The DataPath voice

Introduction

The Consumer Driven Health Plan market has exploded. With this explosion comes the responsibility to wade through the information of more than 150 banks and over 80 carriers offering the best plan or service. However, what can result are several different administration companies that handle different pieces of your benefit packages. There is a better solution: the CDHP Administrator. But, what exactly is this and why is it an advantage?

The CDHP Administrator provides benefit administration for all complementary resources of the CDHP: HSA, FSA, HRA, as well as COBRA. The CDHP Administrator is not the insurance company, and is not housed within this establishment. The CDHP Administrator coordinates service providers from Plan Design, Implementation, Enrollment, End-to-end Administration, Employee Education, and HR Support. Further enhancing this all-inclusive advantage is the availability of electronic EOB services and credit or debit cards to help with out-of-pocket expenses.

Complimentary Benefits

Due to the many Regulations that govern them, the layers of the CDHP must work in concert. Imagine how confusing it would become if your HRA, HSA, and FSA accounts are handled by different administration companies. Since these benefits work together, there would be times that a claim would need to be faxed to more than one place in order to utilize benefits correctly. If you add another administrator for COBRA, the administration nightmare increases. If one CDHP Administrator handles all resources, you have now eliminated this administrative headache and have one contact for all questions.

Electronic EOB Services

Even the smallest benefit administration companies will see hundreds of faxed claims daily during business hours. This equates to workers spending time away from their jobs to fax claim forms. Employees will generally follow this fax with an e-mail verifying receipt. This could easily be 15 to 20 minutes that the employee spends away from his or her job. This break in productivity is both distracting and unnecessary. Electronic EOB services, provided by your CDHP Administrator, can stop this time-consuming process. The carrier or Health TPA, who receives and processes the health service claim from the medical provider, sends the electronic EOB directly to the CDHP Administrator who adjudicates the claim. The resource is then applied accordingly. This process cuts wasted time and guarantees that the employee’s resources are properly administered.

Electronic EOB services also provide a more comprehensive view for the employee to see how his or her resources are utilized. The employee accesses the information online, beginning with the EOB and drilling down through the reimbursement accounts to see how each benefit was affected by a particular claim. And, all of the information is conveniently located online.

Debit and Credit Card Solution

To employees without a debit or credit card solution, there is the feeling that their pocketbooks are receiving a double-blow. They have a reduction in pay and still pay for the services when they are incurred. In order to see any benefit, employees must send claim forms and receipts to receive reimbursement. Through the CDHP Administrator, the debit and credit card solution is available. Since the debit card is directly tied to the benefit, the employee must no longer produce out-of-pocket money to pay for expenses. Since the credit card advances funds to cover the current expenses of a high deductible during the initial build-up of the HSA funds, an employee does not need to worry about how he or she is going to pay for the expense. The HSA funds can then be drawn to pay the balance on the card.

CDHP Intervention Can Overcome Fears

Many fear their CDHP Plan because they do not understand it. Indeed, these plans can be complicated. The time and resources needed for the employer to educate employees is often more than a company can spare, not to mention the loss in productivity of the workers who attend the training. The outcome from less than ideal training is dire. Misunderstanding breeds fear. Fear breeds anger and disappointment, which lead to low morale and productivity.

The CDHP Administrator provides the steps necessary to facilitate a smooth process. An employer can expect the following process from a comprehensive and competent CDHP Administrator:

1. Obtain employer benefit objectives (i.e. better fiscal management, behavior)
2. Design menu to obtain objectives
3. Implement strategy with pre-enrollment material
4. Complete enrollment while providing education
5. Hold group post-enrollment meetings
6. Hold individual post-enrollment meetings
7. Provide continuing support for both employer and employees
8. Administer the benefits throughout the plan year
9. Follow-up with the employer on a regular basis for evaluation of services
   

Case Study: Airetech Corporation

In 2005, Airetech Corporation, an Arkansas based employer with 47 employees, implemented an Employee Health Plan Menu. From this menu, the employee could choose from three different high-deductible plans. Each plan option was designed to benefit the employees in different ways by providing diversity in out-of-pocket expenses and deductible amounts. This shows how one HDHP HSA-qualified policy from one Carrier plus the CDHP Administrator can create 3 or more different plan options.

2005 Employee Health Plan Menu

Due to the education of benefit plans, the employees greeted the options with a significant amount of gusto. In fact, none of the employees elected the plan with lower deductibles and co-pays. (See Figure 1).

With the help of the company’s CDHP Administrator, DataPath Administrative Services (DPAS), Airetech was able to engineer a plan that not only saved them money, but also allowed their employees a feeling of control.

Airetech Inc.
Financial Performance Report
2005 Benefit Plan Year (1.1.05–12.31.05)

With the 2006 enrollment year, the company migrated to the 2nd phase of their multi-year benefit strategy without a new carrier or applications. They phased out Plan A, and carried over both Plan B and C from the previous year. They also included a new plan, Plan D, which had the same employer contributions as 2005’s Plan C, but had a higher deductible. This plan allowed the employees to elect the maximum HSA contribution allowed by law. You will notice the shift as the employees became even more comfortable with the CDHP model (See Figure 2). This plan allowed the employee to assume more control while still providing more benefit.

Figure 2: 2006 Elections

According to Martha Capps, HR Manager for Airetech Corporation, “Making the change from conventional insurance coverage to a consumer driven health plan took a commitment from the employees as well as management. It wasn’t always painless, but we had DataPath with us at every step of the learning process. At the end of the year we could look back and see that we had successfully provided health insurance for our employees and their families, added a wider array of coverage than we had ever offered before, and still saved premium money. The fact that much of the money that would have gone to premium payments in a conventional plan, was now in the HSA accounts of employees made our “pioneer” year worth the effort.”

Conclusion

The CDHP Administrator provides guidance, support, education, and security for the Employer and Employee. The CDHP Administrator can provide the security that comes when one knows that he or she has options and flexibility. If any one of the service providers is not performing, (i.e. increasing insurance rates) the individual should replace that component, not the whole infrastructure. The CDHP Administrator can provide the autonomy that is necessary to facilitate the most advantageous CDHP Plan. It is important to know if the administration is handled by the same entity and who are the partners (i.e. custodian, card provider, etc.)with whom you they are dealing.