Workers cry for choice: Employer health plans leave everyone upset

By attempting to please everyone, employers can find themselves in the unenviable position of pleasing almost no one.

“Employers provide health benefits to nearly 153 million Americans, which puts them in the health insurance business whether they want to be or not,” the 2024 State of Employee Heath Benefits report from SureCo said. “In the current model, business owners, finance professionals and human resource leaders face the impossible task of selecting and paying for plans intended to suit everyone, but rarely do. And thanks to the looming threats in the greater health care sector, their job is only getting harder.”

Further compounding the problem, just 3% of health system executives and 7% of health plan executives have a positive outlook for 2024, Deloitte’s annual health Care Outlook Survey found:

“Surging costs, shifting regulations and political uncertainty are creating a hotbed of unrest in the health care industry that’s affecting insurance carriers, medical providers, employers and individual alike,” the SureCo report said. The report offered a snapshot of health care today:

• Last years peak inflation rates will affect the health care sector in 2024 as multiyear contracts expire.
• Utilization remains high as Americans continue to catch up on nearly four years of treatments they may have missed or deferred during the pandemic.
• Pandemic-era Medicaid eligibility rollbacks likely will increase the number of uninsured patients.
• Demand for pricey specialty drugs such as GLP-1s for weight loss will further drive up costs across the industry.
• New regulations aimed at providing more transparency from pharmacy benefit managers and carriers will add to the administrative burden.

“You don’t need a crystal ball to tell you that changing your health benefits strategy is inevitable,” the report said. “If you’re lucky enough to sidestep a carrier or plan design change this year, it’s almost guaranteed you’ll need to do so in 2026. But here’s the rub: The changes you have been making aren’t doing enough to move the needle — and it goes beyond cost.”

Although 8 in 10 employers believe their workers are satisfied with their medical benefits, 87% agree that their employees want more health care coverage options. While most employees reported being satisfied with their health care plan, 80% said they would prefer to select their own plan from all available options instead of the few options their company currently offers. Two-thirds of employers surveyed said they will make a switch because their employees aren’t satisfied with the status quo, while only 40% said it’s because they can’t withstand another rate increase.

SureCo recommends that employers consider alternatives such as Individual Coverage Health Reimbursement Arrangements, which were introduced in 2020 and are growing rapidly, especially among large organizations. An ICHRA is an alternative to traditional group health insurance that allows employers of any size to use pretax dollars to contribute to the premiums of health plans that their employees purchase on the individual market. The defined contribution model allows for long-term cost predictability by eliminating claims risk and maximize plan-choice flexibility.

Related: Employees burnt out as potential risks abound in coming year, survey finds

“Our surveys paint a clear picture: Employees want more say in their health care options, and employers are feeling the pinch between keeping workers happy and balancing the budget,” the report concluded. “Health care costs are skyrocketing, and it’s tough to find that sweet spot between offering quality coverage and not breaking the bank. But employees aren’t just looking for the basics anymore. They want choices, they want flexibility and they want to feel like their health care needs are being heard.

“It’s time to embrace the change, get creative and build health care benefits that work for everyone. Because at the end of the day, that’s what it’s all about — keeping our teams healthy, happy and ready to tackle whatever comes our way.”