Employers and benefits advisors have a wide range of options when looking for ways to design health plans to match the needs of their workforce. For those not in the benefits space day in and day out, it may be surprising to learn that organizations can customize plans. Especially as firms look to attract and retain talent, benefit plan customization can be an important component of an appealing compensation package. Here, we’ll examine how a global pharmaceutical firm, Pfizer, partnered with HealthEquity to design a tiered Health Savings Account (HSA) to support workers of varying incomes.
In 2021, Pfizer was one of just a few organizations in the pharmaceutical space not offering an HSA-qualified health plan and account benefit—and their employees were asking for one.
It wasn’t that Pfizer wasn’t interested in offering the option. The company wished to remain competitive as an employer and support the diverse needs of its employees (referred to as “colleagues” at Pfizer). Rather, Pfizer wanted to find a way to offer an HSA-qualified health plan that would provide comprehensive coverage to colleagues across the income spectrum, particularly regarding prescription drug coverage—an important component of Pfizer’s benefit program.
“We knew [the HSA] was attractive for our more highly paid colleagues looking for a tax savings vehicle,” said Michele Proscia, Director of the U.S. and Puerto Rico Health and Insurance Benefits team at Pfizer. “We also wanted the opportunity to support our lower paid colleagues while still providing access to affordable, comprehensive healthcare coverage.”
Pfizer was also seeking an HSA administrator that would provide an excellent customer experience. Some of the company’s colleagues were familiar with HSAs, while others would be opening their first account. Pfizer knew that for the program to be successful, it would need a partner that could support colleagues at all stages and throughout the lifetime of the benefit.
The Pfizer benefits team soon settled on a unique HSA plan design that would satisfy their standards.
The Pfizer HSA is a post-deductible, co-pay solution with prescription coverage, funded according to a tiered model. The design ensures broad pre-deductible coverage for allowable medications and services. Pfizer colleagues are separated into one of four tiers, based on their annual base pay. Colleagues who are lower paid are given the most seed money, with seed money tapering off as base salary increases before zeroing out with the highest tier. (For more information on employer contribution strategies, like seed and match options, read our post, Boost your HSA success with Employer matching.)
All HSAs are fully funded on January 1 with their employer contribution, allowing colleagues to prepare for any planned (and unplanned) qualified medical expenses during the year. Pfizer was also careful to ensure their HSA funding offset any difference in out-of-pocket deductibles when compared to the previous year’s lowest cost medical plan option.
With the HSA design established, Pfizer found a partner in HealthEquity to bring the benefit into reality. The team felt that HealthEquity education, with its focus on driving proven behaviors leading to success, would be an important component for its colleagues and their diverse experience and financial goals. HealthEquity resources, like webinars, custom flyers, email promotions, and a dedicated education center, were also key.
“We were impressed with the HealthEquity Learn site and the different tools and resources that HealthEquity offered,” said Proscia. “Our plan was so specific, and HealthEquity customized their materials for us. That was a differentiator.”
Working together, Pfizer and HealthEquity planned a comprehensive educational campaign to educate colleagues about the new HSA benefit and prepare them for open enrollment. Pfizer offered weekly live webinars, a virtual benefits fair, FAQs, videos, and an enrollment microsite with HealthEquity support.
The results were astounding. Roughly one in three Pfizer colleagues chose the HSA-qualified health plan option. Proscia believes that, while it is still early, the benefit is attractive to lower paid colleagues, with over 37% of its lower paid colleagues electing this coverage. Additionally, 11% of colleagues who enrolled in the plan are investing their HSA funds, exceeding the 7% industry average reported by Devenir.
“From an enrollment perspective, we blew it out of the park,” Proscia said. “Everyone was so helpful in the rollout and in making sure we had clear information from HealthEquity.”
And for companies that find themselves in a similar position to Pfizer, Proscia has some advice.
“You have to figure out what’s best for your organization,” she said. “Test your webinars and make sure your content is relevant to your population. Also, there is no such thing as overcommunicating.” Read the full case study.
Learn more about custom solutions
If you’re interested in customizing a health plan to match your organization’s goals, reach out to our team. It can seem challenging to create the right HSA match program for your organization, but as you weigh your options, lean on our 20 years of experience. Reach out to us at 866.855.8908 and we’ll help you find the best strategy available.
HSAs are never taxed at a federal income tax level when used appropriately for qualified medical expenses. Also, most states recognize HSA funds as tax-deductible with very few exceptions. Please consult a tax advisor regarding your state’s specific rules.
HealthEquity does not provide legal, tax or financial advice. Always consult a professional when making life-changing decisions.
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