Rising healthcare costs continue to plague employers and employees alike, so it should come as no surprise that participation in high deductible health plans (HDHP) grew by more than 60% last year. A new report reveals which areas of the United States are most impacted by rising healthcare costs and highlights the types of voluntary benefits employers are offering to help their workers supplement his or her core medical coverage.
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Benefitfocus, Inc., a provider of cloud-based benefits management software, today released its State of Employee Benefits 2018—Regional Edition report, a snapshot of real, but anonymized employee benefit election data from 540 employers on the BENEFITFOCUS® Platform representing 1,281,447 individual consumers, broken out by U.S. Census region.
The data reveals benefit offering and adoption trends throughout the country related to health plan enrollment, voluntary benefits adoption, and employer and employee health savings account (HSA) contributions. These are valuable insights not only to employers looking to strengthen their benefits offerings ahead of Open Enrollment season, but also brokers who advise their employer clients on refining their benefits strategies and plan design.
“In today’s competitive employment environment, where satisfying consumer preferences is key, attractive benefits can make the difference between whether a prospective employee accepts a job offer or not,” said Benefitfocus CEO Ray August—in a press release. “This regional data helps employers understand how they stack up against others in their area, and how brokers can advise their clients on which benefit offerings and elections are trending so they can be more competitive.”
The State of Employee Benefits Regional data echoes many of the broader themes from the main State of Employee Benefits report, released by Benefitfocus earlier this year. Specifically, employees are embracing HSAs, and participation HSAs among eligible employees—those in high deductible health plans—grew by more than 60%, from roughly 50% in 2017 to 81% in 2018. Voluntary benefits are also on the rise as employees gain understanding of how they can address many of their diverse needs, from critical illness to legal insurance, identity theft protection and pet insurance.
Additional Findings
The West leads in HSA contributions, corresponding with rising HDHP offerings. Since 2016, HDHP offering rates have increased 76% in the West. Employees in the West made and received the highest HSA contributions, with employee contributions averaging $1,490 and employer contributions averaging $750 for individual plans, up 11% from 2017 and 19% from 2016. Employers in the West offer the most choice in voluntary benefits, such as accident, critical illness, and/or hospital indemnity insurance.
The Midwest leads in HDHP offering and adoption rates. HDHPs are most prevalent in the Midwest, where 70% of employers offer them alongside traditional health plans, up from 46% in 2016. Furthermore, 37% of Midwestern employees selected an HDHP, the highest adoption rate in the country. Employees in the Midwest pay the lowest preferred provider organization (PPO) premiums in the country, at less than $1,500 annually for single coverage.
Employees in the Northeast pay the highest premiums. Employees in the Northeast pay the most for their health plan premiums, both for PPOs ($1,692 for single coverage plans) and HDHPs ($1,237). That’s 10% more for PPOs and 14% more for HDHPs than the nationwide average on the Benefitfocus Platform.
The average employer HSA contribution (single coverage) has increased 10% year over year.
The South leads in voluntary benefit choice growth, but pays highest deductibles. Southern workers carry higher-than-average financial responsibility for their health plans, paying the steepest PPO and HDHP deductibles in the country— $1,300 and $2,416, respectively, for single coverage. That’s 28% higher than the nationwide average for PPOs and 11% higher than the nationwide average for HDHPs.
Since 2016, there’s been a 138% increase in the share of employers offering at least three voluntary benefits, giving Southern employees a greater opportunity to supplement their core medical coverage. For more information on this report, click here.