The shift to health benefit plans that place a greater burden of responsibility on the consumer is beginning in earnest. Thanks to double digit health care cost increases, more employer groups will be unable to fund benefits programs as they have in the past. And, there is a growing realization that the only way to really control costs is through increased employee awareness and management of the cost of care.
According to the Gartner 2004 Consumer Defined Health Plan (CDHP) Survey, 100 percent of responding health plans reported that they were either currently implementing or planned to implement a consumer-defined health plan initiative within the next 12 months. How can your organization establish a CDHP program that works?
Plan Components
Consumer-directed plans typically give employees the flexibility of PPO coverage – with a high deductible – and the financial responsibilities associated with Health Reimbursement Arrangements (HRAs), Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs).
New legislation that allows tax-free health savings accounts, and the tax-free rollover of unused HRA funds will make the increased financial burden to employees easier to bear; however, it is still a bitter pill. The responsibility, and the opportunity presented by consumer-directed programs, lies with the administrator - who must provide a comprehensive educational and informational component to the employee to aid in their ability to make conscientious decisions concerning the benefits, providers and services they elect to use. They must also find a way to administer these multi-component programs accurately and cost effectively.
The Right Approach
Benefits administrators have an opportunity to capture market share before large payer organizations do so; but time is of the essence, with rapidly growing numbers of employers ready to take dramatic steps to change the manner in which healthcare benefits are purchased, and with tax regulations now favoring the development of consumer-directed plans.
A key issue is that consumer-directed offerings are highly complex, as are the regulations governing these products. Benefits administrators must ensure that these multi-faceted products can be built and administered cost effectively, integrating back-office automation efficiencies with front-office educational and decision-support tools.
An effective front-office platform needs to provide timely, personalized information to employees and other key constituents via the Internet and should support the delivery of:
- Information regarding HRA, HSA, FSA and benefit plan account status
- Links to support the enrollee decision process, including:
- Provider network
- Prescription and over-the-counter drug information and cost
- Web-based health and wellness content
- Provider cost and quality information
- Web and telephone-based health expert access
Your back-office platform needs to deliver rapid ROI by maximizing automation and auto-adjudication rates to reduce processing costs. To meet demand for HRAs and HSAs, administrators will need to be able to quickly add integrated components to the core system, rather than implementing separate processing systems for these accounts. This type of approach ensures that account balances are updated automatically and accurately, according to rules established by individual employers and consistent with IRS regulations.
Additionally, partnership with debit/credit card vendors can provide plan participants with an easy way to access their plan dollars for approved healthcare expenses, while the financial institution administers the health savings account. When all of this functionality is integrated into a comprehensive program, your consumer-directed plan has a greater chance for success.
Solutions from TriZetto
TriZetto is uniquely able to provide a comprehensive, integrated real-time solution to support the emerging consumer market – including Web-based plan information and decision-support tools; debit card capabilities for managing expenses and HSAs; and an administration platform that can determine when and how to apply HRA, HSA and FSA funds.
For a copy of TriZetto's white paper, Consumer-Directed Healthcare - Implications for the Benefits Administration Market, please click here.
