The COVID-19 pandemic has changed the landscape of health care for all of us. Employers must rethink their benefit strategy this open enrollment season. Now more than ever, it is critical to balance attracting and retaining employees while keeping costs in check. Providing a financial security benefit to accompany an employer’s high deductible plan offering can help achieve both goals. When a financial security benefit helps employees and their family members pay for and manage their out of pocket health care expenses, it pays dividends for years to come – particularly for those who have no access to cash, poor credit, or, like most Americans, live paycheck-to-paycheck.
The standard employer-sponsored health plan comes with roughly an average $8,000 annual out-of-pocket maximum. The vast majority of Americans live paycheck-to-paycheck ― 40 percent struggle to cover a $400 emergency expense ― so it’s no wonder why so many individuals consider themselves functionally uninsured despite being enrolled in an employer-sponsored health plan.
The kicker – an employer’s price tag for family coverage approaches $20,000 a year, making it painful for employers to witness their employee “benefit” suddenly become a “liability.”
With a financial security benefit, employees can be guaranteed access to credit for medical expenses on consumer-friendly terms with many pledging that defaulting employees will be spared from collections or negative credit bureau reporting.
For employees who do not have access to financing on their own, this gives them something their health plan alone can’t – financial security.
The majority of employees enrolled in high-deductible health plans report skipping or delaying care, which can have catastrophic consequences. Employees who skip care stay sicker for longer, and when outcomes are eroded, employers see an increase in health plan expenses as well as absenteeism/presenteeism.
By adding a financial security benefit to their annual offering, employers set their employees up to seek care with confidence and restore value to their healthcare benefit.
Financial security benefits can also be used to provide a net for those enrolled in Health Savings Accounts. HSAs are a great addition to an employer’s benefit line-up. Some employers will find they are the only plan design they can afford to offer. However, employees often bemoan that while HSA programs should work well for them, and that the price tag for the premium is right, the specter of a one-time deductible exposure makes them hesitant to enroll.
HSA premium savings often cover a portion of that exposure, but when employers and their employees can’t afford to make HSA contributions to cover the rest, employees are left worrying worry about the size and timing of potential medical cost – particularly if they arrive early in the plan year.
Providing an affordable way for employees to pay for their health care expenses whenever they are incurred removes a major barrier. Adding a financial security benefit is much more cost-effective for the employer than front-loading the HSA with hard dollars at the beginning of the plan year.
According to a recent Gallup poll, the availability and affordability of health care tops the list of concerns in America. As employers grapple with objectives like containing costs, attracting and retaining talent, building a healthy workforce, and getting the most value from the benefits they provide, a financial security benefit checks all of the boxes and, during these difficult times, allows an organization to stand out from their competitors as an employer that cares.
Amy O’Meara Chambers, JD, is the COO and Cofounder of HealthBridge. She has over 25 years of experience working in the health care industry as both an employee benefits attorney and as a business builder. Amy is the author of the great American novel — HSA’s for Dummies and holds a J.D. from the University of Michigan Law School and a B.A. from the University of Chicago.
HealthBridge Mention in the Article
Amy O'Meara Chambers, JD
Chief Operating Officer