High Deductible Members Can Realize High Rewards
Employers are increasingly turning to High Deductible, or Consumer Directed, plan designs in an effort to give employees greater control of their health care decisions and related expenses. The National Business Group on Health estimates more than a quarter of employers are offering a High Deductible Health Plan (HDHP) as the only plan option in 2020.
HDHPs provide health care coverage similar to traditional plans – the difference being that they provide a greater opportunity to manage expenses and make decisions about how your health care dollars are spent. Additionally, HDHPs differ from traditional plans in the advantages they provide, including:
Lower monthly premiums – A premium is the amount you pay for your health insurance coverage every month. As part of an HDHP, members typically pay lower monthly premiums for their combined medical and pharmacy benefit when compared to a traditional plan. In 2019, the average contributions for coverage for employees in Health Savings Account (HSA)-qualified HDHPs was significantly less than the average premium contribution made by employees in plans that are not HDHPs. The worker contribution towards the premium for an HSA-qualified HDHP versus a non-HDHP was 25% and 33% less for single coverage and family coverage, respectively.
Triple tax advantage – In some cases, the HDHP may qualify to be paired with a pre-tax account called a Health Savings Account (HSA). A health savings account is a tax-exempt account offered to help pay for eligible out-of-pocket medical and prescription drug expenses – or simply left alone to grow tax-free. Like an individual retirement account, HSA funds roll over from year to year and any unspent dollars in the account are yours to keep, even if you change employers or health plans.
The specific tax advantages are:
- Tax-free combined member and employer contributions of $3,550 for individuals and $7,100 for families
- Tax-free withdrawals for qualified health care expenses
- Tax-free earnings through investment options
HSAs allow users to take greater ownership of their health care choices. They afford members the ability to plan ahead and contribute towards their account in order to cover future health care expenses.
Promote Wellness – Promoting wellness and preventing the need for future costly care are benefits of an HDHP. Many plans contribute to their employees' HSAs annually, and offer employees the opportunity to earn additional contributions by participating in wellness programs and taking actions toward improving their health.
Another way plans help improve wellness is by implementing a preventive drug list as a supplemental benefit to an HDHP. A preventive drug list covers certain prescription medications that are available for just a copayment, coinsurance, or no cost at all, throughout all phases of the benefit.
In addition, members who are enrolled in an HDHP accompanied by a preventive medication list may now have additional coverage. President Trump expanded the categories of medications that can now be considered preventive and included as part of a preventive drug list through Notice 2019-45, “Additional Preventive Care Benefits Permitted to be Provided by a High Deductible Health Plan”. The expansion allows for certain drugs that are used to treat existing conditions to also be covered at a reduced cost to the member. This includes lifesaving medications like insulin, which is extremely impactful in helping control the diabetes epidemic affecting more than 30 million people in the United States.
As high deductible health plans continue to grow in popularity and adoption, consumers are encouraged to explore the benefits of enrolling in this type of a plan and understand the number of different advantages they offer in order to take better control of their own care. Express Scripts is at the forefront of supporting HDHP members.