A Crack in the Foundation
This research brief from our 4th Annual Workplace Benefits Study shows that while working Americans continue to rely on their employee benefits as the foundation of their household’s financial protection, attitudes toward the value of benefits declined since 2014. Learn about the reasons behind this troubling shift and what it means for both working Americans and for employers.
Working Americans are feeling a financial pinch
3 in 5 working Americans say their employee benefits contribute positively to their financial protection. It is evident they rely on the financial products and services available through the workplace. But, as employers focus on strategies to control benefits costs, such as implementing high deductible health plans (HDHPs) and increasing cost-sharing, the rise in out-of-pocket costs has workers feeling the financial pinch – and valuing their employee benefits less.
This is reflected in a decline in Guardian’s Benefits Value Index (BVI) score* – a measure of the perceived value of employee benefits - from 7.1 in 2014 to 6.7 in 2016.
Increased out-of-pocket medical expenses are affecting working Americans’ financial well-being and health care behaviors
A majority of working Americans are unable to afford an unexpected medical expense of $3,000. Most would not be able to pay from a checking or savings account and would need to rely on a variety of other means.
An unintended consequence of this financial stress related to the cost of health insurance appears to be that employees are taking risks with their health, by skipping doctor visits, delaying recommended procedures and more. This raises issues not only about the potential long-term health impacts on employees but also long-term implications for workforce productivity and costs for employers.
It’s important to evaluate high deductible health plans pros and cons
Growing employer cost strategies including implementing HDHPs or shifts in cost-sharing may have financial benefits, but they also bring on new stresses. As employers turn to HDHPs, there are steps that can be taken to better equip working Americans in managing their personal health care costs and services, such as:
- Greater use of health savings accounts (HSAs) in conjunction with high deductible health plans
- More educational efforts to help workers use HSAs
- Wider access to supplemental health benefits like hospital indemnity and accident insurance