5 Tips for Brokers: How-to Sell the Cohesive HDHP/HSA CDHP

The average family health plan premium has increased a staggering 55% since 2010 and continues to rise. With employers shouldering a larger percentage of employee healthcare costs, they’re seeking alternatives like the High-Deductible Health Plan (HDHP). Doing so can help clients save $726 per employee when they enroll in a single or family plan HDHP, compared to a typical PPO. That can add up to significant savings.

Employers are sold on the cost savings. But are your clients wondering why they should offer a Health Savings Account (HSA) with an HDHP?

Learn the communication tools that will increase the rate of adoption of the cohesive HDHP/HSA Consumer-Driven Health Plan.

What is an HDHP/HSA CDHP?

A High-Deductible Health Plan (HDHP) is a health plan defined by a lower monthly premium and a higher deductible. A Health Savings Account (HSA) is a savings account that allows the account holder to set aside money on a pre-tax basis to pay for qualified medical expenses. Once paired, a qualifying HDHP and a tax-advantaged HSA becomes the HDHP/HSA CDHP.

Read more about HDHP and HSA eligibility and rules.

5 Ways to Communicate Value & Increase Consumer-Driven Health Plan Adoption

1. The HDHP remains shoppable

HSAs are health plan agnostic. Meaning that you can choose the health plan and preferred HSA provider separately. But the HDHP provider your client chooses may want to bundle the HDHP/HSA. That’s when you should pump the breaks.

Instead, lead with your HSA provider. That way, when your client wants to shop around and change their HDHP they won’t need to change the HSA as well. That’s one less benefit, and level of friction, when making changes in the future.

2. Sell the combined savings and benefits

Today, opening an HSA is dependent on whether or not someone is enrolled in a qualifying HDHP. But that may not always be the case. Until Universal HSAs, continue to sell the combined savings and benefits of the HDHP/HSA CDHP.

Here are some of the benefits:

• Health plan cost-sharing savings.
• Tax savings.
• Carriers are paying fewer claims during COVID. So, fully-insured employers offering a CDHP have lowered their fixed costs.
• Expanded employee benefits offerings for cost-conscious employees.
• Attract and keep top talent.

Learn more about the CDHP’s benefits.

3. Show, don't tell, the costs savings

Rather than stating “a CDHP can save you money,” showing your clients how much they can save is more effective.

When an employee enrolls in an HDHP/HSA CDHP, clients can cut costs in two major ways. First, by saving on HDHP premium costs per employee and second, with payroll tax-exempt (7.65%) HSA contributions. Employees who enroll in an HDHP/HSA CDHP can save your client roughly $879 per year. That’s a combined $724 in healthcare premium cost-sharing and $155 in payroll tax savings. Here’s how.

Annual Premium Cost Savings Per Employee

Clients can save an average of $726 per employee when they enroll in a single or family plan HDHP, compared to a typical PPO. That can add up to significant savings.

2020 Average Annual Employer Premium Contributions Single Coverage, by Plan Type

2020 Average Annual Employer Premium Contributions Family Coverage, by Plan Type

Employer Annual Payroll Tax Savings

Payroll tax-exempt HSA contributions can add up to big savings. The average employee HSA contribution was $169 per month or $2,034 in 2019. Employee HSA contributions of that size provide employers a savings of $155 per employee. Depending on your client’s company size, HSA contributions could add up to big savings.

Discover how much your clients could be saving.

4. Use clear, attractive visuals to communicate CDHP savings

Avoid routinely relying on lengthy benefits brochures with overwhelming text. Mix-it-up and use clean, attractive visuals to help get your message across.

Creating your own materials? Here are a few best practices for presenting your message:

• Present the most important information first
• Don’t give too much information at once
• Provide plenty of white space between sections and along margins
• Use plain fonts and plain language
• Break-up text with bulleted and numbered lists, and headings
• Use visual aids, infographics, or multimedia to help visual learners understand different concepts

Not creating your own materials? Depend on a partner, like Lively, to assist. We have resources and tools to help you, your clients, and employees save time year-round.

5. Pitch the HSA’s safety net & retirement benefits

Amidst our national health crisis, financial anxiety is running high. 81% of employees are experiencing some level of financial stress and lack an emergency safety net. At the same time, 73% lack a game plan for retirement. That should worry your clients because stressed-out employees have higher turnover and absenteeism. And lower job satisfaction and productivity levels.

HSA contributions enable employees to build a health safety net while building their retirement nest egg. One of the key benefits of an HSA is that the contributions stay with the employee. Whether they originated with the employee or the employer, the employee owns them once they are contributed.

And providing an HSA for employees tends to increase their “stickiness” and decrease their chance of leaving their job. So, not only is it good for the employee’s financial wellness, but it’s good for retention and your client’s bottom line.

Want the entire how-to guide for selling the benefits of pairing an HDHP and HSA? Download “How to Position the HDHP/HSA for Employers.”