With more than half of all private sector employees enrolled in high-deductible health plans, it’s important that employers have in place certain protocols to ensure that they are a success.
As health insurance costs have risen, more employers have started offering their employees this option as the upfront premiums are often lower than with other plans. The trade-off, however, is that workers have a higher deductible — meaning they have to pay for a set amount of medical care and prescription drugs before the plan’s benefits truly kick in.
The average HDHP deductible for self-only coverage was $2,000 in 2023, while the minimum deductible that a plan must have to qualify as an HDHP is $1,600 ($3,200 for family coverage).
The key to ensuring that the HDHP is a success in part comes down to avoiding four common mistakes.
1. Failing to offer a health savings account
The idea behind HDHPs is that the money employees save on premium can be funneled into an attached HSA, which can be used to reimburse out-of-pocket medical expenses.
HSAs are tax-advantaged accounts that allow enrollees to save up to pay qualified medical expenses. They decide how much money they want to transfer to their HSA each pay period — funds that are not subject to taxes. The employer can also contribute to its employees’ HSAs to encourage participation.
2. Failing to gauge the employee population
HDHPs are not a good fit for everyone. While they are for those who do not use a great deal of health care services, they can be burdensome to people who use medical services often, have chronic conditions or are middle-aged and older.
With that in mind, before offering an HDHP you need to know it is right for your organization. To do this, you can focus on a number of factors like the average age of your workers, their general health status and understanding of health care and their insurance. Some of this information can be gathered by doing an anonymous survey of your staff.
Knowing this information is crucial to understanding whether an HDHP is the right fit for your crew. For example, if a majority of the employees are older and/or have certain health conditions, pushing an HDHP on them may not be a good move as their out-of-pocket costs may rise significantly and outweigh any savings from lower premiums.
3. Failing to educate your staff
Workers may be hesitant to enroll in an HDHP if they don’t understand it, and particularly when they see how high the deductible is.
That’s why training is essential to ensure that your employees understand how these plans work and how to get the most out of them.
One of the focuses should be on how employees can take control of their health expenditures and shop around for certain medical procedures that a doctor may order. Providers in an insurer’s network may charge vastly different rates for the same procedure.
You can also explain that those who rarely use their health insurance can save a bundle on their premiums and use those savings to bolster their HSA.
4. Not offering supplementary benefits
Employee behavior and lifestyle are significant factors in health status and can have a huge impact on the cost of health care.
Offering wellness programs can boost employees’ overall health, help them lose weight or quit smoking. Other voluntary benefits like critical illness insurance can fill in the gaps when employees have a high deductible.
For example, if someone with critical illness insurance had a heart attack, the policy would pay for medical expenses and possibly missed time from work. If the employee’s deductible is $5,000 and the heart attack payout from the critical illness policy is $5,000, the enrollee wouldn’t really have to pay anything toward their deductible.
After that, their HDHP would start picking up the tab through coinsurance, until the out-of-pocket maximum was reached. Then their insurance would cover everything at 100%. Other voluntary benefits employers often offer staff in HDHPs include:
Accident insurance,
Cancer insurance, and
Life insurance.
The takeaway
Introducing an HDHP to your employees can be a fraught exercise as they learn that they’ll face higher out-of-pocket costs for medical services. But these plans can be beneficial to many people, and those who understand how they work and how they may benefit from their plan will be more satisfied with their coverage.
With multiple generations working side-by-side in this economy, the needs of your staff in terms of employee benefits will vary greatly depending on their age.
You may have baby boomers who are nearing retirement and have health issues, working with staff in their 30s who are newly married and have had their first kids. And those who are just entering the workforce have a different mindset about work and life than the generations before them.
Because of this, employers have to be crafty in how they set up their benefits packages so that they address these various needs.
But don’t fret, getting something that everyone likes into your package is not too expensive, particularly if you are offering voluntary benefits to which you may or may not contribute as an employer.
Think about the multi-generational workforce:
Baby boomers – These oldest workers are preparing to retire and they likely have long-standing relationships with their doctors.
Generation X – These workers, who are trailing the baby boomers into retirement, are often either raising families or on the verge of becoming empty-nesters. They may have more health care needs and different financial priorities than their older colleagues.
Millennials and Generation Z – These workers may not be so concerned about the strength of their health plans and may have other priorities, like paying off student loans and starting to make plans for retirement savings.
Working out a benefits strategy
If you have a multi-generational workforce, you may want to consider sitting down and talking to us about a benefits strategy that keeps costs as low as possible while being useful to employees. This is crucial for any company that is competing for talent with other employers in a tight job market.
