There are many problems facing HR professionals and benefits administrators today. If this is your role, we know you have a thousand to-dos. It can be a “one step forward, two steps back” battle. You can feel like you’re trying to climb a mountain. One of the “mountains” you may be facing is combating rising healthcare costs.
The Challenge
Rising healthcare costs are one of the main concerns for Americans. According to research from the Kaiser Family Foundation, two-thirds of the American public view lowering out-of-pocket healthcare costs as a top priority for the current administration. Kaiser’s research also shows that over the last 7 years, average family premiums have risen 20 percent. Although this may seem high, it is actually a much smaller increase than previous years. Between 2006 and 2011, health premiums rose 36 percent, and between 2001 and 2006, premium prices rose 63 percent. The Kaiser report notes “We’re seeing premiums rising at historically slow rates, which helps workers and employers alike, but it’s made possible in part by the more rapid rise in the deductibles workers must pay.”
Although rising premium rates are an on-going challenge for employers, a primary (and popular) method to overcome this is to implement a high deductible health plan.
Overcoming the Challenge
Implement an HDHP with Complementary Accounts
Research from the 2016 Aon Health Survey Report reveals 64 percent of employers have implemented a high deductible health plan (HDHP) as a choice for employees. Of those, more than seven in ten employers (71 percent) also offer a health savings account with employer funding.
An additional tool can be pairing an HSA-HDHP with a Limited Flexible Spending Account (or Limited FSA).
By offering an HSA with a Limited FSA, you help reduce healthcare costs. Employees can use two tax-advantaged accounts to cover many primary eligible expenses. The HSA can be used for a variety of health expenses, while the Limited FSA provides coverage exclusively for vision and dental expenses. If employees enroll in a Limited FSA they have the option to forgo enrolling in vision or dental insurance, avoiding the need to pay those premiums.
In the end, they walk away with lower premiums and two pre-tax accounts to keep even more money in their pockets. And you, as the employer, can hire more people while keeping healthcare costs manageable. You also still receive a tax write off. Learn about more options and solutions for your company.
Increasing Adoption and Use
Regardless of which plan(s) you implement, if your employees don’t sign up for them, they can’t do much good. The final step to overcoming the challenge is adoption.
When it comes to HSA adoption, we know it can be hard. Employees tend to enroll in what they’re used to, which is often a higher premium plan with lower deductibles. But HSAs offer a triple tax benefit that many employees can take advantage of. They just might not be aware of it… yet.
Download our HSA Adoption Guide and Case Study to learn how you can be an HR superhero and save your company from low adoption rates.
Facing Rising Healthcare Costs
The only way to get over the mountain is to take the first step. We’re here to help you find your footing as you go through this journey. Healthcare is a changing landscape, and HR professionals aren’t provided harnesses for safety. But there are other resources available for you to manage the challenge of rising healthcare costs. How can we help you? Reach out to us today to discover your options.
