Perhaps Employees Just Don't Want HSAs

I read an interesting article this morning whose focus is to tell the reader that health savings accounts (HSAs) would be more popular if people only understood them The article was based on research from Fidelity that shows that most eligible Americans (those enrolled in a high-deductible health plan (HDHP)) don't understand the benefits of HSAs. In fact, that part of that research is likely correct.

But, despite that research, I think the answer goes deeper than that.

Before digging in, let's review some of the key features of HSAs:

• The money in your HSA can be used to pay qualified medical expenses.
• Money in your HSA that is not used in a calendar year simply stays in the account, unlike in a Flexible Spending Account (FSA).
• The account is yours. It goes with you if you change employers, are unemployed, retire, or just don't feel like deferring anymore.
• You can generally defer to an HSA in a year that you participate in an HDHP.
• There is a triple tax benefit from HSAs: money goes in tax-free, assets grow tax-free, money coming out for qualified medical expenses comes out tax-free.

So, what's the problem then? Which of those bullets do people not understand?

In my opinion, it;s more than that. I've done exhaustive -- well maybe not exhaustive -- research by just talking to people about HDHPs and HSAs. I don't ask them to rattle off the benefits of them, but I do ask them why they don't choose to use them. Here are some typical answers.

• People don't like high-deductible health plans. When we consider that most Americans do not have enough in savings to get them through a 2-month work stoppage, they certainly don't want health insurance that may not cover them for the first one or two months of pay's worth of medical expenses.
• When we consider that a typical employee's paycheck is already being "raided" by federal income taxes, state income taxes, FICA taxes, health benefit costs, 401(k) deferrals, and other benefit costs, there may not be enough left over for the day-to-day costs of living let alone HSA deferrals.

HDHPs and HSAs were put into place as part of a move toward health consumerism. In other words, patients will be more conscious of how they spend their dollars if the money for other than catastrophic health expenses is coming out of their accounts.

Let's think about what has happened because of this. An HDHP participant gets an annoying cold. He doesn't seek medical treatment because he is being a "smart consumer" of health services. Wait, it's not just a cold. It's bronchitis or influenza and suddenly, the costs are higher and his condition has spread as he has infected family members. That's not a good outcome.

Here's another plausible scenario. Another HDHP participant watches his daughter limp off the field during a youth soccer game. Her keen home-grown injury detection skills don't think there is anything broken, so they just decide to ice down the injury because experience has told them that the cost of a medical examination of it might be several hundred to even a thousand dollars. Oops, the injury turns out to be more serious than anyone thought. Our heroine should have taken her daughter to the doctor because now there are complications.

I'm not saying that the Fidelity research was flat out wrong. But, there's something more than people not understanding the benefits of HSAs. My conclusion is this:

People don't want to understand the benefits of HSAs. If participation in an HDHP is an entrance requirement, your average participant just doesn't care about the possible benefits of a health savings account.

The HSA experiment is now almost 15 years old. The concept of health consumerism is far older than that. Theoretically, it works. Theory and reality don't always agree.

When Did We Stop Being Inquisitive?

I can still remember much of my childhood, so most of my readers should be able to remember theirs, as well. Childhood has its phases. There is the "no" phase which usually occurs somewhere around age 2 or 3 in which it doesn't matter what our parents say, we answer "no." A bit later on, there is the "why" phase in which in doesn't matter what our parents tell us to do, we ask "why?"

At the time, I'm certain that all of those whys were very annoying to our parents and for those of us who have been parents in our own right, they were annoying to us too.

Sometimes.

Sometimes, asking why is a good thing, perhaps not to the extent that a 5-year old might do it, but oftentimes asking why gives us perspective into what we really need to do.

This extends itself into the benefits world as well.

Let's consider a not particularly made up hypothetical situation. A client informs their consultant that they want to change their 401(k) plan to make it a safe harbor or to make target date funds their QDIA. Or, on a different topic, they say that they need to move to a high-deductible health plan. If we, as consultants don't ask, but the client chooses to volunteer some information, we might learn that they read about the increasing popularity of whichever of these that it was or they heard about them at a conference.

There are several approaches that a consultant can take to that request. Sadly, the one that we often jump at is 'we can help you with that' as we salivate knowing that we just sold a new project. So, we're going to do what the client asked us to do not what the client needs us to do.

Let's suppose.

Let's suppose that we asked why.

Why do you want a safe harbor plan? Why do you want to use target date funds? Why do you want a high-deductible health plan (HDHP)?

