Benefits

More Employees are Opting for Consumer-Directed Health Care, Finds New Report

While the Affordable Care Act still faces uncertainty, employers are looking for ways to reduce their healthcare costs and offer employees healthcare benefits that meet their needs. A new report—released by Benefitfocus, Inc., a cloud-based benefits management platform and services provider— shows a continued shift toward consumer-directed health care, with the rate of employers offering at least one high-deductible health plan (HDHP) increasing more than 20% since 2016.

HSA

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This growth primarily stems from employers offering HDHPs alongside traditional health plans, reflecting the increased commitment among employers to offer more choice to employees. With respect to enrollment, the data indicates that employees’ health plan preference and benefits needs differ by demographic criteria, making plan diversity critical.

“This is a pivotal time for the benefits market as core and voluntary plan options multiply to meet consumers’ preferences,” said Ray August, President and CEO, Benefitfocus. “As employers seek to offer competitive packages while containing costs, the size and scale of our platform gives us the unique ability to identify trends and use data-driven insights to tailor our solutions to market needs and advise employers and, equally as important, their brokers, on how to be more efficient about their benefits strategy and plan design.”

The report identifies other key trends for the 2018 benefit plan year, including:

  1. Employees are embracing health savings accounts (HSAs).
    Participation in HSAs among eligible employees—those in HDHPs—grew by more than 60%, from roughly 50% in 2017 to 81% in 2018. Millennials were especially eager to adopt these accounts, nearly doubling their HSA participation from 2017.
  2. Higher earners don’t mind higher deductibles.
    The report points to mounting evidence that HDHPs are more appealing to employees with higher incomes. On average, employees enrolled in HDHPs for 2018 earn 7% more than employees enrolled in PPOs—a percentage difference more than twice what it was last year. This trend is consistent across all age groups.
  3. Reduced out-of-pocket risk offsets rising premiums.
    As employers continue to fine-tune plan design, most employees will again see their medical premiums increase, but will also enjoy lower deductibles in 2018. Notably, PPO subscribers will see a 9% decrease for family-coverage plans and a 7% decrease for single-coverage plans.
  4. Voluntary benefits address a diverse set of employee needs, from critical illness to pets.
    In addition to options like hospital indemnity, critical illness, and accident insurance, employers are increasingly offering products like legal insurance, identity theft protection, and pet insurance to round out their voluntary benefit offerings. Over the past 2 years, the share of large employers offering identity theft protection rose 56%, with the share offering pet insurance up 80%.

The 2018 “State of Employee Benefits” report analyzed the anonymous employee benefit election data of more than 1.3 million consumers from 540 large employers—representing a sample of the total consumers who use the BENEFITFOCUS® Platform. For more findings, download the full Benefitfocus State of Employee Benefits 2018 report, here.