — We offer client-branded professionally produced webinars and videos to educate employees on how to use High Deductible Health Plans together with Health Savings Accounts (HSAs).

On site enrollment meeting facilitation — Our trained experts are your team. We determine, with you, the correct balance of onsite and remote presence.

Predictive modeling simulation tool — We offer access to a decision facilitation tool prepopulated with each individual’s past year data. The tool does NOT always recommend the High Deductible Health Plan option, it recommends what is right for the individual employee.

Branded high-volume call-center — Our trained experts are available via phone and email for one-on-one choice validation, support and education.

Tango delivers higher adoption, cost savings and happy employees. This is exactly what is meant by a win-win scenario.

“Our employees were able to see the value and benefits of the plans they chose. Tango provided onsite training, live customer service support, a choose-your-plan tool—pre-populated with individual employee data—and all the collateral we needed.”

—VP of Fortune 150 Company

What makes employees nervous about switching to High Deductible Health Plans?

  • Many employees believe that the most expensive health plan option is the best one, which is not true.
  • Employees assume that the lower per-pay period (commonly referred to as premium) cost of an High Deductible Health Plan must mean that some critical benefit is missing or that the network is inferior, which is not true.
  • The higher deductible of a High Deductible Health Plan can be intimidating to an employee considering the switch because they do not already have the full amount of the deductible set aside in case of a major medical expense.
  • Some employees make the financially flawed decision to pay a higher per-paycheck amount to avoid exposure to a higher deductible. This doesn’t make sense if they have a Health Savings Account (HSA).
  • For employees accustomed to a fixed co-pay for office visits and prescriptions, switching to a model where you don’t know in advance what a trip to the doctor or pharmacy will cost can be intimidating. The truth is that their pharmacist and doctor can tell them with a high degree of accuracy what the costs will be.
  • Change, of any sort, is scary. Asking employees to change without a robust education and support program is not a good idea.

Why do employees feel more confident with Tango’s Savings Optimization Program?

The Tango program is proven to increase voluntary employee adoption. How?

Tango’s engaging experts have years of experience fielding questions in on-site employee training as well as thousands of call-center conversations specific to understanding the benefits and savings of HDHPs. Here are some common discussions:

  • Health plan designers and actuaries confirm that ~80% of employees are financially better off in the highest deductible plan their employer offers.
  • Employee’s per-pay period deduction will be lower for High Deductible Health Plan vs POS or PPO plan.
  • It is a common misperception is that choosing a High Deductible Health Plan will somehow limit the providers accessible on the plan. Employees have access to the same network of providers in a High Deductible Health Plan as they would in a POS or PPO plan. They also retain the benefit of the insurer’s negotiated volume discount pricing.
  • Once the out-of-pocket limit on a High Deductible Health Plan is reached, expenses are covered for the year. PPO or POS plans continue to have co-pays even after the out-of-pocket limit is reached.
  • With a High Deductible Health Plan, the employee’s share of medical expenses may be paid pre-tax through a Health Savings Account (HSA).
  • Employees covered by POS or PPO plans may have access to a Flexible Spending Account (FSA). HSAs are superior to FSAs in four ways:
    • First, many employer make an employer contribution to employee’s HSAs.
    • Second, there is no annual use-it-or-lose-it provision for HSAs, as there are with FSAs.
    • Third, the higher contribution limit and flexible contribution timing for HSAs favor the employee in ways that FSAs do not.
    • Fourth, the funds contributed into HSAs are portable, employees will have access to those funds for the rest of their lives until they spend it
  • Annual physicals, well checks, and immunizations are free to the employee and dependents with High Deductible Health Plans.
  • In side-by-side comparisons, using actual numbers, both infrequent and high-frequency users of the health care system tend to be better off in a High Deductible Health Plan.  Infrequent users will not have to pay out their full deductible. High-frequency users will meet their deductible and out-of-pocket limit and then will pay nothing else until the following plan year.

 

“Because healthcare is our second largest expense to payroll, cost is important. Where past cost containment measures have failed, Tango’s Adoption Accelerator feature drove employees to voluntarily select a more cost effective consumer driven health plan.”

—Steve Grossi, BOK Chief HR Officer

Tango’s Saving Optimization Program delivers dramatic results with a complete turn-key outsourced approach and no additional workload for our clients. Return-on-investment begins in the first month. Tango’s solution pays for itself very quickly.

Our case study features two clients:

  1. At our Fortune 150 client* adoption increased from 16% to 52%, yielding over $100 million in savings.
  2. At our smaller client, adoption increased from 5% to 30%, yielding over $1 million in savings.

*Our client has a corporate policy that prohibits us from sharing their name in this format. However, they are happy to provide live references to peer companies interested in Tango’s services.

“For the first time in my 30+ years, we were able to reduce our year-over-year healthcare spend. With Tango, we’ve done it two years in a row.”

—VP of Fortune 150 Company

Tango Health, Inc (Tango) is an Austin, TX based SaaS company in business since 2008. Tango offers 100% outsourced solutions to take the burden off HR and benefits teams. We provide hands-on guidance and expertise to assist employees throughout the benefits enrollment process. With no additional headcount, we become your team for the project. You’ll need no training, because our expert staff, support & facilitate your program.

Tango aligns your employees’ financial incentives with the company’s by using their actual data to answer their concerns and fears. Employees are able assess their options and make the decision that works best for them. Our online individual decision support models use the prior year’s actual data so that each employee learns which plan is their best choice.

Our track record shows that given the right data and training, a majority of employees will avoid over-insuring and choose a High Deductible Health Plan. Tango’s tools simplify administration for benefits professionals and can be fully customized to your organization’s plan structure.

Our solution is a complete turn-key approach with no additional workload for our clients. And with a return-on-investment that begins in the first month for benefits, our solution pays for itself very quickly.

Tango delivers cost savings and happy employees, a win-win scenario.