Perhaps upon hearing the client's answer, we'll know that they are headed in the right direction. On the other hand, perhaps they are not. Because everyone else is doing it is not always a good reason.

Suppose we focus for a moment on the high-deductible health plan (I haven't written about health care for a while). When we ask why, the client tells us that her company's health care expenses have increased to rapidly and that they need to reduce that cost. Introducing an element of consumerism, she tells us, will make employees part of the buying and spending decisions and save the company money.

Strictly with respect to the health care plan, I expect that she is correct. In total, she may be correct. But, if cost is the issue, isn't it important that she understands the secondary and tertiary savings and costs?

Some data on HDHPs suggests that employees in those designs are more likely to skip certain medical procedures. In some cases, that's good. The procedure might not be necessary and not having it performed will save money at no personal risk to the employee. On the other hand, the procedure might truly be advisable. But, since the first $5,000 of cost may be borne by the employee, he may decided that is not money that he wants to spend. He chooses to forgo the procedure.

What are the non-primary effects of that decision? Here are a few potential ones:

• The employee should have had the procedure and develops a more severe condition later on that is far more expensive to treat.
• The employee, when that more expensive procedure becomes absolutely necessary, will be out of work for an extended period of time generating another significant cost to the company.
• The employee may become disgruntled with the employer because this new plan design "forced" him to not have his advisable procedure. Disgruntled employees are usually either less productive or they quit, or both.

These are all meaningful costs, but they are not ones that we can truly predict. We know that some of them will occur, but, in my opinion, the best that we can do is to model some scenarios and see where they might fall out. Perhaps understanding the full picture will help our client to better understand the decision she is considering.

But, we'll never know how to paint that picture if we're not inquisitive.

Don't forget to ask why.

Blip Theory -- The Downfall of 401(k) Outcome Theory

Most of the non-regulatory material that I read about 401(k) plans these days deals with participant outcomes. In fact, outcome seems to be one of the big buzzwords for 2014. We are suddenly talking about financial outcomes, health outcomes, and every other kind of outcome you can think of.

Don't get me wrong, I think it would be great if we all have wonderful outcomes. I just don't believe the studies that tell us how to get there.

In the typical piece that I read, I learn that in order to get the best outcomes, participants should begin saving at the beginning of their working career, increase the percentage of their pay that they save over time and convert their account balance (one way or another) to an inflation-adjusted annuity for longevity protection.

That's great. And, when a smart person models what will happen if a young adult follows this guidance, that person will always be destined to have a highly prosperous retirement.

But, it seems that very few people, even those who started saving when they were fairly young, are actually on target to have that very prosperous retirement.

Why not? What happened?

Life happened.

None of these models seem to reflect real life. In real life, people have periods of unemployment. During that unemployment, they stop saving. In fact, to the extent that those people have not also saved well outside of their 401(k), many will need to take distributions from those very 401(k) plans (paying income tax and the early distribution excise tax) just to stay afloat.

Where is this event in the models?

In real life, many young people actually do start to save at a modest rate and gradually increase the amount that they save. But, in real life, many of those people choose to have children and some will have them without having made a truly conscious decision to do so. Kids cost more money than anyone seems to think they will. That increase in savings rate often fails to be sustainable.

Where is this event in the models?

In real life, in 2014, an awful lot of people participate in high-deductible health plans. They are told that one of the great tax benefits of the modern world comes to people who put money away in a health savings account (HSA) to fund the high deductible part of their plans. This is a great idea as well, but real wages have not been increasing for probably the last 15 or more years. This model expects participants to save upwards of 10% of compensation in their 401(k) plans and an additional, say, $4000 per year in their HSAs. That's a lot of money. I think more people than not would tell you that this is just not feasible.

Where is this conundrum in the models?

Purchasing an in-plan annuity or taking an annuity distribution in your 401(k) is often an excellent idea. But, not all plans have them. Among those that do, many are not offered on a particularly favorable or attractive basis. The models that I have seen use a current, no-profit basis for converting your account balance to an annuity.

Where can I get one of these annuities on which an insurer makes no profit?

I'm all for wonderful outcomes. But, somebody needs to merge blip theory with outcome theory. Under blip theory, and I have never heard the term used before the morning of January 17, 2014, just as the road to hell is paved with good intentions, the road to wonderful outcomes is paved with potholes hereinafter known as blips. When models start including realistic numbers of blips, I'll start to believe the expected outcomes.

