Materials Distributor Builds Employee Support for a High-Deductible Health Plan
Dean Adelman, the Atlanta-based company’s chief administrative officer, helped introduce a high-deductible health insurance plan in 2007 that was much different from the company’s health maintenance organization plans.
Reception was difficult and that first year was bumpy, Adelman says. "HMOs are pretty much free [to employees], so it was a shock. For over 30 years we trained people to pay $10 to go see a doctor, and now we’re asking them to look at the cost. It’s been a learning experience."
The company began offering high-deductible plans to handle skyrocketing health premiums by getting employees involved in health costs and control, he says.
"Our biggest success so far has been getting people to move from brand-name drugs to generic, because they now see the cost," Adelman says.
This year’s coverage comes with deductibles that range from $1,500 to $4,500, with the company offsetting half of the deductible by depositing that amount into an employee’s health savings account. Employees add to their health savings accounts with pretax income.
Once the deductible is met, employees must pay 20 percent of all services.
A highlight of the plan is that most preventive services, such as annual physicals, are covered 100 percent. BlueLinx also offers incentives, such as $100 for taking part in a company-sponsored health risk assessment, Adelman says. The idea is to help employees catch any medical conditions early to avoid expensive treatment later, he says.
BlueLinx still offers traditional plans, such as HMOs and PPOs, but they have heftier payroll deductions and don’t feature incentives.
The first year was tricky because most employees did not understand the high-deductible plan, but this year has been easier, Adelman says. Last year, more than half of the employees who enrolled in the high-deductible plan linked to a health savings account did not spend all of the money in those accounts, which means they can save it and apply it to future medical expenses.
About half of the company’s employees are enrolled in the consumer-driven plan, and Adelman expects that to increase. "Anyone who signed up for the [consumer-driven health] plan in 2007 stayed with it," he says.
"It’s been a learning experience and we are seeing a lot of success stories. People are losing weight and getting off their Lipitor," a cholesterol-reducing prescription medication, Adelman says. Wellness initiatives have allowed employees to save on health costs and thus save their own money, he says. "In the long term, people see the savings."