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Humana Asks Employees to Do the Math to See the Value of Consumer-Driven Health Plans

July 31, 2008
Even a company that sells health insurance had a tough time moving its employees from traditional offerings to complicated consumer-driven health plans.

The human resources experts at Humana Inc. say times were tough in 2000 when the insurer, which is based in Louisville, Kentucky, overhauled its plan designs. Employees were confused and, at times, angry when they saw that the change would force them to pay more attention to the cost of care, says Debbie Triplett, human resources director of associate benefits programs and policy.

"We have so many people [in our workforce] who do not touch health care as part of their jobs," she says. "We couldn’t assume all the company’s employees would know everything" about consumer-driven health plans.

A leader in the movement, Humana began offering high-deductible health plans, which came with lower payroll deductions and hundreds of dollars in wellness incentives, as an option for employees to help the company fight double-digit cost increases.

"We saw health care robbing the company budget for other programs, so we took action," Triplett says.

A "not so surprising" 6 percent of employees signed up that first year for the high-deductible plan, which had a lower premium than other plans, she says.

Employees at the time were unfamiliar with consumer-driven health plans, Triplett says.

Early adopters

Triplett and Tray Cockerell, Humana’s human resources business leader, took a closer look at the figures and saw that mainly accountants and actuaries were the first to make the switch.

"They are the ones that took the information and did the math," Cockerell says. "They ran the numbers and saw that if they were healthy, they could benefit. We want all our associates to do the math. Those who do the math will choose a consumer-driven health plan easily."

In 2001, 18 percent signed up for the second year of Humana’s high-deductible plan, Triplett says. That figure grew gradually until this year, when the consumer-driven health coverage became employees’ only option.

Humana, which self-insures health coverage, offers its 26,000 employees nationwide one plan with varying deductibles that range from $1,200 to $6,000 per year. The higher the deductible, the lower the payroll deduction, she says. Plans are linked to HSAs.

All plans come with incentives, such as wellness programs, to help employees cover their deductible, Triplett says. Employees who stay healthy often see the plans as a way to save more in their health savings accounts.

"We believe in consumerism and getting our associates to think about health care the same way they think about buying a TV," Cockerell says, adding that employees will pay attention to the cost of care the same way they would in buying anything else.

Changing thinking, however, hasn’t been easy, Triplett says. To help employees better understand the program, Humana has regular meetings and has enlisted selected employees to act as "health mentors," go-to people from whom puzzled employees can get answers.

Humana also has used meetings and feedback sessions to enhance its program.

Part of the program is a Web site, Family Health Budget, www.familyhealthbudget.com which provides access to calculators to help determine health care costs.