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Voluntary Can Ease Clients’ Growing Health Care Worries

The more things change, the more they stay the same, right? Well, not always. When it comes to the way insurance is purchased, paid for and delivered in the United States, things aren’t the same at all.

No one has a crystal ball that predicts exactly what human resources (HR) professionals will observe and experience this year, but it’s easy to make a few educated guesses based on the current health care atmosphere. Here are some key trends and issues to watch for in 2015.

[1] The Emergence of Private Insurance Exchanges
Privately run exchanges are steadily gaining momentum and are one-stop shops for the purchase of employer-provided health insurance. Seven percent of companies surveyed as part of the 2014 Aflac WorkForces Report moved employees to private exchanges in 2013, and another 7 percent planned to do so in 2014. Of those companies, 37 percent said they made the decision because moving workers to private exchanges would be financially advantageous for their companies. A separate survey found that employers’ interest in private exchanges for active employees continues to grow, but many are awaiting additional evidence that exchanges can deliver more value than their traditional self-managed programs, according to the Towers Watson 2014 Health Care Changes Ahead Survey.

Separate and different from government marketplaces, private exchanges are a simple way for employers to offer comprehensive worksite benefits. With private exchanges, businesses designate an amount they’ll pay for coverage. Employees then compare insurance plans and purchase a plan that’s right for their individual needs. This type of fixed-stipend approach helps employers control costs. If the plan selected by an employee exceeds the stipend amount, the remaining cost is deducted from the worker’s paycheck.

[2] Shifting Accountability
Remember when employees who enrolled in employer-sponsored health insurance plans generally paid the same rates, regardless of their physical condition or behavior? Times have changed. The new world of health care benefits allows for varying rates based on factors such as smoking and enrollment in wellness programs. The result is an increase in employee accountability because workers now have a bit of control over their health care spending.

Many workers view wellness and incentive programs favorably – perhaps because these programs provide them the opportunity to keep more of their paychecks. According to the Aflac study, 79 percent of employees at least somewhat agreed they would be willing to change their lifestyle habits in exchange for lower insurance premiums. What’s more, 87 percent said it’s fair to reward employees for becoming healthier with lower premiums or incentives such as gift certificates or extra days off.

On the provider side of the accountability equation, some hospitals and insurers have teamed up to shift pricing models to value-based outcomes. At the same time, companies are trying to keep costs under control with bundled pricing. Some are even offering certain high-cost procedures without asking employees to share the expense, provided the procedure is performed at a preferred hospital or workers see a designated physician.

[3] A Growing Need for a Consumer Safety Net
As employees assume more responsibility for their health care choices, the need for strong safety nets to help protect their finances becomes more crucial. Rising health care costs also continue to be a concern. According to a recent survey, health insurance premiums have risen by 80 percent since 2013. During the same period, wages increased 1.8 percent and inflation increased 1.1 percent, according to the Kaiser Foundation 2013 Employer Health Benefits Survey.

Many Americans are not comfortable with their burgeoning health care responsibilities. Four in 10 workers (43 percent) at least somewhat agreed they will have a difficult time managing their health care coverage and decisions because they already have difficulty sticking to a budget. Just over half (51 percent) said they would prefer not to have more control over their health care expenses because they don’t have the time or knowledge to manage them effectively.

These concerns are a natural opportunity for HR experts to use their expertise. By providing employee education and decision-making tools, benefits professionals can help workers make wiser decisions about their health care benefits and choices.

[4] The Voluntary Solution
Workers’ concerns about financial security open the door to conversations about how voluntary insurance such as accident, critical illness and hospital plans help protect them from out-of-pocket costs that could result in unexpected debt. Benefits from voluntary insurance options are paid directly to the policyholder, regardless of what type of major medical coverage they have in place.

Payments from voluntary policies provide employees with peace of mind because they can be used in any way workers see fit – whether it’s to offset high deductibles or copayments, or to help pay the bills that continue to roll in even when they are too sick or hurt to work. Here’s what one real-life policyholder had to say:

“My diagnosis of uterine cancer in October 2013 was very stressful not only for me, but [for] my family as well. It seemed as if a ton of bricks had fallen on me, and all I could think of was how I was going to pay my bills and what kind of a burden I would be to my family. I got my first benefits check two weeks before my actual surgery. From that time on, all my worries of being the sole breadwinner subsided. I no longer had to worry about how I was going to pay my bills. What a relief; it felt like that ton of bricks had just been lifted, and I could breathe again.”

Simply put, voluntary insurance helps workers protect their financial well-being in the event of a serious accident or illness. What’s more, it’s also a win for employers: Companies can offer their workers voluntary insurance with no direct effect on their bottom lines. Employees decide whether to apply for coverage, and they are responsible for paying the premiums.

The HR Forecast
Changes to the U.S. health care system are coming fast and furious, and the demand for professional benefits advice is more critical than ever. It doesn’t take a fortuneteller to see that HR experts will be a much-needed information source for employees confused about what health care reform means for them.

The guidance of benefits experts will be integral this year and beyond as workers adjust to the changing health care landscape and look for the best solutions for protecting their families’ health, well-being and income in a new era of insurance possibilities and responsibilities.


 

Tye Elliott, a 20-year insurance industry veteran, is Aflac’s vice president of core broker sales. Tye may be reached at [email protected] [email protected].


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