Employers Considering Alternatives to Rising Health Care Costs

According to a recent report by HR Policy Association and the American Health Policy Institute, Americans are seeking a more cost controlled system and efficient delivery of health care.

The report indicates that HR professionals believe job and economic growth are being hindered and that U.S. employers are at a huge disadvantage globally because of the rising cost of health care. By understanding HR professionals’ views, benefit advisers will have a better chance of closing sales.

Since the inception of the Affordable Care Act, large employers have been forced to closely examine benefit costs, reasons for cost increases, and their role in the future of health care delivery.

There’s no consensus on the future of health benefits. “Some believe that employers may, in fact, continue to absorb increases in the cost of health care and greater regulatory burdens no matter how great they might become. Others, including financial analysts and even some principal architects of the Affordable Care Act, see the collapse of the employment-based system as inevitable,” the report states.

Only 50% of chief HR officers said their company will continue to offer health benefits in the future, regardless of what other large employers do, while 16% disagreed with that statement.

Jeffrey McGuiness, CEO of the HR Policy Association and co-author of the report, says, “Large employers have used self-insured plans to provide health care to their employees and dependents, as well as retirees, for decades and view it as essential to a productive and competitive workforce and as the most valued benefit in compensation packages. However, the cost of health care continues to escalate despite this and is causing large employers to not only question the long-term viability of the current system of employment-based care, but also to begin moving toward alternative health care delivery methods.”

Alternative options include: high-deductible health plans, private insurance exchanges, or not offering health benefits at all, which means employees will have to obtain coverage on public insurance exchanges or go uninsured.

Over 50% of survey respondents said their company offers a consumer-directed health plan (a high-deductible plan with a personal account), or plan to do so. In fact, 23% said they offer a consumer-directed plan as the only option for workers, or plan to do so.

Please read the article by Leah Shepherd here.

ClaimLinx has been consulting and administering partially self-funded plans for over a decade. Our team provides a customized, easy-to-implement solution for controlling the skyrocketing costs associated with healthcare benefits. Please view this short and informative video by Ed Lyon and Tom Quigley that explains our Section 105 strategy. Contact us to find out more.

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