2014 IRS Limits -- Better Late than Never

As all those of you who weren't hiding away from your computer, smartphone, tablet, television, radio, and friends know, we had a little shutdown in Washington DC in the first part of last month. Non-essential employees not only weren't being paid to work, they weren't allowed to work.

Of course for many of us who are benefits professionals, knowing the 2014 limitations under various Code sections is pretty darn essential. But, the powers that be, who by the way wield far more power than your sometimes faithful blogger, decided that this was not among the essential functions.

Well, your government is back at work and therefore, we have our 2014 limits. Drum roll please ...

High-deductible health plans (HDHPs) 

• The annual limitation on deductions for an individual with self-only coverage increased from $3,250 to $3,300.
• For an individual with family coverage, that limitation increased from $6,450 to $6,550.
• A plan is high deductible the annual deductible is at least $1,250 (unchanged) for single coverage or $2,500 for family coverage and the annual out-of-pocket limits do not exceed $6,350 (up from $6,250) for single coverage or $12,700 (up from $12,500) for family coverage.

IRAs

• The IRA contribution limit remains at $5,500
• The IRA catch-up limit remains at $1,000
• The Adjusted Gross Income (AGI) phase-out starts at $96,000 (up from $95,000) for joint filers and $60,000 (up from $59,000) for individual filers

SEPs

• SEP minimum compensation remains at $550
• SEP maximum compensation increased to $260,000 from $255,000

SIMPLE Plans

• SIMPLE maximum contributions remain at $12,000
• SIMPLE catch-up contribution limits remain at $2,500

Other Limits

• 401(a)(17) pay cap up to $260,000 from $255,000
• 402(g) limit on elective deferrals to a 401(k) or 403(b) plan remains at $17,500
• The catch-up contribution limit remains at $5,500
• The 415(c) limit for annual additions to defined contribution plans has increased to $52,000 from $51,000
• The maximum account balance in an ESOP subject to a 5-year distribution period increased to $1,050,000 from $1,035,000
• The dollar amount used to determine the lengthening of the 5-year distribution period in an ESOP increased from $205,000 to $210,000
• The HCE threshold remained steady at $115,000
• The maximum benefit limitation for defined benefit plans under Code Section 415(b) increased from $205,000 to $210,000
• The compensation threshold for being a key employee (Section 416) increased to 170,000 from $165,000
• The Section 457 limit on elective deferrals remained unchanged at $17,500
• The taxable wage base increased from $113,700 to $117,000

IRS HDHP Notice that Had to Be

Yesterday, the IRS published Notice 2013-57 confirming that a High Deductible Health Plan (HDHP) can, in fact, still be an HDHP if it offers preventive health care without being subject to the deductible. The IRS got this one very right, despite Congress having missed a few technical details.

Here's the rub. The Affordable Care Act (ACA, PPACA, or ObamaCare) clearly contemplates HDHPs and health savings accounts (HSAs). The law tells us all of the following:

• For an individual to make (or for the individual's employer to make on the individual's behalf) tax-favored contributions to an HSA, the individual must participate in an HDHP.
• Further, the HDHP must not pay any benefits to the individual until the [high] deductible is satisfied.
• The ACA requires that a health plan must provide first dollar coverage for certain preventive care services.

Thankfully, the IRS made a completely reasonable decision. It determined that those benefits that must be provided should not preclude the use of an HSA. IRS went further by saying that anything that is preventive care under Notices 2004-23 or 2004-50 is preventive care for this purpose whether or not it is specified as preventive care under the ACA.

Phew! And, you were worried that this little glitch was going to blow up ObamaCare.

Another Survey Says

The benefits community in the US loves surveys. Large consulting firms love to do surveys. Presumably, their clients like this information, or at least someone thinks they do. The benefits news consolidators (you know, the publications that scour the internet for benefits news for a daily newsletter) love to tell us about these survey results.

This is all good. Or, at least, this could all be good. These surveys, though, have their problems.

• Questions are often poorly worded
• Possible answers either cover too much territory or not enough territory
• Press releases summarizing survey results seem to disassociate cause and effect
• Survey populations may not be unbiased
• Surveys inevitably are constructed to produce the findings that the surveyors think should be produced

Questions are often poorly worded

This is a no-brainer, but the world at-large doesn't seem to mind. I saw a survey question recently (the group had not been bifurcated yet into people who liked versus those who disliked their consumer-driven health plan (CDHP)) that asked "What do you like best about your consumer-driven health plan?" The possible answers were something like:

     a. my quality of care is higher
     b. it costs me less
     c. I can choose my own physician
     d. it promotes a culture of wellness

My immediate reaction is to ask where is e: none of the above? Let's look at the possible answers. Anybody who says that their quality of care is higher under a CDHP must be hallucinating. What would make it higher? If you can choose your own physician, why would they provide better care when you are in a CDHP than they would under a traditional health plan?

