By Rob Piazza

The rising cost of health care is constantly in the news; with even Amazon, JPMorgan Chase and Berkshire Hathaway recently announcing they're joining forces to tackle our expensive system.

The strength of an employer’s benefits package is a big differentiator, putting employers in an ongoing battle to keep health insurance costs down without cutting the quality of employee benefits. To absorb these costs, we’ve seen a trend toward health care consumerism, with increased financial responsibility for consumers in the form of rising health care plan deductibles and increased out-of-pocket responsibilities. But payers – whether carrier or self-insured employer – can do more to lower the costs for themselves and their members.



It’s now possible to use data and analytics to fuel more creative plan design, matching employee segments and individuals with the right combination of health and voluntary benefits. Employers will find that they can truly understand what is driving their cost, build targeted communication plans to drive behavior change and benefit selection, and monitor that performance so adjustments can be made quickly to get results.

This is something that was clear in our annual State of Employee Benefits Report, released by Benefitfocus, with anonymized benefit election data from 1.3 million employees.

How employers are helping their employees navigate health care costs
The data show a continued shift toward consumer-directed health care, with the rate of employers offering at least one high-deductible health plan (HDHP) increasing more than 20% since 2016. 65% of employers offered a HDHP and a traditional plan in 2018, vs. 53% in 2016.

Preferred provider organization plans (PPOs) remain the most popular amongst employees (with 48% of employees enrolling vs. 35% in HDHPs). This is often due to unfamiliarity amongst consumers with consumer-directed health plans as, for years, they simply had one very rich health maintenance organization plan (HMO) or PPO option. Now, there is an opportunity to "rightsize" health coverage, but it requires some education to help consumers make the right decisions.

One way employers are helping employees navigate out-of-pocket responsibilities is with health savings accounts (HSAs). Participation in HSAs among eligible employees – those in HDHPs – grew by more than 60%, from roughly 50% in 2017 to 81% in 2018. Millennials were especially eager to adopt these accounts, nearly doubling their HSA participation from 2017. We’re also increasingly seeing employers contribute more to HSAs to incentivize employees to use lower-cost health options.

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