Healthcare premiums are on the rise again, with California healthcare planning to increase by approximately 5 percent in 2019, according to a recent survey by Kaiser Family Foundation. In 2018, employers and workers together have spent, on average, close to $20,000 for a single family health insurance plan, according to the same survey. Employers and individuals are not likely to get a break any time soon, with national health care spending projected to grow an average of 5.5% every year through 2026.
Significant changes at the federal level have heavily influenced the health insurance markets, which is, in part, some of the reason for the continued rate hikes. The Trump administration has brought about a number of changes in the healthcare realm, including:
- Less funding for consumer-assistance. The Centers for Medicare and Medicaid Services (CMS), which also oversees the ACA health insurance exchanges, announced that it was slashing funding to nonprofit organizations that help consumers shop for insurance coverage. These organizations provide services that help consumers navigate coverage options in the states that utilize the federal Healthcare.gov online marketplaces. Funding for these organizations is set at $10 million for the 2019 plan year, down from the $37 million in funds offered in 2018 and $63 million in 2017.
- Less support for insurers, too. CMS has also announced that they will be suspending, at least temporarily, their risk adjustment program for insurers. This $10 billion program helps encourage insurers to sell insurance in the individual markets, both on and off ACA exchanges and offsets the risk of offering insurance to a wide group of people by collecting money from insurers who participate in the ACA exchanges who had healthier customers and redistributing the funding to insurers with sicker, more expensive customers.
- Allowance of cheaper and less comprehensive options. Two of the Trump administration’s health plan expansions have been introduced as economical alternatives to Obamacare plans, but insurers are concerned about their stability. The two major changes both offer lower premiums, but with less benefits, making them an ideal investment for healthier individuals who don’t feel the need for comprehensive coverage. These plans are significantly cheaper than ACA-compliant insurance because they exclude many basic benefits, such as prescription drug or maternity coverage, and allow insurers to deny coverage to people with pre-existing health issues. CMS is encouraging navigators to promote these types of plans to consumers.
As we approach the beginning of open enrollment for 2019, the pressure has fallen on employers to find solutions to curb ever-growing healthcare expenses and avoid passing those rate hikes onto employees. The challenge is especially relevant to smaller employers, who don’t have the influence or capacity to negotiate directly with healthcare providers to curb costs while still providing comprehensive coverage to employees. Below are a few ways that employers can help mitigate health insurance rate increases.
Employee Wellbeing Initiatives.
Keeping employees healthy is one way employers can reduce healthcare-related expenses. Unhealthy lifestyle behaviors are responsible for most chronic diseases, which cause approximately 70 percent of all deaths and account for up to 75 percent of all healthcare costs. Employee wellbeing initiatives can incentivize healthy lifestyle behaviors and can include preventive measures that address stress-inducing health conditions and reduce healthcare spending for employees, which in turn helps reduce healthcare spending for employers in the long run.
Access to telemedicine.
Some employers offer access to telemedicine apps for their employees as a cheaper alternative to traditional healthcare plans and providers. These apps allow users to consult with licensed physicians, in a faster and less costly manner than visiting a clinic or office in person. Not only does telemedicine offer a cheaper alternative for healthcare, it saves time, allowing employees who utilize it to miss less work and remain productive while managing their wellbeing.
Utilization of PEO services.
PEOs offer employers the ability to outsource their HR obligations and save time and money in many areas of employee management. Another added benefit is that PEOs are able to offer smaller employers access to larger group benefits that they were not able to access on their own. This allows employers to offer comprehensive healthcare coverage to their employees at more reasonable rates than they were previously able to offer.
Emplicity understands that HR
Outsourcing should be simple and meaningful. As a Professional Employer Organization (PEO), we strive to be a great partner in supporting your business. If you would like to request more information on how we can assist your needs, please reach out to us at 877-476-2339. We are located in California – Orange County, Los Angeles, and the greater Sacramento and San Francisco area.
NOTICE: Emplicity provides HR advice and recommendations. Information provided by Emplicity is not intended as a substitute for employment law counsel. At no time will Emplicity have the authority or right to make decisions on behalf of their clients.