While we will assume that you are already providing your workers with the main employee benefit – health insurance – we will look at some voluntary benefits that you should consider for your staff:
Baby boomers — Baby boomers look heavily to retirement savings plans and incentives, health savings plans, and voluntary insurance (like long-term care and critical illness coverage) to protect them in the event of a serious illness or accident.
You may also want to consider additional paid time off for doctor’s appointments, as many of these workers may have regular checkups for medical conditions they have (64% of baby boomers have at least one chronic condition, like heart disease or diabetes).
Generation X — This is the time of life when people often get divorced and their kids start going to college. Additionally, this generation arguably suffered more than any other during the financial crisis that hit in 2008. You can offer voluntary benefits such as legal and financial planning services to help these workers.
Millennials and Generation Z — Some employee benefits specialists suggest offering these youngest workers programs to help them save for their first home or additional time off to bond with their child after birth.
Also, financially friendly benefits options, such as voluntary insurance and wellness initiatives, are two to think about including in an overall benefits package.
Voluntary insurance, which helps cover the costs that major medical policies were never intended to cover, and wellness benefits, including company-sponsored sports teams or gym membership reimbursements, are both appealing to millennials and can often be implemented with little to no cost to you.
As the economy continues roaring, the market for top talent stays exceedingly competitive. Multiple studies have consistently shown that a robust set of employee benefits is a vital component of an overall compensation package.
But it’s tough for smaller companies to compete with their large counterparts, who have the advantage of economies of scale. As a result, many employers are increasingly turning to voluntary employee benefits, which allow them to provide valued, high-demand benefits to employees at little or no cost to the company.
How voluntary benefits work
Voluntary benefits are arranged by employers but either paid for by staff via payroll deduction or by the employers themselves. Businesses generally set up a menu of options that their workers can select from for themselves, based on their own needs.
The employer deducts any fees or premiums for these benefits from employee paychecks and forwards them in a single batch to the benefit vendors.
Once the employee enrolls in a voluntary benefit plan, payroll services companies routinely automate this process for employers, making ongoing benefits administration hassle-free for small businesses.
And best of all, because premiums and fees are often paid by the employees, even small companies can provide popular and highly valued benefits for little or no cost.
Popular voluntary benefits
There are several types of voluntary employee benefits on the market today, with more innovative new benefits and perks rolling out every year. However, the following are among the most in-demand by employees and commonly offered by their employers:
Dental and vision insurance coverage
Disability insurance coverage
Life insurance — can be term or cash value
Legal assistance/prepaid legal services
Identity theft insurance
Fitness/health club memberships
Long-term care insurance
Financial planning/counseling services
Accident insurance
Hospital indemnity plans
Pharmacy discount plans
Critical illness insurance (e.g., cancer insurance)
Pet insurance.
Employees can often buy these benefits and services via their employer’s group voluntary benefits plan much more cheaply than they could buy them on their own.
Voluntary benefits have been becoming more popular among employers in recent years as unemployment falls. One reason: More employers are offering high-deductible plans as health insurance costs continue to increase.
Critical illness and hospital indemnity policies have seen big gains in enrollment as workers turn to them to help cover those deductibles and copays if they have a costly health event like cancer or another critical illness diagnosis.
According to a recent LIMRA study, seven out of 10 employers surveyed reported that they believe offering voluntary benefits improves employee morale and satisfaction.
A 2023 Harris Interactive poll found that when employers offer voluntary benefits, 55% of workers, on average, report that they are satisfied with their employer’s overall benefit mix. Where the employer did not offer voluntary benefits, the satisfaction rating fell to 32%.
Best practices
Don’t overwhelm employees with too many benefit choices at the same time. Roll them out a few at a time, starting with life insurance, dental/vision and/or disability insurance. These are proven high-participation programs.
Match benefits to your employees’ life stages. Millennials have different needs and interests than baby boomers.
Put effort into your benefits education and communication plan.
Use a variety of different communication tools. Embrace digital and in-person communication, in addition to printed brochures — especially for millennials.
Despite group health plan inflation increasing again in 2024, a new study has found that employers continue staying the course in not shifting costs to employees who may already be overstretched by inflation and medical bills.
Instead, 64% of employers say they are looking for ways to boost their health and well-being offerings to better meet employee needs, according to Mercer’s “Survey on Health & Benefit Strategies for 2024 Report.” That’s on top of the 25% who said they had already enhanced their slate of benefits in the last two years to better attract and retain staff and meet employees’ needs.
