HR.com: Diversification Is a Common Thread in Employer-Sponsored Health Care
If there’s one word to capture employers’ 2019 health care benefits strategies it is “diversification.” More than ever before, we’re seeing organizations diversify their health plan options, the voluntary benefits they make available and how they incent and reward wellness program participation. Why? Because diversification of options means that employees are able to choose and participate in plans, benefits, initiatives and incentives that are meaningful for them—improving their satisfaction with their benefits and improving retention rates. And, because employers have realized that they cannot continue to shift costs onto employees through higher premiums and deductibles and lower coinsurance—they are investigating new and more creative ways to manage health costs.
Our 2019 Medical Trends and Observations Report, published in collaboration with Gartner and based on an analysis of more than 1,000 employee benefits plans from nearly 200 companies, shows a clear effort by employers to diversify. Here’s a look at some of the key findings:
Diversity in Plan Structure
This year, the Medical Trends and Observations Report identified a definite trend toward creative plan offerings—such as a cafeteria-style plan in which employees have a specific dollar amount to spend on the coverages of their choice or the ability to combine a core medical plan with “add-on” coverage for specific treatments on an as-needed basis.
More typically, however, employers are offering a selection of health plans, so employees could choose the best fit for them.And, not surprisingly, high deductible health plans (HDHPs) are often one of those options.
This year, HDHPs represent 41 percent of plans offered—up from 30% in previous years. Of employers offering an HDHP option, 51 percent offer one or more tax-advantaged accounts to offset those high deductibles. Health savings accounts (HSAs) were by far the more popular offering (79 percent of employers offering HDHPs also offered HSAs—up from 51 percent last year), while21 percent offered health reimbursement accounts (HRAs). Interestingly, employer base contributions to these kinds of accounts have decreased, with many employers apparently offsetting this decline with more robust wellness incentives (more on that later).
Some other innovative methods employers tried this year included:
- Excluding out-of-network expenses under allplan options, except in the case of emergency and for certain mental health services; and
- Covering preventive medication at a minimal or no cost.
These changes shift the responsibility of reducing out-of-pocket costs to employees by encouraging them to make cost-effective health care decisions and stick to their treatment plans.
A New Approach to Wellness
This year, 40 percent of employers in our database are sponsoring wellness programs. While traditional wellness actions remained most popular (think: biometric screenings, health risk assessments and tracking tobacco usage), we also saw employers rewarding employees for a wider set of wellness activities.For instance, some employers rewarded employees for getting dental check-ups, obtaining a second opinion on health procedures, using a center of excellence, donating blood and even for completing volunteer work in their communities.
The report also found that participation in wellness incentives was most often rewarded with HSA or HRA contributions, perhaps to drive enrollment in HDHPs and /or to offset lower base contributions to these tax-advantaged accounts. A handful of businesses chose to offer prizes for “points” that employees accumulate over the course of the year and few even limit access to certain health plan offerings to employees who complete these kinds of wellness tasks.
Expanding Voluntary Benefits
With young people now representing a large portion of the workforce, our report revealed that employers this year expanded voluntary benefits offerings – likely in an effort to meet the new generation’s demands for improved work-life balance. For example, we saw an increase in family-friendly benefits, such as adoption assistance and back up childcare, with 19 and seven percent of businesses offering these benefits, respectively.
Additionally, many employers provided employees with options for financial wellness checks(seven percent), legal services (46 percent) and identity theft protection (25 percent). Standard benefits, like dental and vision (75 percent),and supplemental life insurance (75 percent) and accidental death and dismemberment insurance (60 percent).
As organizations continue to look for ways to curb costs and enhance employee satisfaction – both of which can contribute to their businesses’ bottom lines –2019 has sparked more diversified and creative benefits strategies. Only time will tell if these deliver the return they seek, but with proper benefits education and regular multi-channel communication about how employees can best use their plans, employers could find themselves set up for success this year.
Read more here.
(Kim Buckey is the vice president of client services for DirectPath.)