This new paradigm for consumerizing health benefits mimics an earlier shift in the benefits industry when pension plans were replaced by 401(k) savings plans in the early 1980s.

While pension retirement plans were the gold standard for previous generations in the workforce, 401(k) plans later attracted both employers and employees alike.

Compared to pension plans, 401(k)s have several advantages. For employers, 401(k)s became a more cost effective way to offer retirement to their workers that shifted the investment risk over to the employees.

401(k)s also empowered employees to choose their own investments and further incentivized them with a company match.

Pension plans are somewhat obsolete in today's salaried jobs, with the exception of careers in the federal government.

In a similar vein, the Affordable Care Act (ACA) has the health benefits industry moving towards models that are more cost effective by shifting the financial and decision-making burden to the employee. 

Traditionally, employers have offered employees a limited number of coverage solutions like health maintenance organizations (HMOs) or preferred provider organizations (PPOs).

Today, approximately 40 percent of all employers and 92 percent of small ones offer employees only a single health insurance plan, according to the Harvard Business Review.

For those employers that do offer several options, there is very little that distinguishes them – most plans provide the same benefits coverage at similar levels of cost.

However, in a more recent shift, employers are beginning to leverage technology-based solutions such as public and private marketplaces to provide employees with a more comprehensive suite of benefits, greater control over how much they spend, and the foundational education required to make complex benefit decisions. 

Further, employers are now encouraging employees to sign up for flexible spending accounts (FSAs) or health savings accounts (HSAs). With the FSA and HSA options, employees have the flexibility to create personal tax-free health care accounts to use toward out-of-pocket medical and dental expenses, such as copayments or deductibles.

These newer spending accounts allow employees the freedom to put as much or as little money into their health care account as desired, in contrast to paying the monthly premiums of traditional health benefits plans.

How employers can reduce health care costs

On the whole, employers strive to strike a balance between having a healthy workforce and keeping their overall health care costs down. A 2014 survey conducted by the RAND Corporation estimated that the U.S. workplace wellness industry is worth $6 billion.

Furthermore, a 2014 report by Fidelity Investments and the National Business Group on Health found that medium-to-large employers spent an average of $521 per employee on wellness programs in 2013, which is double the amount they spent five years prior to that.

The hope by employers is that these investments in wellness programs will translate into greater productivity from healthier employees.

Common ways that companies aim to keep employees healthy may include offering preventative health care services such as annual flu shots free of charge; hosting workshops on topics of interest such as stress management; providing incentives for healthy lifestyle changes (e.g., smoking cessation); or even providing discounted gym memberships. Beyond these, there are modifications related to health benefits that employers can make that may result in lower overall health care costs.

Increasing the options of available health care benefits and engaging employees about healthy lifestyles are two considerations for employers seeking to reduce their health care costs.

Having an FSA or HSA health plan available can be more cost effective for employers and empowers employees to make their own health care decisions based on their lifestyles and needs; however, it is important that employees are adequately educated about their options and feel like they have the guidance to make an informed decision.

Additionally, regularly engaging employees in their health and encouraging them to take care of themselves may result in more preventative, proactive attitudes and behaviors towards health care, as well as potentially fewer sick days or hospital visits.

How employees can reduce health care costs

Similar to those for employers, there are additional steps employees can take to help reduce their health costs and lower their premiums. Perhaps the best way for employees to navigate health care decisions is to become better informed about the health benefits their companies offer.

Two easy ways that employees can stay empowered in their health care are through informational health benefits sessions, either in-person or by web conference, or through a quick visit to the human resources professional who handles health benefits and open enrollment.

In receiving this information, employees are able to better weigh the pros and cons of their health benefits options, with the aim of choosing the most comprehensive, cost effective and highest quality plan for themselves and their families.

Additionally, new digital tools may also make it possible for employees to sign up for their health benefits online, while ensuring that they receive the necessary information and guidance to make health benefits decisions that best fit their personal health needs. These digital tools make it easy for consumers to navigate the insurance enrollment process by letting them shop for their benefits online in the same way they do for other major purchases.

They can research, compare, and purchase their benefits through a guided experience that helps them better understand the often complex benefits options available to them.

If this does not sound like something that is currently offered for open enrollment, employees should be encouraged to speak up and ask for health benefits tools from their employers.

A positive future for health benefits

With the changing health care landscape, ever increasing offerings in health benefits plans, and recent advancements in digital health technology, the future looks bright for the health benefits industry. We live in an exciting time with consumers assuming more responsibility for their own health and well-being and with more options than ever before to help them take on and make the most of that responsibility. Just as employers a

And employees invest in retirement plans, it is equally important that they invest in health and spend time to make well-considered decisions that result in the best health outcomes.