With health care costs expected to jump 7% this year from the 2023 level and insurance premiums reflecting that increase, many employers will be challenged to balance benefit options with cost-controlling measures, according to the report.
“Employers are looking to enhance benefits, but they need to do it carefully. Not by adding bells and whistles, but by looking for opportunities to add value,” Mercer wrote in its report. “Sometimes that means filling gaps in current offerings with more inclusive benefits. It might mean revisiting time-off policies to give employees more flexibility.”
With significant cost-shifting off the table for most employers, employers will have to get creative to meet the challenge of offering benefits that workers want and need, and health care they can afford, while also managing cost growth.
Addressing employee costs
Some tactics employers are using to boost affordability for their staff include:
Offering at least one free employee-only coverage in at least one medical plan.
Making larger health savings account contributions to lower-paid employees.
Using salary-based contributions, with lower-wage staff paying less than those earning more.
Offering programs to help employees manage specific health conditions.
Taking action to address the cost of specialty prescription drugs.
Focusing on virtual care.
Steering members to quality care with a navigation or advocacy service (beyond the health plan’s standard service).
Limiting plan coverage to in-network care only (in at least one plan).
Other benefit enhancements
Employers are also looking at enhanced benefit options, such as:
Support for women’s health — According to Mercer, 46% of employers plan to offer benefits or resources to further support women’s reproductive health, up from 37% last year.
This includes:
Preconception planning.
Menopause benefits (the percentage of employers planning to offer menopause support has more than tripled since last year’s survey).
Lactation help resources.
Post-partum depression resources.
Childcare benefits and resources — Employers can help support caregivers for the long term with flexible hours and family leave and time-off policies. Some employers also provide subsidized childcare benefits.
Increasing employee flexibility — More employers are also offering paid time off for all kinds of families (like those with LGTBQ parents). Other options being offered include:
Hybrid work options (80% of employers offer or plan to offer these),
Paid time off to volunteer (49%),
Remote work options (47%), and
Four-day workweeks or consolidated schedules (22%).
The takeaways
With group health plan costs continuing to increase amid a highly competitive job market, employers need to take a balanced approach to their benefit offerings, while being mindful of the increasing out-of-pocket expenses their employees may face when accessing health care.
Your decisions in also offering enhanced benefits will obviously be based on your budget, but also on your employee population. Call us to discuss options.
As a record amount of U.S. workers struggle with mental health issues and stress, more employers are offering new chatbot apps to help them.
A survey this past summer of 457 employers by Willis Towers Watson found that 24% of them offer a “digital therapeutic” for mental health support.
Some 15% of the businesses surveyed were considering adding this type of offering in 2024 or 2025, the professional services company found. Typically, these apps are provided as a voluntary or wellness benefit.
Some apps feature chatbots that can hold counseling-type conversations with users, while other wellness apps can help diagnose depression or identify people at risk of harming themselves.
At the same time, these chatbots and other mental health apps have generated controversy, with some experts warning that they are not equipped to handle serious mental health issues and that they are no replacement for human therapists.
However, as long as there are not enough therapists in the U.S. to meet demand and artificial intelligence continues to evolve, it’s likely these chatbots are here to stay.
Examples
Recently Amazon announced that as part of its employee benefits package it would offer the therapist-like app Twill. The platform says that Taylor, its clinician-trained chatbot, “learns, interprets and understands each person’s needs and goals to guide them towards personalized care.”
Another product on the market is Wysa, an AI-driven app that received a breakthrough designation by the Federal Drug Administration, putting it on track for fast-track approval. This came after an independent peer-reviewed clinical trial, published in the Journal of Medical Internet Research, which found the app to be effective in the management of chronic pain, and associated depression and anxiety.
Also on the market is Woebot, which combines exercises for mindfulness and self-care (with answers written by teams of therapists) for postpartum depression.
Pros and cons
The apps vary in how much they incorporate AI — and in how much leeway they give AI systems. These companies say they build safeguards into their apps and that they have certified psychiatrists that oversee the applications.
Proponents of mental health apps and chatbots say they can address issues like anxiety, loneliness and depression. Also, chatbots and apps can provide 24-hour support and they can meet the demand of people who may have a hard time finding a counselor or fitting therapy into their schedule.
On the other hand, there is a paucity of data or research showing how effective, or how safe, they are — and the majority have not been approved by the FDA.
Many of these mental health apps have different specialties, for example: treating anxiety, attention-deficit/hyperactivity disorder or depression. Others can help diagnose mental health problems or predict issues that can lead to self-harm.
