Four in 10 millennials over the age of 26 will select a high deductible health plan when employers offer one as an option.
That’s among the major takeaways of the data crunch Benefitfocus did on employer health plan data from 2,400 mid-sized employers. Benefitfocus offers a cloud-based benefits management platform to employers, and used data from employers on its platform. The data from more than 500,000 plan members was evaluated for “Benefitfocus State of Employee Benefits 2016 – Midsize Employer Edition.”
Overall, most employees still selected a more traditional benefits plan, the research showed. PPOs were the plan of choice for 87 percent, while just 13 percent of employers in the study offered a HDHP. But when one was included, 34 percent of employees selected it—and 40 percent of those maturing millennials.
These mid-sized employers have adapted to the so-called Cadillac tax on “rich” health plans, the study indicated, as not a single plan reaching more than 60 percent of the penalty thresholds, on average.
When analyzed to include the increasing out-of-pocket expenses and larger co-pays that plan members must shoulder these days, the study suggested that a family may spend almost 40 percent more on health care insurance than on food in 2016.
“To close this gap, many employers are funding health savings accounts (HSAs) and flexible spending accounts (FSAs),” Benefitfocus said. “Yet adoption is low at both large and mid-size companies, as eligible employees contributed on average less than half the maximum amount allowed.”
The answer going forward may well be for more employers to promote HDHPs, especially if millennials—now the largest generation at work—prefer them.
“The report shows HDHPs are being well received, signaling a desire from employees to select plans that fit their lifestyles,” said Shawn Jenkins, Benefitfocus CEO. “To attract and retain talent, we'll undoubtedly see employers drive more choice and innovation in the type of benefits they're offering, and the process for plan selection. As this shift toward consumer-driven health plans continues, in what's been a relatively unchanged process for decades, employers must make decision support, education and financial wellness a top priority to help in the transition.”