Christine Cooper, the CEO of aequum LLC and the Co-Managing Member of Koehler Fitzgerald LLC, a law firm with a national practice along with Jack Towarnicky an ERISA/Employee Benefits compliance and planning attorney, having over forty years of experience in human resources and plan sponsor leadership roles again joins eHealth Radio and the Healthcare and Legal Channels.
Listen to interview with host Eric Michaels and guests Christine Cooper & Jack Towarnicky discuss the following:
Painful mistakes you and/or your employer should avoid at annual enrollment.
Eric: Number 10 – Christine, what’s number 10?
Christine: Number 10 is an employer mistake. It is the employer who fails to offer workers a choice of coverage. Regardless of the size of the employer, the employer should anticipate a diversity of medical coverage needs, today, AND tomorrow! At a minimum, the employer should offer at least two choices, typical would be a PPO and Health Savings Account capable options.
Eric: Who has number 9? Jack?
Jack: Number 9 is also an employer mistake. It is the decision to use a passive process. Passive means that the worker’s existing coverage will continue unless they take action to review the options and make choices. The annual enrollment process should prompt individuals to make affirmative elections – even if it is the same choices, year after year.
Eric: Interesting, so what is Number 8?
Jack: Number 8 is another employer mistake. It is the failure to adjust the coverage comparison so the differences, especially the differences in provider networks and costs are apparent, obvious. For example, where a HSA-capable coverage option is offered, the employer often fails to adjust the deductible for the other choice, typically the PPO, so that the deductible for the PPO applies in the same way. Bottom line, once you have a good idea about your expected utilization, if you must spend more than 5 minutes looking at a side-by-side comparison, that means that the differences aren’t obvious, or that the comparison has too much detail.
Eric: OK, three strikes and the employer are out. So, our audience now knows that the employer should offer a choice of coverage, and at least one of the options should allow the worker to save in a Health Savings Account. The employer should have an active enrollment process, not a passive process, where workers must make affirmative elections of coverage. And the side-by-side comparison should be clean and clear enough so that a worker who knows what they expect to spend on medical can make a decision in less than 5 minutes. OK. So now we have some ideas about what you might ask your employer.
Eric: What’s next? What’s Lucky Number 7?
Christine: More like unlucky #7. Number seven is bias. We let bias affect our decisions. We tend to make decisions by relying on heuristics, or rules of thumb. One example is where people might think Expensive is Better … that the coverage with the smallest deductible or the highest contribution must be the better choice – even though I don’t anticipate any significant medical expenses.
Eric: With six you get egg roll! You could look it up. What is number six?
Jack: Over insurance, you paid too much! Or, as one insurance company motto says, only pay for what you need. Over insurance can result by focusing too much on monthly or per payday costs (what is affordable) versus an estimate of all costs for an entire year. Bias also causes workers to overestimate the likelihood of easy to imagine outcomes, or recent events, what some call the availability heuristic – for example, a coworker who suffered an illness or injury. People sometimes fixate on “what if?” As in what if I need surgery?
Eric: What is five?
Christine: Uncertainty. Uncertainty tends to result in opportunity losses. There is a lot of uncertainty in predicting medical utilization. But, for almost everyone, medical spend increases with age. So, the time to save is now, because our out-of-pocket expens
