According to Kaiser Family Foundation, the average premium for family health plan coverage increased by 47% between 2011 and 2021. In response, employers have increasingly turned to High Deductible Health Plans (HDHPs) to lower premiums and shift more financial responsibility to covered employees.
While employees appreciate lower premium costs, the higher deductibles can lead to higher out-of-pocket costs in the long run. The higher financial responsibility may increase employee utilization of cost-saving measures like wellness programs. With wellness support for healthy behaviors, participants can experience improved health outcomes and reduced costs in the long run.
What Is a High Deductible Healthcare Plan?
An HDHP is a health insurance plan that charges lower premiums in exchange for higher deductibles. Faced with a larger deductible, employees may be more likely to research services and providers, compare costs, and become more educated healthcare consumers.
HDHP enrollment also qualifies employees to participate in Health Savings Accounts (HSAs). HSAs help control healthcare costs through triple tax savings on funds set aside to pay for eligible healthcare services and products. HSAs are a great pairing with many benefits, including wellness programs.
Wellness programs help employees improve their health and fitness by making better lifestyle choices. These programs typically include preventive health screenings, encouragement of regular exercise, assistance with weight loss, smoking cessation, and stress management.
Employers may offer cash rewards, paid gym memberships, discounts on fitness products and services, and other incentives to motivate employees and encourage wellness program usage. An increasingly popular method of providing wellness and well-being incentives is through a Lifestyle Spending Account (LSA).
Wellness Benefits for Employers
- Lower insurance costs and utilization
- Reduced absenteeism
- Increased productivity
- Happier, more motivated employees
Wellness Benefits for Employees
- Improved overall health
- Reduced healthcare expenses
- Improved stress management
- Interaction with co-workers away from the office
Pairing HDHPs and Wellness Programs
More than 70% of employees surveyed by EBRI/Greenwald & Associates in 2021 said employers should be responsible for ensuring their employees are mentally and physically healthy. Nearly 75% strongly or somewhat trusted their employer to provide health benefits to improve their overall well-being. Yet, as healthcare costs continue to rise, employers find it more challenging to deliver these benefits without passing on a significant cost share to employees.
Employees facing higher deductibles often look to their employer for ways to reduce or offset the increased financial burden. By pairing an HDHP with an HSA and a wellness program, employers can reduce their overall costs of providing employee healthcare while providing the additional financial and well-being support employees need.
DataPath, Inc. creates innovative solutions for tax-advantaged, post-tax, well-being, and compliance benefits administration, including FSAs, HRAs, HSAs, LSAs, COBRA, and more. Please enter your email (above right) to be notified when new blog articles are published.