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Managing Employee Healthcare Costs in 2021

Managing Employee Healthcare Costs in 2021

by | Nov 4, 2020 | Blog

Managing employee healthcare costs in 2021. What the average health insurance premium costs and changes employers are making to health benefits offerings in the new year.

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.

More on Topics Related to Employee Healthcare Costs in 2021

Preparing for Virtual Open Enrollment in 2020

HR Trends 2021: Which Benefits Do Employees Value Most?

Top 10 Employee Benefits for 2021

Support Workers with Better Employee Benefits

Helping Employees During Coronavirus/COVID-19 Pandemic

What’s Wrong With Wellness Program Incentives?

What’s Wrong With Wellness Program Incentives?

by | Dec 4, 2018 | Blog

What’s wrong with wellness program incentives? ROI isn’t proven, employees feel forced into participation, and worse, wellness programs can increase weight-based discrimination and stigma in the workplace, which results in increased obesity and decreased well-being.

Workplace wellness programs have long been criticized as ineffective and lacking ROI, but financial incentives for wellness program participation are even more controversial.

Depending on what the financial incentive is, failing to participate could cost an employee hundreds or thousands of dollars. It then becomes a question of whether participation is truly voluntary, or if employees are being coerced.

The Equal Employment Opportunity Commission (EEOC) set a limit for what employers could offer employees to join in on wellness programs in 2016 (30 percent of an employee’s health insurance costs). Earlier this year, a judge vacated that arbitrary limit and the EEOC said it would not produce a new number until 2021.

That means there aren’t specific guidelines for employers putting together next year’s wellness benefits to follow. It’s worth considering whether incentivizing program participation is a good idea or just a waste of money.

New research from Frontiers in Psychology found wellness programs can actually lead to increased obesity and decreased well-being. Programs that put the responsibility on employees made them believe their weight is blameworthy. It led to increased weight-based discrimination and stigma in the workplace, a consequence surely no employer intended.

Wellness programs framed from an organizational standpoint were able to avoid increased stigma. What does that look like? An employer providing healthy snacks, standing desks, or offering reimbursements for gym memberships gives employees opportunities to improve their health without shaming them, versus ‘biggest loser’ challenges that are sure to make employees more self-conscious and could fuel disordered eating habits.

Employers look to wellness programs to reduce astronomical healthcare costs and take back some of the $530 billion that poor employee health costs in lost productivity from nearly 1.4 billion days of missed work each year. However, most employers now realize offering wellness programs isn’t enough. Employee engagement with wellness benefits is low, which is why providing a financial incentive for participation seems like a great idea (and in some cases, it still can be).

Nearly 20 percent of employees are either unaware of or don’t understand how to use the wellness benefits their employer offers. Clear benefits communication is vital to program success, and a process to improve before offering financial incentives for participation. Employees need to know what’s being offered, and more importantly how it works and who to contact if they have questions.

Unless conflicting research emerges proving significant ROI for employers who provide wellness benefits initiatives, employers are better off spending those funds elsewhere. A focus on improving benefits communication and creating a culture that encourages healthy habits has the potential to boost job satisfaction, productivity and reduce employer healthcare costs. Organizational and procedural changes might require some effort, but they’re low-cost solutions to the issue of benefits engagement.

Your Employees Are Stressed About Healthcare Costs. What Can You Do?

Your Employees Are Stressed About Healthcare Costs. What Can You Do?

by | Feb 19, 2018 | Blog

Healthcare costs are the leading cause of financial stress for 17 percent of Americans, according to a 2017 Gallup poll gauging household stress. As uncertainty around the fate of Affordable Care Act mounts, this stress is only getting worse for your employees – and more expensive for your business.

Fifty two percent of male employees and 58 percent of female employees worry about becoming ill and not being able to work anymore, according to the 2017 Workplace Benefits Report. Financial stress leads to lower productivity and higher rates of absenteeism – this stress is even causes physical illness among some employees which only compounds the problem.

What can you do when healthcare costs leave your employees financially stressed? Try these 5 strategies:

1. Understand which healthcare-related stressors are affecting your employees
Your employees may be feeling massively stressed about their healthcare, regardless of their employee-sponsored benefits programs. The costs associated with monthly coverage, the difficulties of navigating confusing plan options and the weight of outstanding medical bills continue to stress out employees. Talk with your team as well as your HR department to determine exactly how healthcare may be contributing to your employees’ stress levels. This will allow you begin taking the appropriate steps to resolve these healthcare-related stressors.

2. Reassess the healthcare resources you already have
Once you understand the root cause of your employees’ stress, begin to review the healthcare resources you already have in place to help them. It may be time to diversify your approach. Reach out for external resources in order to analyze existing data.

  • Request assistance and information directly from your company’s insurance provider and its agents.
  • Reach out to company-linked financial advisors for relevant employee data
  • Access your company’s existing financial wellness programs in order to evaluate your employees’ stress levels, major financial concerns and overarching long term personal and professional goals.

If your company doesn’t currently retain all three of the above, it’s time you change that. These professional services assist you with educating yourself and your employees on how to maximize their healthcare benefits.

3. Provide your employees with the tools they need to educate themselves.
Your employees want to take control of their financial stress – many of them just don’t know where to start. Do your employees know the difference between an HMO, PPO, EPO, or POS? Between a copay and coinsurance? Do they understand how the size of their deductible will affect their monthly payment? Do you?

Improving employee literacy around healthcare is paramount to reducing employee stress and improving both their healthcare usage and your company’s savings. Look for tools through your insurance provider and if you don’t have one already, finding a financial wellness platform that will break down complex laws and regulations into readable, consumer-friendly language. By empowering your employees to take an active and supported role in researching their options, you’re helping them make educated and informed decisions. This translates into nearly $409.38 in savings for your company – per procedure, per employee.

4. Help your employees stay on top of recent changes to the healthcare system.
Healthcare stress is the highest it’s been since 2007, according to the same Gallup poll. This rising stress is tied in no small part to the uncertainty surrounding the future of the Affordable Care Act and what legislation might take its place. Whether your employees are receive insurance through you or the open market, stay aware of the changes happening in the world of healthcare – and make sure your employees do the same. Encourage employees to be proactive in gathering their own healthcare information. Task HR with maintaining effective outreach strategies including email updates, written literature in clear, readable language, face-to-face meetings and regular surveys. Host recurring employee workshops or lunch-and-learns to catch employees up on the latest changes to their plan options. Keeping employees up-to-date on the latest changes to their healthcare will cut down on employee stress, keep you connected with your workforce and keep your company’s overhead in check.

5. Make sure your employees are using the healthcare resources you already provide.
Employee benefits are useless if no one uses them. Employees who understand and utilize their benefits are more likely to be satisfied with their employer and recommend their organization as a good place to work, according to research from the Society for Human Resource Management. Yet, 80 percent of employees don’t even open the benefits materials given to them and of those who do, less than half don’t fully understand the benefits options available. In-person communication is the best way to cover confusing, and often changing, healthcare benefits. Make sure that resources about provided benefits – and about healthcare in general are easily accessible online.

Increase your employees’ access to their benefits resources. Create an environment that allows you to ensure that your employees are less stressed and more productive. That’s good for the health of your employees – and your business.