|A Good Fit for Hospitality Employers?
Hospitality HR professionals followed by the House of Representatives and later the Senate have been seeking ways to de-escalate health cost growth. One strategy gaining significant traction in recent ACA repeal action is the notion of providing employees with cost info and incentives to become more prudent health care consumers with better health results. Brilliant!
High Deductible Health Plans (HDHPs), Health Savings Accounts (HSAs) and Health Reimbursement Accounts (HRAs) were designed for just this purpose.
While these plans and their promised savings have been available for several years, Hospitality employers initially resisted. Why?
Not understanding how the plans work (both from a language and cultural standpoint).
Signing up for the lower premium plan only to realize they did not have the savings in place to handle the high deductible; or, rationing care for the same reason.
Frustrated or overwhelmed by online systems that were patchy or not linked.
Disappointed with transparency tools and support services that were pretty much nonexistent.
Fast forward to today… Hospitality Benefits’ benchmark data shows 66% of hospitality employers offer at least one HDHP, with 32% offering only HDHPs.
Tools, services, and transparency have come a long way. Online tools are more comprehensive and user-friendly. And some providers, like Hospitality Benefits, are complimenting user-friendly technology with high touch concierge services designed expressly to educate, guide and assist the diverse, multilingual workforce in right fitting and optimizing healthcare utilization.
Given the potential for financial and design flexibility upside, consumer-driven healthcare merits serious consideration. So over the next several weeks, we will revisit health savings vehicles (HSAs and HRAs) and consumer support services.
But First, Alphabet Soup Deciphered…
HDHPs – High Deductible Health Plans have lower premiums than traditional plans but participants must first meet a high deductible (minimums ranging from $1,300 individual to $2,600 family) before the plan pays for services outside of preventive care.
HSAs – Health Savings Accounts are savings vehicles where employees can accumulate funds to pay for current and future health-related expenses. HSAs require a qualified HDHP. Employer and employee contributions are tax free when used for health-related expenses. Contributions rollover each year and are portable (HSAs remain with employees upon termination). Contributions are subject to federal annual maximums.
HRAs – Integrated Health Reimbursement Arrangements resemble HSAs except unused funds remain with the employer at plan year-end and upon termination. HRAs also require a qualified HDHP, but are not subject to federal annual contribution maximums. Employers can limit categories of IRS approved expenses.
While the decision to offer a consumer driven health plan will vary by employer, we want you to know that we have successfully assisted hospitality employers, large and small, implementing consumer-driven plans that include communication services and transparency tools, fortified by decision support analysis, design strategy, and reporting.
If you would like to learn more about the potential financial upside and whether this approach is a good fit for your workforce, please email email@example.com or call 703-810-3800.