The Supreme Court ruling that continues premium tax subsidies for some 6.4 million Americans in 37 states is good news for consumers, and creates certainty that the federal marketplace will continue to operate. While the ruling might not directly affect large or small businesses, controlling costs will continue to be the issue for both employers and employees. The Supreme Court can’t lower the cost and improve healthcare results for your employees, but you can.
In a recent General Re Life Corporation study, more than 2,000 employees were asked to give their perspective on the health insurance marketplace and how confident they are about the health insurance coverage they currently receive from their employer. More than 79% of study participants said they share the cost of their health insurance plan with their employer, and more than 20% of those surveyed have a chronic health condition, most likely resulting in higher medical costs.
Interestingly, 63% of those aged 21-30 believe their employers will not stop offering health insurance benefits, while only 44% of 51-60 year olds believe their employer will continue offering employer health insurance in the future. Of the 21-30 age group, 76% of them believe their employers are obligated to offer a health insurance plan as a company benefit.
Different ages. Different perceptions. Different decisions to make.
So what are the decisions employers can make to help employees control healthcare costs?
1. Offer health insurance plans with qualifying health savings accounts
The average health insurance plan deductible for one person is $2,563. This increases to $3,456 for a family. Deductibles can be more than $6,000 for a person and nearly $13,000 for a family. And high deductible plans are gaining popularity with employers to curb costs, passing additional medical expenses on to employees. Yet in a 2012 Pitney Bowes study, the average American had just less than $6,000 in savings total. And 26% of Americans have no savings at all.
For many, one large medical bill could wipe out everything. This is where health savings accounts (also known as HSAs) can be a financial lifesaver. Employers can choose to contribute pre-tax dollars to an employee HSA or not. They can also assist employees by taking pre-tax dollars from paychecks and directly deposit earned funds into an employee’s HSAs for them. In 2015, an individual can deposit up to $3,350 into an HSA, and a family can add up to $6,650 of pre-tax dollars to this type of savings account.
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2. Educate employees on knowing how much of the total cost they are responsible for before using care.
Medical bill sticker shock is common. What’s more, costs for medical services and tests can wildly vary in the same region. For example, a colonoscopy with a biopsy in ZIP code 55101 can cost $1,338 if a patient has the procedure done at a surgery center 17 miles from their home, or $8,037 if they opt to have the procedure done at a hospital facility 19 miles from their home. By electing to have the colonoscopy done at a surgery facility, the patient saves almost $6,700.
Healthcare Blue Book is an excellent resource for employees that gives them an idea of costs prior to ever stepping inside a doctor’s office or medical facility. By adding flyers to the company break room and including educational resources in new employee packets, teams can learn more about medical costs before they use healthcare.
3. Offer new tools that help curb medical expenses.
Studies show an average of 37% of employers will add telemedicine to their employee benefit packages in the next year. This online resource is becoming more and more popular for good reason. The average cost of a doctor office visit is $180, while video consultations average $40, and can be done from a computer or mobile phone. This not only saves employees money, but valuable time meant to be spent at work or with family. Sooner intervention can also keep preventive care costs stable, and emergency room occurrences lower, once again saving employees on medical expenses.
4. Offer additional insurance coverage that covers medical deductibles.
Commonly referred to as healthcare supplement plans or gap plans, these low-cost insurance policies provide cash benefits for accidents or serious illnesses to help cover a medical deductible nearly in full, which is a great match for families with active young children or employees over 50 who are statistically more susceptible to illness.
Let’s look at the numbers. A child’s broken wrist can cost between $1,147 and $6,065, depending on the region. If an employee has a high deductible health insurance plan, they would have to pay all of these expenses out of their own pocket with no assistance from the insurance company since they have yet to meet their deductible. With supplemental insurance—costing about $30 a month—the employee would receive a lump sum of cash once they file a claim, which would help pay for most, if not all, of the medical expenses incurred.
Health insurance isn’t getting cheaper for anyone involved—individuals, employers, or employees. That is the big OUCH. Premiums will go up by more than 10% next year for most plans. But there are ways to reduce the pain and make healthcare more affordable.
About Jeff Smedsrud
Jeff Smedsrud is Co-Founder and Chief Executive Officer of HealthCare.com, the leading search engine and comparison tool for healthcare insurance plans. In his 30-year career, Jeff has built and grown health insurance marketing and business companies, and served as a healthcare reform advocate. Previously, Jeff was Chief Marketing Strategy Officer and Senior Vice President of The IHC Group, a publicly traded insurance holding company. Today Jeff serves on many nonprofit healthcare boards, including the Coalition of Affordable Health Coverage, and is a regular contributor to the HealthCare.com Blog.