Benchmark Plan Adoption—Help Employees Make Better Choices
When a benefits team introduces a new medical plan into their lineup, the new plan is usually designed and priced to be the best choice for most employees. It also offers a perfect opportunity to measure the effectiveness of your decision support tool.
It’s important to benchmark health plan adoption every year to track the migration trend. You can use this information to refine your communications strategy year over year until you hit your adoption goal.
Typically, we see benefits teams roll out new plans that are intended to be the best option for 70%-80% of their eligible employee base. Knowing that 70%-80% of your employees should be better off in the new medical plan you are offering, what should you expect the voluntary adoption on that plan to be in the first year? What should it be over the first three years? And, how can you influence plan adoption?
First year adoption
In the first year of offering a well-designed new plan, we’ve seen voluntary selection in the range of 5% to 45% of the eligible population.
Let’s start with the low end of the range.
Wait and see
Why would you only see 5% of employees selecting the new plan in the first year? Some employers take a hands-off approach to employee benefit choice. They don’t want to be seen as “pushing” a specific plan. They add the plan and perhaps mention it in a benefits newsletter. The first time employees truly notice the new option is during open enrollment. That’s the recipe for 5% adoption.
Communicate, communicate, communicate
What do you have to do to get better than 5% adoption in the first year?
First off, you must have a comprehensive benefits communications plan. You should be communicating about your new plan with multiple mediums as far out in front of open enrollment as is practical. We recommend home mailers, email, intranet, video on screens in common areas, and open enrollment sessions. First and foremost, your benefits communications should be created with the goal of helping your employees make good decisions. We have seen voluntary adoption rates as high as 24% of the eligible population in the first year in cases where communication is well done.
Drive decisions with data
What do you have to do to see 45% of your employee population select the new plan in the first year?
You need to add data-driven decision support to your comprehensive communications. Employees are looking for concrete reasons that one plan you offer is better than another. That boils down to money. We find that employees want clear guidance on the plan that is the financial winner in three minutes or less. We also find that if an employee must invest much more than three minutes from the start of the tool to a transparent, quantifiable recommendation, they will have a high abandonment rate.
Not finishing the decision support tool means you have lost them for that cycle. On the other hand, if they receive a transparent recommendation in three minutes or less, they are likely to go back and run an average of TWO MORE scenarios to prove out the logic of the tool, giving them confidence to switch plans.
Higher adoption continues after the first year
Data-driven decision support is also the best way to get employees into the new plan after its first year. Those employees who chose the new plan in year one will want to validate their decision the following year. Plus, once you have the employer analytics on the financial tipping points for your year-one enrollees, you will know exactly where your employees see the value in switching and may choose to fine tune your pricing of the new plan for year two.
Employees who did not make the switch in the first year may need to see the recommendation two or three times before they act. At the three-year mark we see the percentage of eligible employees making the right financial decision trend up as high as 90%.
Whether you are introducing a new medical plan this year or would like to increase adoption in a plan that has been misunderstood for a couple years, we can help your employees discover the best health plan for them. Contact Us
Read my other blog for other ideas on how to measure success Is Your Decision Support Software Measuring Up?
Categorized in: DA