"We made a conscious decision that we wouldn’t dance around the issue and that we would take it head on," says Mike Vittoria, vice president for human resources. He helped Sperian Protection introduce consumer-driven health plans to the company’s 1,500 employees in 2004. "We realized that they weren’t convenient plans and we were upfront. Employees will respect that, we thought."
Like many companies, Sperian Protection, which is based in Smithfield, Rhode Island, was facing double-digit health insurance premium increases four years ago. It turned to consumer-driven health plans to help manage those costs. For the company, the new plans weren’t introduced to shift costs to employees—it still pays a hefty portion of the health bill—but to urge workers to take responsibility for their own health and to see the dollar signs for themselves, Vittoria says.
"They started to become aware that health care wasn’t free," he says. "We saw value in getting our employees involved in the cost of health care."
The company knew success entailed an extensive communication plan.
"This requires a lot of re-educating the workforce," Vittoria says. "Employees [in 2004] didn’t like it." He says the company had one employee at an information meeting say, "I should go to the doctor and just give them my card and never see a bill."
"Employees want their health care to be convenient," Vittoria says. "We’re probably the most complicated plan out there." He calls it an "HRA carved out of a PPO."
Currently, the company has both health reimbursement and health savings accounts, both of which allow employees to save for future health costs.
It presents employees with a "layered" plan deductible, in which the employee pays the first $2,250 for single coverage and the company pays all costs between $2,250 and $10,000. After $10,000, insurance picks up the costs.
It isn’t easy to grasp, and requires Sperian Protection to hold monthly meetings for employees, Vittoria says.
"We don’t do the once-a-year open enrollment meeting," he says, adding that most employees are satisfied with the high-deductible plan. "We are constantly educating the workforce."
Vittoria says a major key in keeping costs low is the company’s focus on health and wellness. To be eligible for one of its plans, the company requires that employees participate in health risk assessments to identify chronic illness that, if left unmanaged, could incur expensive trips to the emergency room.