Priced Out of Coverage: What to Do If Your Employees Can’t Meet Their Deductibles

March 1st, 2021

Employer-sponsored health insurance remains the main source of health insurance in the United States, covering about 153 million working Americans and their families. In fact, it’s often the reason for taking one job over another: 46% of Americans surveyed said they chose their current jobs because of the health insurance offered, and 56% of adults surveyed noted health insurance as a key reason for staying in their current job.

But for many employees, increasing premiums and deductibles are pricing their coverage out of reach, making the most attractive benefit of full-time work much less attractive. Family health insurance premiums have increased at twice the rate of workers’ wages since 2010. Even more staggering, deductibles have increased more than four times the rate of wage increases over the same time period.

Employees find themselves working full-time to qualify for benefits that they can’t afford to use. When faced with out-of-pocket medical expenses, they are forced to choose between the lesser of two evils:

- Using toxic payment methods to pay for their care, such as high-interest credit cards 

- Delaying or postponing their care, which can lead to worse health outcomes and more expensive medical bills down the road

But we offer an HSA...

Many employers offer Health Savings Accounts as a component of their health plan, positioning this offering as a way to save for out-of-pocket healthcare expenses, or ideally, as a triple-tax-advantaged way to save for retirement. 

For those in the financial position to do so, the ideal use of this account would be to not use it to cover out-of-pocket medical expenses, but instead to contribute the maximum amount, invest those funds in the stock market, and watch them grow. However, research by EBRI shows that this is overwhelmingly not how HSAs are being utilized.

- Over 80% of HSA account holders do not contribute the maximum amount possible ($3,600 for those with individual coverage and $7,200 for those with family coverage in 2021).

- Many of those who do contribute to their HSAs, have to withdraw cash before they are able to see it grow: 44% of active HSA accounts ended 2019 with less than $500, a quarter of which ended the year completely depleted. 

And in fact, 40% of people with HSAs withdrew more than they contributed, which may be an indication that many account holders are encountering problems with cash flow. This research points to the fact that many employees try to use their HSAs to cover out-of-pocket medical expenses -- but are still left struggling to make ends meet.

Although offering an HSA can help employees save up for their healthcare expenses over time, it isn’t enough to bridge the gap between employees’ paychecks and their coverage -- especially lower income employees most likely to be at highest risk of not being able to afford their care. 

When Employees Can Afford Their Deductibles, Everyone Wins

As an employer, it’s in your best interest to help employees afford out-of-pocket costs. For starters, high-deductible health plans are the most cost-effective for the employer, and often, the employee (as long as they can meet their deductible). 

If employees can easily afford to meet their deductibles, they are more likely to get the preventive and routine care they need. This drastically reduces the risk of large claims.

Helping employees afford the care they need makes them less likely to be in financial stress, which also benefits the employer:

- Employees enduring financial stress have been shown to take twice as many sick days compared to less-financially stressed employees. 

- Individuals with self-reported high debt stress are more likely to suffer from a wide array of illnesses compared to individuals with low debt stress. 

When employees can get the care they need, they can show up and perform at their best. So the question becomes: What can employers do to help their employees afford out-of-pocket healthcare expenses?

Bridge the Gap with Paytient

Paytient was created to do just this: We bring your employees access to health care by helping them afford the out-of-pocket costs. Structured as a simple subscription, offering Paytient is an effortlessly generous way to enable your employees to get the care they need, without jeopardizing their financial wellness. 

Here’s how it works:

- Each time an employee uses Paytient, we fund the transaction. The doctor’s office, hospital, or pharmacy gets paid in full at that time, and your employee gets the care they need. 

- Then, your employee has the option to choose how to pay over time - either from a linked bank account, payroll deduction, or from their HSA or FSA - and always without fees or interest.

There is a way to help your employees afford the care they need -- it’s called Paytient. Give your employees a better way to pay for their care. Get started today.

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