Aggressive Communication Paired With Plan Design Changes Key to Controlling Health Care Costs.

LINCOLNSHIRE, Ill. -- Hewitt Offers Insight on This Year's Enrollment Trends and Communication Strategies

In response to continued double-digit health care cost increases, employers are preparing to communicate aggressive health care benefit changes to employees this enrollment season. Hewitt Associates (NYSE: HEW), a global human resources outsourcing and consulting firm, offers an overview of major changes employers are implementing this enrollment season and how companies can effectively communicate them to employees.

"Every company is under extreme pressure to reduce costs, especially in health care, where expenses have continued to skyrocket," said Jennifer Murphy, national leader for health care communication, Hewitt Associates. "This pressure has forced companies to make major plan changes this year, but plan changes are only half the story. The only way to reduce costs is to drive better employee decisions. Employers can no longer afford to sit back and let enrollment happen. Rather, they need to be bold and provide guidance on what employees need to do and how to do it."

Hewitt, which administers benefits for 18 million employees on behalf of more than 300 companies, identifies the following trends for this year's enrollment:

--Requiring active enrollment - While many employers traditionally favored passive enrollments (where employees who take no action keep their previous year's coverage), this year marks a turning point in which many employers are requiring an active enrollment. This means employees will be required to take action with their enrollment or risk being defaulted into a health plan that does not meet their needs or possibly lose their coverage. Employers are moving to active enrollment to ensure that employees are aware of their health care options and examine them to make the best possible choices.

--More cost sharing - As in recent years, employers are asking employees to share a greater portion of health care costs, and an increasing number of employers are moving to a coinsurance model. In general, employees can expect coverage, copay, deductible and premium increases again this year.

--Focus on funding/savings vehicles - With employees paying more out of pocket, employers have expressed more interest than ever before in tax-advantaged savings/funding accounts, such as the newly established Health Savings Accounts (HSAs) and Health Reimbursement Arrangements (HRAs). Others are encouraging employees to consider tax-advantaged flexible spending accounts and are increasing their contributions to or providing matches to these accounts to move more employees to high-deductible plans.

--Greater number of choices/customized design plans - Employers want to provide their employees with more meaningful choices that will help each employee tailor a health plan to meet his or her individual needs. More than 20 percent of Hewitt clients, a significant increase from last year, will offer these customized design plans, allowing employees to choose from a menu of available options to create the best plan for them, based on price points, coverage, use and risk tolerance.

--Improved decision support tools - Employers recognize that all this choice can be overwhelming. To help employees evaluate their options, companies are providing an unprecedented number and level of decision support tools, such as medical expense estimators, health plan comparison charts, provider quality data, patient education and condition management information, health risk assessments, and expense account explanations and estimators.

"This workplace is changing rapidly and so is enrollment," noted Murphy. "Just as employers are asking employees to change the way they choose and use health care, they must rethink their own strategies for communicating and driving that change. Whether employees make wise decisions depends largely on how choices are presented to them at enrollment and throughout the year."

Hewitt offers the following 10 tips to employers developing their open enrollment communication strategies:

1. Align your strategies - To achieve success, health care strategies must be designed to support business strategy, and the communication strategy must support both. Be prepared to explain, in simple terms, what's happening with health benefits and why from a broader business perspective.

2. Engage managers and business leaders - It's critical to explain the changes, rationale and end goals of health care benefits to managers to get their buy-in. Remember that they are on the front lines of explaining and advocating these changes to employees.

3. Expect noise - In previous enrollments, success was measured by the degree to which "noise" - questions, complaints and calls - could be minimized. This year employers should not only expect noise, but welcome it. The level of change many employers are implementing will bring many comments and questions. If all is quiet, you haven't done your job.

4. Don't sugarcoat - Be honest and direct when communicating changes, particularly when costs are increasing. Also, be clear with employees on the actions you want and need them to take.

5. Give them the 5 C's - At a minimum, companies need to ensure their employees fully understand what Hewitt calls the "5 C's of Enrollment" - cost, coverage information, changes to plans, comparisons to the previous year's plans and current options, and "see" which doctors are in the plan.

6. Communicate early and often - Remember that any change is a big deal, so employers need to develop and implement a strategy early that helps prepare employees for what's coming. Employees need time to digest this information, and employers need to reinforce it on a regular basis.

7. Personalize - People relate much better to examples relevant to their situations than to abstract concepts. It helps to provide testimonials from other people in similar circumstances or to offer tools that allow employees to model and make decisions based on their own circumstances.

8. Cut through the clutter - Think of creative ways to reach employees that differ from how you've communicated in the past. Hewitt's research shows that Web or print alone will not be effective. Instead, use a strategic combination of printed, Web and face-to-face communication at open enrollment to drive a consistent message.

9. Remember enrollment is only half the equation - Open enrollment is the one time each year employers can be assured of a captive audience, so it's a great time to introduce new tools and resources that will help them be better health care consumers throughout the year.

10. Avoid information overload - While it's important to communicate thoroughly and introduce new ideas, don't overload employees. Employers need to strike the right balance in what, how and when they communicate.

About Hewitt

Hewitt Associates (www.hewitt.com) is a global human resources outsourcing and consulting firm. It provides services from offices in 38 countries.