Microsoft’s Transition to a New Health Plan

Nov. 21, 2013 - PRLog -- With healthcare reforms underway, many Corporate Benefits (http://www.corporatebenefitssummit.com/MTaylor) directors are contemplating how their organization’s health plan design should be adjusted. A common mistake they make, according to Fred Thiele, Senior Director of Global Benefits, Microsoft Corporation, is that they push through profound change too rapidly and just assume that employees will eventually fall in line. This approach is especially risky in competitive industries where the top firms are all vying for the same talent, he adds.

A speaker at the marcus evans Corporate Benefits Summit 2014 (http://www.corporatebenefitssummit.com/FredThieleInterview), in Las Vegas, Nevada, January 26-28, Thiele discusses Microsoft’s smooth transition to a new health plan.

Why did Microsoft make the decision to transition to a high-deductible health plan with health savings accounts, despite the popularity of its health plan?

While our former US health plan design was generally popular, it was also inefficient and did not provide any opportunity for long-term savings. Quantitative analysis based on our employee demographics showed that the fully-paid plan design resulted in overconsumption of health care in certain places without correspondingly better outcomes.

How did you approach this change? What mistakes do most Corporate Benefits directors make when planning such a transition?

My team and I approached this with great sensitivity and regard for employees’ understandable attachment to the former plan. Conscientious communications and change management were hugely important, as many considered the health plan to be a key component of our corporate culture in the US.

One mistake that some Benefits leaders make -- which we were determined to avoid -- is to push through profound change too rapidly and just assume that employees will eventually “get it” and fall in line.

How should such a change be communicated to employees? What tools could be useful?

We gave our employees two years notice of the 2013 plan migration and kept an open dialogue with them along the way.

Since we never underestimated the gravity of this change, we always approached our employee population proactively, frankly, and within a principles-driven framework. Our employees expect nothing less from us.

We assured them that the new plan would remain among the best in the technology industry and that it would cover them and their dependents thoroughly, with reasonable cost-sharing. But we also conceded that it would require them to think about their health care differently, because of the consumerism aspects that would now come into play. To help employees with their decision-making, we introduced a health care cost and quality transparency tool, in addition to an online bill-pay tool to lessen the administrative burden.

Any final words of advice?

Take time to know your unique employee population and how they perceive what you have to offer in the marketplace. It is too easy to default to generalizations about a “typical” or “aggregate” population, which may cause you to miss the mark on matters of critical importance.

Microsoft operates in a hotly competitive industry where many of the top firms are vying for the same sought-after talent. Companies in other segments face similar realities. You cannot afford to have someone else know your employees better than you do. Competitive benefits programs are still one of the most visible ways to attract, retain and motivate your talent.