For many Indianapolis employers, the annual benefits renewal cycle presents a difficult choice. To control rising healthcare costs, an increasing number have turned to High-Deductible Health Plans (HDHPs) as their primary—or only—offering. The logic is simple: lower premiums for the company and, seemingly, for employees. But this affordability can be a mirage. When not designed thoughtfully, an HDHP-only strategy can inadvertently shift financial burdens onto your employees, leading to delayed care and significant medical debt.
The solution isn’t to abandon HDHPs, but to design smarter benefits lineups. By using strategic plan design levers, you can preserve affordability while protecting your employees’ financial well-being and encouraging them to seek the care they need. This approach transforms your benefits from a simple cost-containment tool into a powerful support system for your workforce.
The Pros and Cons of HDHPs
High-Deductible Health Plans have become popular for a reason. They offer clear advantages, particularly in their low monthly premiums. Paired with a Health Savings Account (HSA), they provide a tax-advantaged way for employees to save for medical expenses. For a healthy, financially savvy workforce with a good income mix, this combination can be a win-win.
However, the pitfalls are significant. The high upfront out-of-pocket costs can be a major barrier to care. Faced with a $3,000 or $5,000 deductible, an employee may delay a necessary doctor’s visit, skip a recommended screening, or fail to fill a prescription. This deferred care can lead to worse health outcomes and higher-cost catastrophic claims down the road. For employees living paycheck-to-paycheck, an unexpected medical event can quickly become a financial crisis, creating stress that harms both their well-being and their productivity.
Strategic Levers for a Smarter Plan Design
Defaulting to a standard HDHP is a missed opportunity. You have several levers at your disposal to create a plan that works for your employees, not against them.
- Meaningful HSA Contributions: Seeding employees’ HSAs with a significant employer contribution is one of the most effective ways to lower the initial financial barrier. This “first-dollar” coverage encourages employees to seek care early.
- Targeted Copays: You can structure your HDHP to include pre-deductible, copay-based coverage for high-value services. Offering a simple copay for primary care, specialist visits, and mental health appointments makes routine care accessible and predictable.
- Preventive Prescription Carve-Outs: Don’t make an employee choose between their rent and their maintenance medication for a chronic condition like diabetes or high blood pressure. Many essential drugs can be covered pre-deductible to promote adherence and prevent costly complications.
- Financial Guardrails: Implement features like reference-based pricing for certain procedures to protect employees from price gouging. A well-structured out-of-pocket maximum also ensures a firm cap on financial exposure.
- Care Navigation Services: The healthcare system is confusing. Providing access to a care navigation partner helps employees find high-quality, cost-effective providers, understand their bills, and make informed decisions.
A Vignette: The Shift to “Smart Choice”
An Indianapolis-based logistics company with 300 employees offered a single HDHP to keep premiums low. However, HR noticed a troubling trend: claims data showed very low utilization for preventive and diagnostic services, and employee surveys revealed high anxiety about medical costs.
Working with their advisor, they introduced a “smart choice” lineup for the next plan year. They kept the HDHP but enhanced it with an employer HSA seed and pre-deductible copays for primary care. Alongside it, they offered a second, slightly richer copay-based plan with a marginally higher premium. By analyzing their claims data, they could apply targeted subsidies to ensure the richer plan remained affordable for their lower-wage workers.
The results after one year were striking. Preventive care visits increased by 25%. The number of employees reporting they had delayed care due to cost dropped by nearly half. The company’s total premium spend remained stable, but they had created a system that supported employee health instead of hindering it.
Your Path to a Better Benefits Strategy
Moving beyond a one-size-fits-all HDHP doesn’t have to mean runaway costs. It means being more intentional and strategic. By understanding your employees’ needs and using the design tools available, you can build a benefits program that is both financially sustainable and deeply supportive.
Ready to explore a smarter approach for your organization? Here are the next steps:
- Comprehensive Claims Analysis: Let’s dig into your data to understand how your employees are currently using (or not using) their benefits.
- Strategic Plan Modeling: We can model different plan designs and contribution strategies to find the perfect balance of cost control and employee support.
- Employee Education Plan: A successful rollout depends on clear communication. We will help you develop a plan to ensure your employees understand their choices and can select the best plan for their families.
Let’s work together to build a benefits offering that serves as a true asset for your company and your people.
