As health insurance costs rise, employees demand more flexibility

Every November, American workers sign up for health insurance for the following year. Each year, this cost continues to rise.

Employer-based health insurance is expected to grow at the fastest rate in 2024 as inflation affects insurance policies. KFF (formerly the Kaiser Family Foundation) estimates annual premiums for a family policy will be nearly $24,000 in 2023, with employees paying an average of $8,475, a 7% increase from the previous year. Over the past five years, average home insurance premiums have increased by 22%, while worker wages have increased by 27% and inflation has increased by 21%.

Among plans with a typical annual deductible, the average deductible for a covered worker with single coverage is $1,735. A KFF survey found that employees at small companies pay an average of $2,445 more for home insurance than employees at larger companies.

The type of health insurance and other benefits offered by the Company may be a deciding factor in whether an applicant accepts a position. Employer benefits can include traditional benefits such as wellness programs, company-paid life insurance, paid time off and paid flex time off, as well as new benefit accounts such as paid parental/adoption leave, flexible work arrangements, on-site fitness centers and flex savings accounts .

This chart shows the percentage of North Dakota companies offering benefits to their employees in 2022.

/ ND Employment Services Provided

According to information provided by North Dakota Employment Services, 71% of companies in the state offer single health insurance to full-time employees in 2022, and 56% offer family health insurance. Fifty-two percent of companies offer dental insurance and 44% offer vision insurance.

Health savings accounts and flexible savings accounts are growing in popularity. By 2022, one in five companies (or 20%) in North Dakota will offer an HSA and 17% will offer an FSA. 71% of employers offer vacation time and 43% offer general/PTO time.

In November, Prairie Business spoke with two leaders of Blue Cross Blue Shield of North Dakota to understand what employer groups and workers are asking for coverage.

Joan McCusker is BCBSND’s Executive Vice President of Operations and Corporate Strategy. She offered her perspective on the employee benefit packages offered by the company.

Kristi Huber, Executive Vice President and Chief Marketing Officer, talks about employee trends and what BCBSND is hearing from employers.

Employees work for compensation, benefits, and satisfaction. We consider satisfaction as part of the benefits we offer. McCusker said this is a very important way for us to make our employees feel valued and supported.

Allowing employees flexibility is a key driver of this satisfaction and has become a priority during the pandemic. At many businesses across the country, employees were sent home to work early on, and employers had to make adjustments to keep employees safe and continue to serve their members or customers.

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Joan McCusker is executive vice president of operations and corporate strategy for Blue Cross Blue Shield of North Dakota (BCBSND).

/Courtesy Jeremy Albright

About one-third of BCBSND employees continue to work remotely, with about one-third working a hybrid of several days a week in the office, a few working from home, and the remaining one-third going to the office every day.

McCusker said that in addition to workday flexibility, employees are also asking for flexibility in benefits, such as moving from a traditional pension plan to a 401(k) plan.

It provides greater flexibility for employees who choose not to stay with the company for as many years as they did before. People also want flexibility in their PTO schedules and vacation schedules. McCusker said we tend to offer some standard holidays, but will also offer three flex holidays.

Another trend gaining traction is giving more respect and attention to mental health. There is less stigma around these issues and more acceptance of the benefits associated with mental or behavioral health.

Huber said employers are looking to lower the cost of health insurance premiums. Healthcare costs are driven by rising prices, use, increasing regulation, increases in chronic disease and obesity, and the proliferation of specialty drugs.

According to the CDC, more than half of U.S. adults (nearly 52%) have chronic arthritis, cancer, chronic obstructive pulmonary disease (COPD), coronary heart disease, asthma, diabetes, hepatitis, high blood pressure, stroke, and kidney disease National Health Interview Survey on Frailty or Failure data. More than 27% of U.S. adults live with multiple chronic conditions. Multiple chronic diseases not only increase the complexity of treatment but also increase the cost of treatment. Less than 5% of the U.S. population pays 50% of health care expenditures.

Engagement is key to managing chronic disease, but people are no longer engaged in care, according to BCBSND’s 2023 Cost of Care Report. Cost management strategies include population health management analyzing data to identify the top three conditions for specific groups (e.g., employer groups) and recommending interventions, programs, and tools to support those members; for patients with serious illness, injury, or disability Case management programs, where nurse case managers help them successfully implement treatment plans at no additional cost; for example, disease-specific programming and prevention utilize digital tools to provide customized, targeted diabetes prevention methods.

The national behavioral and substance use crisis also impacts North Dakota employers. In 2021, one in four North Dakotans reported experiencing behavioral health symptoms in the past year. Telemedicine and online therapy are helping treat those experiencing behavioral health and substance abuse issues.

For example, some employers are adding computer-based therapies that can help individuals suffering from depression, anxiety, and insomnia. McCusker explained that accessing these resources in the privacy and comfort of home, especially in rural areas where in-person visits with professional therapists can be more challenging, is an added benefit that employees appreciate.

Health insurance plans also promote wellness programs in their various employer packages. Preventive care, including guidance on making healthier lifestyle choices, quitting smoking, or losing weight, is becoming the norm. A healthier workforce is expected to translate into lower health care costs for employees and employers.

Paid time off for volunteer work is another new trend offered by employers. Younger employees will often ask for this benefit during the initial interview stage, but if the employer offers it, all employees tend to use it.

McCusker said parental leave is another benefit offered by BCBSND to individuals with a new baby or recently adopted child at home.

One benefit that some large companies offer is student loan matching 401(k) contributions. For example, full-time and part-time employees who qualify for a company 401(k) and contribute 2% of their qualified wages to student loans through payroll deductions will receive an employer match equal to 5% of their wages contributed to the 401(k). k ), or any amount provided by the Company. Plan beneficiaries receive matching funds without making any 401(k) contributions of their own, allowing them to use more of their income to pay off their student loans.

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This chart shows health insurance premium growth over 10 years in North Dakota, South Dakota and Minnesota.

/Courtesy of KFF’s State Health Facts

The size of the company and the industry in which employees work will affect the types of benefits offered and their costs. According to the KFF report, most workers in the United States are employed by larger companies (200 or more workers). By 2023, 98% of large companies offer health benefits and 100% of large companies (1,000 or more employees) offer insurance. Nationwide, 76% of state or local governments offer health benefits to their employees, followed by 71% of manufacturers and 65% of financial companies. Among the smallest employers with 3 to 9 employees, approximately 39% provide health insurance benefits to their employees.

Huber said at BCBSND, employers are seeing higher attendance rates, and employees report feeling healthier after using the wellness program. It changes the way managers talk, encouraging them to lead by example and take advantage of the wellness programs on offer.

Huber said that in order for the employer group to see the success of having a quality insurance product, they need to be given the tools, education on the tools and how to best take advantage of the benefits of the program. At its core is engagement.


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