When health benefits are no longer a benefit – new options for 2021

The COVID-19 pandemic has created a national health crisis, and wrought havoc in almost all aspects of our lives. But in addition to exposing the shortcomings of our nation’s health care infrastructure, it has also highlighted existing gaps in our health care financing system that have needed to be addressed for quite some time.

According to a recent study from The Commonwealth Fund, 43.4% of Americans have been inadequately insured in the first half of 2020.  As troubling as this statistic is in itself, what is even more surprising, and particularly concerning, is that approximately one quarter of all individuals insured through employer plans are still considered underinsured – meaning their plan cost sharing responsibility is so high relative to their income that they often can’t afford to use their “benefits.”

Deductibles and premiums associated with employer plans have been on a rapid rise for years. While most Americans recognize that being uninsured is a bad idea, many are now starting to question whether the health insurance benefits offered by their employers are worth the cost, since in many cases they simply can’t afford the deductible. Essentially, we’ve arrived at a point where employers are spending millions of dollars on a product that many of their employees can’t really use!

For businesses that are footing a majority of the bill and facing rising costs along the way, the ROI, which is really the combination of their ability to recruit and retain talent and improvements in employee well-being, looks grimmer every year. As a result, the discussion around employee benefits quickly devolves into new cost-shifting strategies, rather than maximizing the strategic investment that employers and their employees are genuinely looking for.

Fortunately, there are new options this year that offer the funding flexibility and unconventional cost-sharing models that your clients and their employees can get excited about, while having their needs truly taken care of.  These new models offer a better way for business owners to impact the health and well-being of their employees, but are also a smart investment that can differentiate and set them apart in the market. Here’s what you can do to help your clients be better stewards of their employees’ health care in 2021 while still keeping costs in check:

• Don’t just check the box this year: Consider all your options before advising your client to renew with the current plan or stay with the insurance carrier they had last year. Is the current plan serving the existing population, relative to their income and other needs? Is the benefits provider innovating to keep up with the growing relevance of mental health, telehealth and prescription drug delivery solutions? Are they dialed into serving and enhancing the experience of your clients and their employees at every turn? Do you have access to novel budgeting and cost-control models like defined contribution?
• Consider new approaches to cost-sharing: Are high deductibles becoming a barrier that keeps your clients’ employees from being able to appreciate the true benefit of their health plan? If so, consider eliminating deductibles altogether and providing more immediate coverage of the most common services that individuals and families need. New “zero deductible” options are now available at a cost that’s comparable to standard deductible plans, with better health management support and greater coverage on most commonly used services. Give your clients and their employees the coverage they need while offering flexibility to fit a variety of budgets when it comes to monthly premiums and out of pocket maximums. Zero deductible plans may be just what it takes to add some thrill into your clients’ benefits package and give them and their employees the peace of mind they need in 2021.
• Take advantage of relaxed deadlines: The Department of Labor (DOL) is making defined contribution solutions even more accessible for businesses, making it possible to set their own budgets and contribute pre-tax dollars towards employees shopping for their own plans by way of the individual coverage healthcare reimbursement arrangement (ICHRA). The DOL has even extended the mandatory deadlines this year, so employers have a bit more flexibility.

Ultimately, every one of your clients and their employees depends on you to provide them with a plan that makes it possible to afford the care they and their families need. While this year that may feel like an especially tall order, don’t be discouraged. There are levers you can pull that both meet the needs of your clients and help control costs – they don’t have to be mutually exclusive.

Marek is co-founder and CEO at Gravie where he is responsible for delivering on the company’s mission — to improve the way people purchase and access healthcare, and leading the team to design and deliver innovative, consumer-focused health benefit solutions.