A recent Kaiser Family Foundation study that shows about 56% of Americans carry more than $2,500 in medical or dental debt. And from our own Benefits Insights report results, we have found that only 10% of respondents feel prepared to take on a large medical expense, while 45% would feel panicked.
The Hartford released research in late 2022 that indicated 63% of U.S. workers feel their financial stress has increased over the past year and 56% say their financial stress negatively impacts their mental health.
This is a tough take for employers, who are doing everything to they can to provide coverage, support, and financial wellness resources. What will it take to move the needle for employees in this volatile economic environment? Inflation is real and healthcare costs only continue to rise, but employers understand that their employees are still looking to them to help.
Most experts agree that we’re facing a recession sooner rather than later. This comes in contrast to the Hartford study that shows 81% of U.S. workers are taking steps to prepare for a recession. With this level of uncertainty, it’s hard to know what approach to take from a benefits strategy perspective. And most benefits strategies operate more like an enormous cruise ship than a speedboat—it’s not easy to spin around and change course on a whim.
A knee-jerk reaction might be to scale back on costs by moving everyone into a high-deductible plan (HDHP). Paired with an HSA, especially one with a company “seed” or incentive, this strategy could cut down on member premiums and contain employer costs relatively quickly. But while HDHPs might truly be a cost-effective health plan for everyone, the higher deductibles on paper might cause just as much sticker shock as a surprise ER bill for your employees even with an HSA on board.
According to a 2022 VISA healthcare study on HSA users, three out of four non-HSA users know little or nothing about HSAs. That’s a huge hurdle to overcome with just a benefits email. For employees who don’t understand that their HSA contributions don’t “expire,” they might be more hesitant to send part of their paycheck to that account. 40% of non-HSA users said they’d sign up for an HSA if it would save them money.
PPO plans certainly feel more predictable and comfortable – for employers to offer and for members to keep enrolling in what is familiar. Paired with an FSA, members who opt into their consumer account probably feel very “covered” in case of a healthcare event. According to that 2022 VISA study on FSA users, 74% say they feel more able to plan and budget for healthcare expenses because of their FSA. Moreover, 54% of FSA users said they would have cut back on medicines and treatment over the course of the pandemic if they didn’t have an FSA.
So, we know that HSAs and FSAs can be a big part of a financial wellness strategy in providing that safety net and the ability to pay for unexpected healthcare costs. Once members begin to understand their options, they can make the best choice for their situation. Right?
Our Benefits Insights report consistently shows that 85% of employees rank themselves as “confused” about benefits. And we also know that these same employees typically spend less than 20 minutes per year making decisions about these benefits that cost them and their employers tens of thousands of dollars.
What members need more than anything is a guide (not a 200-page benefits guide) that can provide them legitimate help during the enrollment process to ensure they get into the right-fit plan for their financial situation and to understand how additional financial supports like FSAs, HSAs, or even voluntary benefits can provide peace of mind.
Guides don’t have to be paper- or PDF-based—in fact our own data shows higher engagement and adoption rates when tech-enabled solutions and services are in play:
Decision support technology is key, as members should be able to provide their information into the system regarding financial preparedness, overall health, risk tolerance, and healthcare history. Ideally, a good benefits administration system like Benefitsolver® with the MyChoice® Recommendation Engine can match employees to the best-fit benefits package to cover their needs. Members can access their health plan information and their consumer accounts, such as their FSA, HSA, or HRA all in the same system to ensure they know how they’re covered.
Learn how MyChoice Accounts provides a simple way for members to engage with their consumer directed healthcare and how they’re covering those expected and unexpected healthcare costs.
