Supporting employee health in a cost conscious climate

Balancing employee health care coverage with affordability is an ongoing challenge for employers. Getting this right is critical – and the stakes are high. Health care benefits plan a key role in attracting and retaining talent. They’re also an essential component in whole-body employee wellness, with physical, financial and mental health all interconnected. In addition, employers recognize that workplace wellness is linked to workplace productivity. For all these reasons, let’s take a look at strategies employers are implementing to help support employee health in a cost-conscious climate.

High-deductible health plans (HDHPs) typically offer lower monthly premiums than traditional health insurance plans, thereby offering the opportunity to save your company and your employees money. HDHPs may appeal especially to younger or healthier employees who don’t require frequent medical visits or supplies. These employees may opt to pay out-of-pocket as necessary vs. paying monthly for more expensive coverage they may not need.

Another attractive feature of an HDHP is the ability to pair it with a Health Savings Account (HSA) to help employees pay for out-of-pocket health care expenses and prepare for the unexpected and future expenses, including in retirement. HSAs can help employees’ health care dollars go further through potential tax savings² – federal income tax-free contributions, tax-free earnings and tax-free withdrawals – that can add up and give employees more buying power for their health care needs.

What makes an HSA stand apart from other health accounts is that there is no “use it or lose it rule”,³ and any unspent dollars remain in the account year after year. This gives employees the opportunity to build their balance over time and create a health care nest egg. Having access to these funds can help reduce employees’ stress as unexpected medical expenses arise and can also help employees feel better prepared in the face of rising health care costs.

An often-overlooked feature of an HSA is the ability for account holders to invest a portion of their balance in mutual funds for tax-free growth. A surprising number of employees, as well as employers, don’t realize that their HSA dollars could be working harder for their future by taking advantage of the HSA’s investment feature.^1,5 More education may be needed to increase understanding of HSA investing, so these accounts can be used to their full potential as part of a long-term savings strategy.

Corporate wellness programs can encourage and reward health behaviors. They can include a range of initiatives and benefits, from a workplace fitness challenge to a Lifestyle Spending Account (LSA) – which is an employer-funded account that employees can use to help pay for a designated list of wellness expenses. Such efforts can provide a return on investment for employers, such as higher morale, lower absenteeism, increased engagement and productivity, and improved recruitment and retention.

To support employees in taking charge of their health, employers need to be aware of the opportunities available to them. While the majority of employers feel responsible for employees’ understanding of health care options and costs, most employers communicate this information only once or twice a year.¹ Empowering employees with access to yearlong educational programs and resources can help them become better health care consumers – keeping your company’s health care costs in check and assisting employees in navigating their own health care needs and budgets.