Forward-thinking employers moving toward consumer-driven health plan model

When midsize employers offer high deductible health plans (HDHP), 34 percent of employees elect them when given the choice, according to “Benefitfocus State of Employee Benefits 2016 – Midsize Employer Edition,” a snapshot of real, but anonymous, benefit selection data from over 500,000 consumers across nearly 2,400 midsize employers on the BENEFITFOCUS® Platform.

Traditional health plans – primarily PPOs – dominate the mix for midsize employers (87 percent), but when given the choice, over one-third (34 percent) of employees selected an HDHP, with millennials over age 26 the most likely to opt in (40 percent). Forward thinking employers – 13 percent – now offer at least one HDHP.

“The report shows HDHPs are being well received, signaling a desire from employees to select plans that fit their lifestyles,” said Shawn Jenkins, Benefitfocus CEO. “To attract and retain talent, we’ll undoubtedly see employers drive more choice and innovation in the type of benefits they’re offering, and the process for plan selection. As this shift toward consumer-driven health plans continues, in what’s been a relatively unchanged process for decades, employers must make decision support, education and financial wellness a top priority to help in the transition.”

Cadillac tax. The data also indicates midsize employers are well positioned to avoid the Cadillac tax, with no plans reaching more than 60 percent of the penalty thresholds on average. However, health care costs continue to rise and, with traditional plans that do little to discourage overutilization, it may also be in the best interest of midsize employers to consider how well their plan offerings actually fit the health and financial needs of their workforce and to help mitigate over- or underinsurance.

Out-of-pocket costs. The report shows, regardless of health plan, employees are facing higher out-of-pocket costs, and with copays and coinsurance across both PPOs and HDHPs, the average family could spend nearly 40 percent more on health care in 2016 than food (using U.S. BLS data). To close this gap, many employers are funding health savings accounts (HSAs) and flexible spending accounts (FSAs). Yet adoption is low at both large and midsize companies, as eligible employees contributed on average less than half the maximum amount allowed.

SOURCE: www.benefitfocus.com

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