Often, the apps will include disclaimers that they are “not intended to be a medical, behavioral health or other health care service” or “not an FDA-cleared product.”
Also, there have been concerns raised about some of these apps. In March 2023, the Federal Trade Commission reached an $8 million settlement with BetterHelp, an app counseling service, over allegations that it shared user data with advertising partners.
Another company, Replika, updated its app last year after users complained that its chatbot engaged in overly sexual conversations, and even harassed them.
The takeaway
Mental health care is an increasingly important part of employee benefits offerings. Since the onset of the COVID-19 pandemic, 94% of employers have made investments in mental health care, according to research by Mercer.
As these apps improve and become more widespread, it’s likely your employees will encounter them when they use their group benefits, or they will be among your voluntary benefit offerings.
The Equal Employment Opportunity Commission has issued proposed language to update its guidance on harassment in the workplace.
The proposed guidance “reflects notable changes in law, including the Supreme Court’s 2020 decision in Bostock vs. Clayton County (which held that LGBTQ individuals are protected from workplace discrimination under Title VII), the #MeToo movement and emerging issues, such as virtual or online harassment,” the EEOC wrote in its introduction to the proposed guidance.
The agency polices discrimination in American workplaces, and harassment falls under that banner. Between 2018 and 2022, 35% of the charges of employment discrimination filed included an allegation of harassment based on race, color, national origin, religion, sex (including pregnancy, sexual orientation and transgender status), age, disability or genetic information.
Employers should read the guidance to understand the many forms of harassment — and in particular harassment against any LGBTQ workers, since they are the most recent group to receive protected status.
LGBTQ harassment
The Bostock ruling found that harassment based on sexual orientation and gender identity, including how identity is expressed, constitutes sex-based discrimination. According to the EEOC, guidance this type of harassment can manifest in the workplace via:
Physical assault;
Epithets regarding sexual orientation or gender identity;
The denial of access to a bathroom or other sex-segregated facility consistent with the individual’s gender identity;
Intentional and repeated use of a name or pronoun inconsistent with the individual’s gender identity (which is known as “misgendering”); or
Harassment because an individual does not present in a manner that would stereotypically be associated with that person’s gender.
The guidance provides examples that illustrate the many nuances of harassment.
In its guidance, the EEOC cites the following example of indirect LGBTQ harassment:
“Keith and his colleagues work in an open-cubicle style office environment, and they frequently make derogatory comments about gay men and lesbians.
“Horatio, who is gay, overhears the comments on a regular basis and is offended by them, even though they are not directed at him.
“Based on these facts, the conduct is facially discriminatory and subjects Horatio to harassment based on sexual orientation (which is a form of sex-based harassment), even though he was not specifically targeted by the comments.”
It also offered this example of harassment based on gender identity from a case in Philadelphia:
“Jennifer, a cashier at a fast food restaurant who identifies as female, alleges that supervisors, coworkers, and customers regularly and intentionally misgender her.
“One of her supervisors, Allison, frequently uses Jennifer’s prior male name, male pronouns, and “dude” when referring to Jennifer, despite Jennifer’s request for Allison to use her correct name and pronouns; other managers also intentionally refer to Jennifer as “he.”
“Coworkers have asked Jennifer questions about her sexual orientation … and asserted that she was not female. Customers also have intentionally misgendered Jennifer and made threatening statements to her, but her supervisors did not address the harassment and instead reassigned her to duties outside of the view of customers.
“Based on these facts, Jennifer has alleged harassment based on her gender identity.“
What you can do
The EEOC recommends that employers create an effective anti-harassment policy, which is widely disseminated, and that:
Defines what conduct is prohibited.
Requires that supervisors report harassment when they become aware of it.
Offers multiple reporting avenues for an employee, during both work hours and other times (weekends or evenings).
Identifies accessible points of contact to report harassment (complete with contact information).
Explains the employer’s complaint process, including the ability to bypass a supervisor, along with anti-retaliation and confidentiality protections.
For an employer’s complaint process to be effective, at a minimum, it should provide:
For prompt and effective investigations and corrective action;
Adequate confidentiality protections; and
Adequate anti-retaliation protections.
The final step in it all is training your employees and supervisors on your anti-discrimination and harassment policy. You can use the EEOC guidance to provide examples of harassment and provide information about your employees’ rights if they experience workplace harassment.
Supervisors and managers should receive additional training, including the importance of taking complaints seriously and not retaliating against anyone who makes a complaint.
