Case study shows older workers less likely to switch health plans
- A study of one employer’s health plan offerings in 2014 and 2015 showed that older employees were less likely to switch health plans than their younger co-workers. The study, conducted by the Employee Benefits Research Institute (EBRI), also found that high-income earners with single coverage were more likely than low-income earners to switch carriers, except when the high-income earners had family coverage.
- The longer employees were in a plan, the less likely they were to switch plans or carriers. Additionally, individuals who exhibited less plan-switching made less office visits to both primary care physicians and specialists.
- The employer in question offered four plans in 2014: an HSA, EPO, PPO and HMO. In 2015, the employer added a total of six more plans provided by two new carriers, each of which offered an HSA, EPO and PPO.
In the study, most plan participants in HSAs (88%), EPOs (63%) and PPOs (72%) stayed with their current plan type, but switched to another carrier in 2015. Perhaps employees were satisfied with their plan but not necessarily with their provider, or perhaps the additional plan offerings and carriers in 2015 made them feel they had better choices within their plan types by selecting a different carrier.
On the whole, employers have shifted to high-deductible health plans (HDHPs) and HSAs as cost-saving measures. Young workers are attracted to these plans, but many don’t effectively use HSAs, which offer tax benefits. As employers make the shift, they must ensure employees understand their coverage.
A re-emerging question is how thoroughly and clearly are employers communicating their plans to employees. The overlap between some plans creates stress and can adversely affect plan and carrier choices. Employers can add more plans and carriers to their offerings, but without explaining in detail the advantages and disadvantages of plans based on employees’ needs, more options won’t matter.
As benefits managers seek to address these problems, they'll also need to consider their culture. Statistics on younger employees show they identify heavily with their employer's brand. That means health and wellness must be integral components of both their lifestyle and their healthcare options.
- Employee Benefits Research Institute (EBRI) Health Plan Switching: A Case Study―Implications for Private- and Public-Health-Insurance Exchanges and Increased Health Plan Choice
- HR Dive To engage millennials, clearly communicate benefits offerings