To control health care expenses, U.S. businesses are continuing to switch to health plans that shift a greater share of costs to employees. According to benefit provider Aflac's 2013 Aflac WorkForces Report, published in April, more than half (53 percent) of employers have implemented a high-deductible health plan (HDHP) over the past three years—a trend that shows no sign of slowing.
The Aflac report is based on a survey of nearly 1,900 benefits decision-makers and more than 5,200 U.S. workers, conducted in January 2013.
The U.S. government predicts that consumer out-of-pocket health care expenses will reach an average of $3,301 a year for each household by 2014, up from $2,500 in 2009, according to research cited in the report. These costs are in addition to health insurance premiums.
But despite the move toward HDHPs and increased cost-shifting to employees, more than half of workers (55 percent) say they have done nothing to prepare for possible changes to their health care, according to the report, which found:
- 62 percent of workers believe their medical costs will increase, and 23 percent are saving money for potential increases.
- Nearly half (46 percent) have less than $1,000 in savings to use for out-of-pocket expenses associated with an unexpected serious illness or accident, and 25 percent have less than $500.
Finding a Solution
Notably, the report revealed that consumers have a low level of knowledge about tax-advantaged health care savings:
- 32 percent are not very knowledgeable or not at all knowledgeable about health savings accounts (HSAs).
- Almost half (49 percent) are not very knowledgeable or not at all knowledgeable about health reimbursement accounts (HRAs).
- 25 percent are not very knowledgeable or not at all knowledgeable about flexible spending accounts (FSAs).
“Ready or not, [employees] are being put in control of their health insurance decisions—and that means having to make choices that could have a big impact on personal finances,” said Audrey Boone Tillman, executive vice president of corporate services at Aflac. “If employers aren’t offering guidance to workers on how to make crucial benefits decisions, the responsibility lies in the hands of consumers to educate themselves.”
Tillman suggests encouraging employees to:
- Sit down with HR professionals to ask questions and have policies explained. Understanding key terms, deductible limits, and co-pay and co-insurance requirements are the first step to making sensible decisions.
- Do homework. Figure out their budget for health care by looking at their paycheck, savings account, previous records and bills to understand how much health care actually now costs.
- Learn more about all policies offered by their employer and determine what kind of available plan meets their needs.
Helping workers learn to effectively manage their health care choices presents an opportunity for employers to demonstrate they care about their employees, and to curb potential absenteeism, low morale and low productivity, Tillman said.
Stephen Miller, CEBS, is an online editor/manager for SHRM.
Related SHRM Articles:
Levers of Change: Employers Respond to Shifting Health Care, SHRM Online Benefits, March 2013
On Private Health Exchange, Choice Drives Satisfaction, SHRM Online Benefits, March 2013
Consumer-Driven Decision: Weighing HSAs vs. HRAs, SHRM Online Benefits, updated March 2013
Study: CDHP Customers Lowered Health Risks and Costs, SHRM Online Benefits, February 2013
Consumer-Driven Health Plan Participants More Cost-Conscious, SHRM Online Benefits, December 2012
SHRM Online Benefits page
SHRM Online Health Care Reform Resource Page