Employers can lead the DEI movement through benefit design improvement

By making a commitment to give everyone an equal opportunity to optimize their benefits, employers can create a more inclusive environment.

Benefit equity means that everyone not only has access to health benefits, but they have an equal opportunity to take advantage and make the most of those benefits.

The pandemic, a fraught election, and the civil unrest brought on by the killing of George Floyd has exposed the nation to the raw inequities underpinning U.S. systems. These inequities disallow people across gender, race, ethnicity and income a fair opportunity to reach their health and wealth potential.

Related: Building a benefits plan that supports DEI: Developing a comprehensive strategy

As leaders in their communities and society, employers can advance the needed work of healing, reconciliation, and change through mechanism firmly under their purview. There are many avenues for pursuing this work, but health benefit design improvement, specifically, can begin to address both the health and wealth inequities that generate unacceptable disparities. With even small improvements, employers can make an immediate impact on people’s daily lives and begin to address this recent history of unrest.

Benefit equality versus benefit equity

Improving health benefits starts by tackling both equality and equity. Benefit equality means that everyone has access to health benefits. Equality is achieved when health benefits are offered to everyone regardless of worker status (full-time vs. part-time, salaried vs. hourly wage earners). In the past decade, we’ve seen large corporations like Walmart and Starbucks make major strides toward guaranteeing universal health benefits.

Equality alone is a major accomplishment and a foundational step towards equity, but it is not the same as benefit equity. Benefit equity means that everyone not only has access to health benefits, but they have an equal opportunity to take advantage and make the most of those benefits.

The components that make up a health plan’s structure—premiums, deductibles, copayments, coinsurance, and employer contributions—affect how we choose a health plan and how we use it. Everyone has different needs and financial constraints, which means that how a plan structure affects one person could be very different from how it affects another person.

For example, a recent study showed that lower wage earners are more likely to overbuy health insurance. Fear of an unexpected out-of-pocket cost may prohibit them from choosing a higher deductible plan with a lower premium even if it’s the right fit. This results in the lower wage earner paying more over the long-term through higher premiums compared to their higher-wage co-worker. In other words, a component in how the plan is structured (the deductible) differentially affects how lower-wage earners choose and use their health plan.

A one-size-fits-all health structure, then, is not equitable and can in fact perpetuate inequities. By making a commitment to give everyone an equal opportunity to optimize their benefits, employers can create an environment where all employees feel safe, valued, and included. In turn, this will attract a more diverse pool of workers, which will engender a more productive and innovative workforce.

Strategies for promoting health benefit equity

Find out where you stand

To advance equity, organizations first need to understand what and whether inequities exist in their systems. A health benefits equity audit can reveal how an organization’s benefit design affects plan choice depending on employee’s income level and social demographics. This one step creates awareness, a key force for change.

Communicate with employees

Include employees in your benefits equity work. Let them know that you are assessing your health benefit design, invite feedback, and make it clear you are preparing to make improvements. Change takes time, so it’s important to let employees know that you have a concrete plan for addressing systemic wealth and health inequities.

Make health benefits education equitable

Education alone is a powerful tool for promoting equity. Given that less than 5 percent of Americans understand the health terms needed to choose an optimal health plan, employers can make an immediate impact by prioritizing finance and health literacy. Ensure that everyone has an opportunity to learn by considering:

Make health benefit design equitable

Education helps people understand their options and see which health plan is best for them. But unseen barriers can inhibit them from choosing their optimal plan. This is where benefit design changes come into play.

Adjust plan design based on income. As I described earlier, financial insecurity can make it difficult for consumers to choose their best-value health plan. This also gets in the way of them making the most of their plan offerings (e.g., by investing in Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs)). Simple plan design changes can give employees across income level the opportunity to optimize their health benefits:

Adjust plan design to accommodate different health needs. The social determinants of health are not equally distributed among an employee population, but differentially impact subgroups of workers.

For example, people with chronic health conditions need different types of care, which may or may not be included in their health plan. And given that lower-income populations and people of color disproportionately bear the burden of chronic disease, chronic care management is especially relevant to DEI efforts.

Three ways to improve are:

The reality is that employers inherited ownership of an inequitable system—and that’s not in any way their fault. But now is the time for change. Even with small benefit education and design changes, employers can lead the fight against systemic inequities and build a more equitable and inclusive workplace.

Dr. Elizabeth Cote, MD, MPH, is chief mission officer for MyHealthMath and has spearheaded an initiative to eliminate inequitable benefit design.

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