HDHP growth comes with increasing education need
Manufacturing, healthcare, education and retail employers are offering more benefit choices to their employees, specifically high-deductible health plans and the voluntary benefits that accompany them. By analyzing benefit election choices made by workers in 260 companies across those four industries, cloud-based benefit provider Benefitfocus found that more employers are offering HDHPs alongside traditional plans.
With the rise in utilization of HDHPs, advisers should work with clients to communicate the value of incorporating voluntary benefits to protect employees from the out-of-pocket exposure that comes from such plans, says Jeff Oldham, senior vice president at Benefitfocus.
More manufacturers adopted HDHPs (61%) this year than any other type of employer, according to Benefitfocus’ State of Employee Benefits — Industry Edition report. The number of education industry employers offering HDHPs doubled to 44% over the past year. Slightly more than half of healthcare employers offered an HDHP in addition to traditional plans, which was up from 37% in 2016, according to Benefitfocus.
HDHP adoption also increased 30% among retail employees over the past year. Benefitfocus also found that nearly 40% of retail employees elected at least one of three income-protection voluntary benefits and 11% elected all three, which produced year-over-year increases of 77% and 1,000%, respectively.
“Educating employees on new options and the pros or cons of each plan in context of their own needs is as important as the plan offering itself,” says Oldham.
Oldham says benefit advisers should keep in mind that one size does not fit all when it comes to benefits packages. “It’s about giving a diverse workforce, which every industry and employer has, whether due to age or lifestyle, the option to pick what benefit will support them best,” he says.
For example, while the healthcare industry went from 48% of employers offering at least one accident, critical illness or hospital indemnity voluntary plan in 2016 to 57% in 2017, the manufacturing industry saw a greater leap in voluntary offerings, from 34% last year to 55% this year.
Overall, Oldham identifies two key takeaways from the report: Be sure clients have a wide selection of healthcare plans and voluntary benefits to fill coverage gaps, as well as proper education so that participants understand their choices.
“The perfect benefits package means nothing if an employee doesn’t know how to properly choose and use it,” Oldham says. “Brokers and advisers can do their part by strengthening benefits education so employees can make the best choices for their individual needs. Due to the additional risk and responsibility this new healthcare landscape places on employees, income-protection benefits, financial wellness and digital health will begin to play a more significant part in an employee’s tool box.”