Companies and their human resources teams are now prepared for updates and changes to their benefits offerings since the new year began. Consumer-driven health plans, which help businesses shift more of the financial responsibility of health insurance to the employee, have already proven to be popular in 2016. Let's take a closer look at this option and what it means for HR:
What are CDHPs?
As medical and pharmacy costs continue to rise, more companies are offering workers consumer-driven health plans. CDHPs enable consumers to control their own coverage, allowing employees to compare the prices and services of providers before making their final decision, according to the National Center for Policy Analysis. Businesses, on the other hand, shift workers to plans with higher deductibles and offer health savings accounts or health reimbursement arrangements. These additional options give workers funds to cover their out-of-pocket expenses. Furthermore, employees can keep any money that goes unspent.
Why are CDHPs gaining popularity?
Companies frequently look for ways to lower their healthcare costs while still providing adequate and government-compliant coverage to employees. CDHPs give employers the opportunity to cut healthcare costs per employee while giving workers a chance to decide on their own plan.
"Workers with $50,000 salaries can cost employers up to $70,000 including benefits expenses."
This move is becoming more common among companies, as the cost of a worker's $50,000 salary plus benefits can total between $62,000 to $70,000 per year, according to MIT.
Next steps for HR
Companies implementing CDHPs must ensure employees are given as much information as possible. These arrangements are most successful when workers are given data related to their benefits, as well as the the variety of cost-effective healthcare options available to them.
Furthermore, HR representatives should make sure their health insurance is still meeting the requirements of the Affordable Care Act. Since CDHPs shift costs to employees, companies need to calculate the affordability of these implemented arrangements. If a worker's contribution exceeds 9.5 percent of his or her household income, the employer may be subject to unaffordability penalties, according to the IRS.
Consumer-directed health plans aren't the only trend in 2016. More transparent cost and care-quality metrics, telemedicine, financial wellness benefits, self-funding and level-funding programs are also gaining in popularity among employers. HR teams should stay up-to-date with upcoming healthcare trends to ensure workers are receiving the best, most cost-effective coverage possible as the months go on.
Triton Benefits can provide a complimentary benefits analysis for companies large and small to see what programs fit best with their corporate culture, budget and business needs.