The rising cost of health care in the United States has been an issue for decades. Add on the health and economic challenges that came with the coronavirus pandemic in 2020, and employers and their employees are struggling more than ever to manage their healthcare costs.
According to a recent Gallup poll, half of Americans are worried about bankruptcy due to a significant health problem. It’s no surprise that, even with stable employment, people worry that their medical bills could exceed their income and savings. A 2020 survey by Salary Finance determined that nearly a third of Americans have outstanding medical debt—and more than 50% of these individuals have defaulted on that debt.
Businesses pay a high price when their employees experience this kind of health-related financial distress. In addition to decreased productivity, increased turnover, and lost revenue, employees may delay getting the care they need, leading to higher healthcare costs in the future.
HR and benefits professionals who take action to help their colleagues cope with these fears will end up helping their companies in the long run. Swift action now can bring employees some much-needed peace of mind while boosting the company’s bottom line.
Here are four strategies to reduce the fear of healthcare costs for your employees:
1. Boldly reassess your health insurance options.
When deciding how to reduce healthcare costs, the obvious place to start is with an audit of your health insurance offering. This has been the practice for years. But is it working? To drive real change, you might need to consider outside-the-box solutions. This could mean partnering with a new insurance company, providing additional plan options, or redesigning your entire healthcare strategy. Yes, change is scary, but taking the leap could have a huge impact on your employees’ welfare and your company’s bottom line.
Need some inspiration? Consider Health Rosetta’s blueprint. Dave Chase, founder of the organization, advocates for taking control of the healthcare supply chain by negotiating direct contracts with local providers and a pharmacy benefits administrator with competitive prices. If you cut waste and force healthcare partners to compete for your employees’ dollars, you could slash healthcare costs for your team in half. It’s a great way to bring employee cost sharing down while maintaining the quality of their care.
2. Offer a supplemental health insurance benefit.
If your employees are exposed to high deductibles and cost sharing, give them the option to enroll in additional coverage with a genuinely supplemental health plan—one that’s easy to use and covers an array of conditions your employees may face. With a plan that pays cash based on the diagnosis of a covered condition, your employees will feel much less stress about getting care if they have an unexpected illness or injury during the year. Instead of worrying about the financial fallout, they can focus on getting the care they need to recover quickly.
3. Improve healthcare literacy.
The annual cost of poor health literacy is estimated at a staggering $238 billion. Have you considered how this might be impacting your current health plan and costs? The bottom line is that too many employees don’t understand their health coverage and how it works. And let’s face it: This gap in literacy means costly choices like emergency room visits instead of telehealth calls.
But proactive HR and benefits professionals can change this. With easier access to simpler information, important reminders, and year-round support, employees will make smarter choices and will feel more confident about how to take care of themselves and their family’s health. One thing is clear: According to a recent interview with Dick Mucci, the former president of Lincoln Financial Group Protection, employees will need more guidance in the future, not less.
4. Choose benefits that help employees improve savings and build credit.
A health savings account (HSA) is a great way to reduce healthcare costs for employees and bring peace of mind. Innovative HSA providers like Bend HSA and Lively make it easy for your employees to manage their contributions, watch their healthcare savings grow, and ultimately reduce their healthcare costs.
Financial wellness benefits also can bring major relief to employees who are experiencing financial distress from medical bills. Instead of putting these expenses on credit cards or borrowing from predatory lenders, Salary Finance’s low-interest, salary-linked loans, for example, could help them get a great interest rate and make regular payments that help improve their creditworthiness.
Skyrocketing healthcare costs are placing immense financial strain on your employees. They’re spending thousands of dollars more on health care than they were just 10 years ago. If HR teams step up and revamp their healthcare benefits packages to reduce healthcare costs, alleviate fears, and empower employees to get the health care they need, they’ll see productivity gains and cost savings that have a huge impact on their company’s bottom line. That’s what I call a win-win.
Mike Zarrillo is the chief revenue officer at Brella Insurance, a company revolutionizing the supplemental health insurance industry with straightforward insurance and game-changing technology. Brella is designed to provide financial support to the millions of Americans who face financial hardships due to unexpected health issues. Zarrillo is an innovative and strategic sales leader experienced in the group, voluntary/supplemental, and benefits administration spaces.