Engaging Employees in Health Benefit Design Increases Satisfaction With Coverage Options

SAP Partners | <b>National Pharmaceutical Council</b>

During a case study, employees were more willing to have less robust coverage in areas like dental, vision, and diagnostic benefits so that the group could have access to more comprehensive mental health and maternity services.

As open enrollment continues, a new case study from the National Pharmaceutical Council has found that when employees are meaningfully engaged in deliberating and designing their healthcare benefits, they are more likely to have a positive view of their coverage options.

The case study was facilitated by Janet McNichol, SPHR, CAE, the human resources director of the American Speech-Hearing-Language Association (ASHA), in an effort to redesign a benefit option offered at the association. “I wanted to develop a participatory, deliberative approach to learn what employees value the most in a healthcare plan,” she explained, in a statement. “By engaging employees in health benefit conversations, it helped us to better determine how to allocate our healthcare dollars.”

These findings come at a time when more than half of insured Americans are obtaining their health insurance through their employers and are taking on more cost sharing through deductibles, copayments, and coinsurance. Between 2006 and 2016, total out-of-pocket expenses for people with employer-provided coverage jumped 54% as wages increased 29%, and annual premiums for employer-sponsored family health coverage rose to an average of nearly $20,000 in 2018.

Between June and December 2017, 171 ASHA employees participated in group discussions using a board game with 12 categories of healthcare services, including maternity, prescription drugs, and mental health, with varying levels of coverage. After creating an individual health plan reflecting their individual coverage needs and preferences, the employees collaborated to design a single health benefits plan for the organization.

During the group discussion, employees were willing to have less robust coverage in areas like dental, vision, and diagnostic benefits so that the group could have access to more comprehensive mental health and maternity services.

“This also suggests how the intensity of preferences of some members of a group for maternity or mental health services may persuade individuals in the group to acquiesce in the reallocation of scarce resources in ways not completely aligned with their individual self-interest,” stated the report.

Among the 3 age groups—young (25 to 45 years old), older (46 to 65 years old), and elderly (older than 65 years)—older employees wanted more mental health, preventive care, and drug coverage, and wanted less provider choice, diagnostics, vision, and dental coverage. Younger employees also wanted more mental health, preventive, and drug coverage, but less so than older workers.

Following the exercise, participants answered a survey regarding their satisfaction in both their individual and group health plans. They also indicated whether they thought coverage was inadequate for any service category, whether they would be willing to pay more for additional coverage and, if so, how much more they would be willing to pay.

Approximately half of employees indicated that they were willing to pay more—roughly $38 per month—for additional coverage in one or more benefit category. Survey results also showed that 92% of employees were satisfied or very satisfied with their individually designed plan, and 83% were satisfied with the group plan.

“Within a broader policy context, employee appreciation and acceptance of tradeoffs are essential to managing overall healthcare spend,” noted the report. “If employees are engaged in the deliberation process, necessary limits on coverage may be more likely to be considered ethical and accepted as legitimate and fair.”