If you say that it costs you less, I would ask you less than what. Yes, the premiums are lower than they would be in an HMO, for example. On the other hand, they are higher than they would be if you had no insurance at all. Isn't this like having a deductible on an automobile insurance policy? If you choose a higher deductible, your policy costs less. But, in the health care policy, you usually don't get to choose your deductible. And, in the case of high-deductible health plans (HDHP) which are typically the cornerstone of CDHPs, the deductible is typically higher than most people can effectively budget for.

If you say that you can choose your own physician under a CDHP, that is true, but can't you choose your own physician under any health plan? It's true that your care may not be covered by the plan, but for many people, if that is really the reason they are in a CDHP, I would say that they are quite misguided.

Do you really think that CDHPs promote a culture of wellness? If I were texting, I would reply "lol." According to a recent Aon Hewitt survey (oops, now I am citing a survey), 35% of participants in CDHPs are sacrificing medical care because they cannot afford their part of the cost under these plans and 28% are postponing it for financial reasons. FACT: that is not indicative of a culture of wellness.

Suppose I think the CDHP that I have been forced into just plain sucks. How do I answer this question?

Answers cover too much or not enough territory


In the last section, I managed to deal with answers that don't cover enough territory. Sometimes, they go the other way and cover too much.

I took a survey recently about automobiles. The survey asked me a series of questions. For each question, I was supposed to answer on a scale of 1-13, with 1 meaning I strongly disagreed and 13 meaning I strongly agreed. Come on, people, 1-13? Do they really think that ten minutes into a survey, I can rate things on that fine a scale. They asked me if I would consider buying a Lexus when I next purchase a vehicle. So, perhaps I went through a train of thought like this. Lexus makes a very good car. They are stylish, safe, high-performing, and dependable. They are also expensive. Would I consider buying one? Yes, I would probably consider it, but I really don't want to spend that much money on a car, so how strongly would I consider it? Hmm, is that a 5 or a 6 or a 7 or an 8 or a 9 or a 10? I don't know. If it was on a 1-5 scale, I could probably happily fill in the little button for a 3. But on a 1-13 scale, that would be equivalent to a 7 and I just don't know if I'm a 7 or not.

Press releases ignore cause and effect


I saw another survey (if I could find the actual survey again, I would cite it here) recently that said that fewer companies were funding (informally) their nonqualified deferred compensation (NQDC) plans. The headline said something about recent guidance on corporate-owned life insurance (COLI) being the reason for this. Hmm, the survey had no questions in it about why fewer companies were funding their NQDCs. And, further, I'm not sure what recent is, but I can't find any recent COLI guidance that would affect funding of NQDC plans. Perhaps the authors of the surevy had a bias?

Survey populations may not be unbiased


Suppose a large consulting firm does a survey. In my experience, they send the survey to a nice cross-section of large companies. Perhaps it looks something like the Fortune 200 plus all of that firms clients not in the Fortune 200 that generate at least $1 million in annual revenue for the firm. Of the companies surveyed, who do you think are the most likely to answer the survey? Could it be the consulting firm's large clients? Aren't they the ones most likely to actually open the survey? Who are least likely to answer the survey? Could it be the companies that have recently fired that large consulting firm?

Do you think that the results of this survey might be a little bit skewed? Do you care? I do.

Surveys inevitably are constructed to produce the findings that the surveyors think should be produced


Suppose you ran the health care consulting practice at a large consulting firm. Further suppose that you are a big proponent of consumerism. In fact, you have built your consulting firms health care consulting practice around CDHPs. You ask your survey group to do a survey around health care plans. You want to be able to make a bold statement in a press release that shows how wonderful CDHPs are and for all the reasons that you have been touting.

Do you think you will make sure that the questions have at least a small bias that will lead to your desired result? If the findings come back differently than you had hoped, do you think you will publish the results as is, or will you find a way to tweak the results? Will you tout the portion of the results that support your practice or will you be unbiased in how you release the survey results?

I don't need to answer those questions for you. You don't need to answer them either. We all know the reality.

These surveys ... they do have their problems.

