Employee education may be the best medicine for healthcare costs
Wednesday, October 11, 2017
Open enrollment season is here, but not all employees may be thrilled about signing up for next year's health plan when costs continue to go up.
In a new survey by Bank of America Merrill Lynch, 79 percent of employees reported rising healthcare costs in 2016, which was up from 69 percent in 2015.
The 2017 Workplace Benefits Report, a national survey of 1,242 employees, found that those rising costs are putting workers' long-term financial goals in jeopardy. More than half of workers with increasing costs say they're now spending less or contributing less to their financial goals.
And two-thirds of them are spending less on entertainment and fun.
"We're finding people are redirecting their dollars because of health expenses," said Bob Kaiser, head of Health Benefit Solutions for Bank of America Merrill Lynch.
So why are health costs and insurance premiums going up so much anyway?
About half of the population has one or more chronic illnesses, according to the Centers for Disease Control and Prevention (CDC). Additionally, more than two-thirds of adults are overweight or obese. Add to that the longer lives of Americans today, costly drugs and new technologies, and you have a recipe for high costs, Kaiser says.
But the biggest factor? Many people don't have the information or education they need to even fully understand their own healthcare plans, Kaiser said.
"All the information is available, but people aren't being trained on it," Kaiser said. "People aren't becoming consumers on their healthcare."
And that's where employers come in. They can help alleviate some of this burden on employees by providing education on healthcare — and not just during open enrollment season, but throughout the year.
Kaiser offers three tips for employers.
1. Help employees understand health savings accounts (HSAs).
With the popularity of high-deductible health plans and the HSAs that usually come with them, it only makes sense to help employees fully understand their benefits.
It's important for employees to understand they don’t pay taxes on the money they put into the account as long as it’s used for medical expenses. They also have the option to take money of the account at any time, pay taxes on it and use it for nonhealthcare expenses.
"It's just smart money when people learn about it and do the math and analyze," Kaiser said.
2. Teach employees how to be consumers of their own healthcare.
It's OK to shop around for healthcare, Kaiser said. In fact, he recommends it.
"If you twist your ankle and you need to get an MRI, there are places you can get an MRI for different prices," Kaiser said. "Find the best value. Ask the insurance provider."
With most high-deductible plans, employees are essentially self-payers until they reach their deductible. So in some cases — say you're visiting the doctor but you're generally healthy and are unlikely to reach your deductible for the year — it could make more sense not to file an insurance claim, Kaiser says.
Providers may offer patients a much lower price on a treatment if they pay out of pocket.
"It works really nicely for general practitioners and chiropractors," he said.
3) Keep the education coming all year
Kaiser suggests finding creative ways to make education a continual part of the year.
It could be as simple as 10-minute education sessions employees can view on their mobile devices, providing incentives to put money into a health savings account or getting them actively involved in wellness programs.
"The most important thing is to get people educated," Kaiser said. "Equip employees with education, and make the education a continual part of the year."
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