As healthcare costs rise, employers have continued to shift a growing percentage of the cost of health benefits to employees. And, as workers shoulder more of their medical costs, they will need to better understand the health benefits they are offered at work and how to effectively use them.
Cost-Shifting Increases Employee Costs and the Need for Education
Workers are contributing almost twice as much today toward the amount of their employee health benefits as they were 10 years ago. To manage their own costs, employers continue to increase workers’ premiums, co-pays and deductibles. This, along with the movement toward consumer directed health plans (CDHPs) which include high deductible policies, leave workers with higher out-of-pocket costs at the time they seek medical care.
And, the movement toward CDHPs is growing.
According to a recent survey by the National Business Group on Health, 72% of employers now offer at least one CDHP. Employers offering only these plans have risen from 19% to 22% in the past year.
A different but related trend just gaining traction is likely to not only increase the cost of health benefits for workers, but also the requirement that they take a more active, and therefore, educated role in selecting and navigating those benefits.
A recent Reuters article reporting on the 2013 annual policy forum sponsored by the Employee Benefit Research Institute (EBRI) cites “a shift in workplace health insurance akin to the dramatic shift in recent decades from traditional pensions to 401(k)s. Health insurance will move in the same direction in the next five years,” Mark Miller of Reuters writes.
Instead of providing a defined benefit, many employers are increasingly looking to offer a defined contribution, thereby limiting their exposure to rising costs while shifting that risk onto workers who will not only pay more for their health benefits, but will also bear a greater responsibility in understanding how the products work in order to best select and utilize them. Employees have a poor history of managing 401Ks, however, and health insurance in all its confusing details is likely to follow a similar path.
Education Benefits Everyone
Benefits play a critical role in attracting and retaining good employees. Not only is it important for workers to have a good grasp of their benefits, employers also gain by playing a role where possible, in assisting employees in maintaining productivity, and physical and financial stability. A strong health benefits program that is well utilized by employees is one critical tool in meeting those objectives.
The MetLife 2013 study of Employee Benefits Trends highlights the value of employee access to information about how to select and use their benefits.
According to the study, 51% of engaged employees reported that they “appreciate online decision-support tools that help prioritize needs and make clear how decisions will impact their paycheck.”
In addition, clear communications were found to be critical to employees’ ability to understand, appreciate and effectively use their benefits. More than 4 in 10 (43%) engaged employees said that ongoing education about how to use their benefits would be very helpful.
Numerous other studies have found that benefits education tends to enhance employee satisfaction, and that when benefits are clearly communicated, employees show higher levels of engagement and loyalty.
As employers continue to alter the design of their health benefit offerings to manage their own costs, they will be well served to also consider enhancing their employee education program.
Visit: www.HealthBenefitsExplained.com to learn more