A Good Idea Spoiled -- COBRA and the HDHP

Many would disagree with him, but Mark Twain, many years ago, said that "Golf is a good walk spoiled." I don't think as many will disagree with me when I say that COBRA is a good idea spoiled by high-deductible health plans or HDHPs. Why?

Suppose we consider a not atypical situation. Fred Stonematch was an employee with Rocky Roads Paving Company (RRPC). Fred was married to Wilma, and they had two children, Pebbles and Bam Bam (BB). As Fred had a good job with good benefits and the two children were young, Wilma chose to take a part-time job that gave her flexibility to be home when the kids got home from school, but her job provided no benefits. Recently, RRPC had changed the health care benefits that it offered to its employees to an HDHP. In April, RRPC lost one of its largest contracts in a bidding war and they felt compelled to lay off many of their employees. As the foreman on that contract, Fred was one of the first to be laid off.

When Fred was given his pink slip, the HR manager explained to him the benefits of COBRA coverage. Fred could still get health care coverage for his family and at group rates (plus a small administrative charge), Fred dutifully enrolled for COBRA coverage and began writing checks for $1400 per month. Fred didn't have a lot of savings, so this was a real hardship, but he did understand that he and his family needed to be covered against a health catastrophe.

In May, Pebbles was out riding her bicycle when she hit a small hole in the road that she hadn't noticed. As Pebbles' arm was scraped severely from the fall, Fred and Wilma took her to the doctor. The $700 charge was covered under the health plan, but they had not yet met their [high] deductible for the year. So, for May, the Stonematch family had health care costs of $2100. Despite paying their COBRA premiums, they received no real benefit for the month of May.

In mid-June, during his first year of Little League, BB got hit in the head by a pitch. Thankfully, he was wearing a helmet. Also, thankfully, the Stonematch family had health insurance that they paid $1400 per month for because withing minutes, BB was feeling woozy and seeing double. Since he had a head injury, the emergency room physician decided that BB needed a CT scan. Ouch! The charge for the scan in the hospital was $1200, but because the Stonematch family was in an HDHP, the insurance paid nothing.

Do you see the problem? Fred did. He knew that there was no way that he could afford not to get COBRA coverage for his family. On the other hand, he couldn't afford to get it. In the first two months of his coverage, he had paid $2800 in premiums, $1900 for medical expenses and received no benefits. Thinking back, he realized that this could be the case, but he still didn't see a way around having health insurance.

When an employee elects an HDHP (or has no other health care choice through their employer), he doesn't anticipate getting laid off during the year. But, if he does, he will often be left no reasonable alternative to paying for COBRA coverage that will likely provide no benefit. It's a triple whammy: 1) no source of income; 2) needing to pay for insurance that he cannot afford; and 3) receiving no actual benefit for the coverage that he pays for.

The system is broken. Some think that the Affordable Care Act was the right answer. Some don't. But I know that COBRA combined with an HDHP is not the right answer. Shame on whoever thought it might be.

Most Want to Change Jobs, But Most Are Not. What's Going On?

Almost every day lately, I see that some firm has done a survey to see what percentage of workers plan to change jobs over the next 3, 6, or 12 months. The answers are pretty consistent: while the majority of workers are unhappy with their current employers, the majority (presumably a different majority) do not plan to change jobs.

Why is this? First off, the job market is still horrible. Companies are still implementing layoffs. Companies that are hiring generally are not doing it across the board. And, perhaps it goes back to the old story about the devil you know being better than the one you don't.

Let's consider the unhappiness, though. Where is this coming from? I'm going to state up front that I am not a fan of the pay ratio comparisons that many (including last year's Dodd-Frank Act) have called for. The ratio of CEO pay to the average pay for everyone else, or to the median pay for everyone else is often not a useful comparison. And, when it's not useful, it's often misleading. But, let's face it, total compensation in the US for CEOs has risen faster than total compensation for most everyone else. In fact, when a CEO is credited for growing profitability, it may be partially (or more) because he or she has cut labor costs.

This creates a very interesting dynamic where the pay ratio that I mentioned in the last paragraph becomes more distorted at least in part because the CEO is doing what shareholders asked him to do. While not fitting any of the cutely named paradigms (Occam's Razor, Hobson's Choice, Morton's Fork), it seems to be a combination of all of them without necessarily having the characteristics of any one.

