Healthcare Benefits in 2017: What Employers Have to Say

It’s been a tumultuous few years for the healthcare benefits community, and as the Trump administration takes office, the changes are just beginning. To address this, the Healthcare Trends Institute recently completed a survey of benefits professionals from across the United States to learn more about the trends, preparations and expectations for the coming year.

Trends in Healthcare Benefits: 2017 Healthcare Benefits Benchmark Study

The 2017 Healthcare Benefits Benchmark Study was completed by over 250 human resources executives, benefit specialists and other benefit decision makers from organizations ranging in employee size from less than 50 to over 2,500. Below, we will share some of the key insights and what they mean for employer groups in 2017.

Among the notable considerations for employers heading into 2017:

Employers Buying into Healthcare Consumerism

Since the passing of the Affordable Care Act in 2010, employers have been encouraging their employees to take more control of their own healthcare decisions by offering a high-deductible health plan (HDHP).

The Move to HDHP

High deductible health plans are plans that have minimum deductibles of $1,300 for individuals and $2,600 for families. One of the main selling points of an HDHP is that it combats rapid increases to monthly premiums for employers and employees, as shown by the relatively flat Medical Cost Trend over the past 4 years. The increasing popularity of these plans grew as a result of rising healthcare costs and the passing of the ACA, and pose benefits for both employers and employees:

• For employees, high deductible health plans were designed to help them to lower premiums, focus on preventive care, shop around for affordable care, use emergency rooms only for emergencies, and ultimately take more control of their healthcare decisions.
• For employers, HDHPs helped to combat rising premiums while shielding them from the Cadillac Tax, which was initially set to begin in 2018.

With all of this in mind, 2016 marked a milestone for healthcare consumerism, with the amount of organizations offering HDHPs jumping from 28% four years ago to 39% in last year’s survey to 53% in this year’s survey.

Pairing HDHP with Consumer-Oriented Accounts (HSA, HRA, FSA)

With this rise in HDHPs came an increase in the number of employees being enrolled in a Health Savings Account, Healthcare Reimbursement Arrangement, or Flexible Spending Account, as this year’s survey found that 51.5% of respondents’ employees are enrolled in one or more of these plans/arrangements.

By offering one or more of these arrangements, employers are demonstrating that they are committed to helping employees afford out-of-pocket healthcare expenses if and when they arise, making people-first decisions rather than money-first ones.

Notably, however, the move to HDHP does require effective communication, as there is a great deal of misunderstanding among consumers about why these plans help them and how they can use them effectively.

Focusing on the Advantages

Organizations are relying heavily on their benefits programs to recruit, retain, and engage employees. Even if many employers have moved away from the traditional forms of healthcare benefits that were prevalent in the industry decades ago, the benefits offerings of today still can represent a significant investment in happier, healthier, and more engaged employees. Additionally, a well-defined benefits strategy can play a major role in improving company reputation as a leader and one that cares about its employees. In BenefitsPro’s Analysis of our whitepaper:

Respondents were asked to rank on a scale of 1 to 10 how strongly they agree with the statement “the quality of a benefits package impacts the reputation of my company,” with 10 being “strongly agree.” Not surprisingly, given that such packages are looked upon as recruiting tools, 67 percent put the statement at 7 or higher, with nearly a quarter choosing “strongly agree.”