Managing Employee Healthcare Costs in 2021
The ever increasing cost of healthcare combined with uncertainty about coverage, deductibles and copays keep some employees from getting the medical care they need.
More than 40 percent of employees have deferred medical care because of financial concerns, according to research by Willis Tower Watson. According to the Kaiser Family Foundation, the average annual premium is $7,470 for single coverage and $21,342 for family coverage in 2020. The average family premium has increased 55 percent since 2010 and 22 percent since 2015.
In spite of these increases, 56 percent of employers don’t plan to make any changes to reduce medical plan costs in 2021. Indeed, many plan to add new resources to better support healthcare needs in light of COVID-19.
Managing Employee Healthcare Costs in 2021
Employers are focused on improving employee healthcare by adding virtual or telehealth offerings and including voluntary benefits in 2020, according to research by Mercer. The good news is that both of these initiatives can help reduce healthcare costs.
Over 25 percent of employers are adding digital healthcare resources, like telemedicine for episodic care, artificial-intelligence-based symptoms triage, ‘text a doctor’ apps and virtual office visits with a patient’s own primary care doctor. These options are often less costly than traditional visits and are especially helpful during COVID-19 when physical visits aren’t always an option.
More than 20 percent of employers plan to add voluntary benefits, such as critical illness insurance or a hospital indemnity plan. Voluntary benefits are low-to-no-cost for employers because employees pay for them and maintenance is often handled through payroll deduction. They’ve risen in popularity in recent years as it became clear that a one-size-fits-all group benefits model wasn’t working for a multigenerational workforce. Voluntary benefits let employees personalize their level of coverage and choose a benefits plan that fits their needs without a significant impact on employer health spending.
Managing Out-of-Pocket Costs in 2021
Just 4 percent of employers plan to prioritize limiting surprise or balance billing in 2021, but many employees receive surprise medical bills they can’t afford to pay.
According to a survey by HealthCareInsider, 28 percent of employees received a surprise medical bill in the past year. A similar percentage said they carry medical debt and for 65 percent their medical debt exceeds $1,000. Nearly 60 percent of employees are concerned a health scare in their household could lead to bankruptcy or debt.
Fears about the costs of healthcare haven’t necessarily led to a change in benefits behavior. The vast majority of employees (92 percent) choose the same benefits year after year and spend an average of 33 minutes or less on the task.
Employers should make working with health insurance brokers to help employees better understand the difference between healthcare plans and estimated out-of-pocket costs for various services a higher priority. It’s a strategy that can reduce healthcare costs and assist in other employer initiatives, like reducing financial stress and increasing productivity.
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