All this having been said, in virtually all of the surveys that I mentioned at the top of this post, the single biggest reason for dissatisfaction is compensation. The surveys don't ask whether compensation is cash or cash plus benefits, but I don't think it matters. The fact is that across-the-board pay (cash) raises have largely disappeared in recent years. Even during the booming economy (it's ok if you don't believe the economy was really booming then) of late 2002 through mid 2008, pay raises were far smaller than they had been at almost any time during my lifetime. But, in addition, benefits have been cut.

Let me repeat that -- benefits have been cut. This doesn't mean that employers' cost for benefits has gone down. What is does mean is that the value to employees of those benefits has gone down significantly. Let's consider.

• Defined benefit plans continue to be frozen or terminated. The 'replacement' 401(k) plans are nowhere near as generous, on average.
• Health plans, over my working lifetime have gone from 'employer-pay-all' (or almost all) traditional indemnity plans to 'employee-pay-lots' non health insurance plans (the less cynical among us call them high-deductible health plans or consumer driven health plans). Employers can point to their costs having increased at rates far greater than inflation, but employees' costs have increased at rates that dwarf those absorbed by employers.
• Other benefit offerings have increased, but as often as not, those increases are at no direct cost to the employer. Yes, it is nice as an employee to be able to buy some useful benefit at negotiated group rates as compared to individual ones, but the amount that the employer is spending is at or near zero.

At the end of the day, pay for the rank-and-file is increasing (slowly), but purchasing power is lower. The only thing, in my opinion, that has helped to maintain purchasing power is highly available credit. But, as we all know, that seems to be on its way (if not already there) to being  a thing of the past. 

So, as the cost of daily life increases, the value of employment decreases and the value that goes to retirement decreases. Employees want to work longer, but employers seem to want them to work for shorter durations. Employees want more purchasing power, but employers provide them with less. But the grass doesn't seem to be any greener on the other side. So, of course employees want to leave, but the problem is that they can't find anyplace they want to go.

IMHO: On High-Deductible Health Plans

High-deductible health plans or HDHPs became all the rage earlier in this decade (yes, a decade begins in a year that ends in 1 and ends in a year that ends in 0). Many have called them consumer-driven health plans as the consumer has a higher financial incentive to choose as a financial buyer.

Their use was supposed to do lots of great things:

• Slow health care inflation
• Provide an incentive to stay healthier
• Generally slow the tide of chronic health conditions such as hypertension, high cholesterol, etc.

Now, understand that I am not a health care expert and I have not taken a formal survey, but I am a consumer of health care services and I do have a fairly large network of people that I talk with. I have been in an HDHP as often as not this decade. Many of my network have as well.

My strong opinion is that HDHPs lead to increases in health care inflation. Yes, you read that correctly. Here is my reasoning. Under HDHPs, initial care is paid for by the consumer, or the patient if you prefer. So, where patients used to go to see their physicians at an early sign of a problem, now they tend to delay. And, that delay, again in my opinion, allows conditions to fester making them worse, and more expensive to treat.

What evidence do I have? I have personal evidence, evidence from family, evidence from friends, and evidence from co-workers. In fact, I have yet to experience a single person from that group who likes being in an HDHP.

But, they do save employers money. How? Through significant redesign and re-packaging, larger percentages of total health care costs are being passed on to the employees and their families. Several companies on which I have seen real data are picking up the inflationary (not health care inflation, but general inflation which has been exceedingly small) costs of health care and passing on the other increases to employees. So, while employees get pay increases (some years) that barely keep up with inflation, their benefits costs increase far more rapidly. 

In technical terms from an employee standpoint: this ain't good (excuse my diversion into poor English).

What works? Again, this is not my area of expertise, but common sense should provide the answer. Give employees an incentive to engage in proper behaviors. While generally it is not permissible to charge higher health premiums in an employer-provided plan for higher-risk individuals (smokers being the exception), it is permissible to charge less for employees who are either lower-risk or who are taking appropriate steps to control their existing risks.

My evidence suggests that this works.

Just like a company saves money by having employees in tip-top physical condition, it also saves money by providing an incentive for those in less ideal physical condition to control their chronic conditions. For example, if an employee's blood pressure is 170/120, this is considered to be hypertensive. Perhaps there is nothing from a behavioral standpoint that the employee can do to control this. But, in most cases, medication can control that hypertension. It is in the employer's best interest that this employee take appropriate medication for that hypertension. To the extent that the employee does take steps to control the hypertension, he or she should be eligible for the appropriate discounts.

So, again, in my opinion, wellness works and HDHP doesn't.