As more workers enroll in high-deductible health plans, adoption of voluntary benefits to help with out-of-pocket costs is on the rise in all regions of the country, according to Benefitfocus Inc.’s 2017 State of Employee Benefits – Regional Edition.
"Consumer-driven health is taking hold across the country, more quickly in some regions than others, and employees are carefully considering how to spend their health care dollars –- some for the first time,” says Benefitfocus co-founder and chief executive Shawn Jenkins.
“Employers on the Benefitfocus platform realize they need to support their workers as they transition to these plans, educating them on the importance of voluntary benefits and HSAs in covering unexpected health care costs.”
The Midwest is leading the pack in terms of HDHP and voluntary benefit adoption, according to an analysis of election data from more than 500 employers on the Benefitfocus platform. Two-thirds (67 percent) of employers in the Midwest offer HDHPs and nearly half (42 percent) of employees choose these plans -- exceeding the adoption rates in all other regions. The region has also seen more than a fivefold (567 percent) increase in the adoption of voluntary benefits, compared to a 208 percent increase in the South, a 138 percent increase in the West and a 59 percent increase in the Northeast.
In the West, consumer-driven health takes hold as employees move away from health maintenance organizations. Employers increased HDHP offerings by 54 percent, driving employee adoption with a 20 percent decrease in HMO participation. Not only are employees adopting voluntary benefits at a higher rate, but the West also has the highest average employee contribution in country -- $1,457, though the average employee contribution in other regions is only slightly lower -- all above $1,300.
The Northeast has higher premiums than all other regions, but lower deductibles. Employees pay on average $1,164 in premiums in HDHPs, up 7 percent ($3,582 for families, up 11 percent), and $1,710 in PPOs, down 2 percent ($4,777 for families, no change from last year).
However, deductibles are lower, with employees paying $1,978 in HDHPs, down 14 percent ($3,983 for families, down 16 percent from last year); and $745 in PPOs, no change from last year ($1,917 for families, down 5 percent).
Employees in the South face the highest out-of-pocket costs for all plans. Employees face higher PPO and HDHP deductibles than all regions -- PPO deductibles are 11 percent to 15 percent higher ($1,361 individual, $2,886 family); HDHP deductibles are nearly double PPOs ($2,443 individual, $4,855 family)
More employers in the South are embracing HDHPs (54 percent increase) and voluntary benefits (49 percent increase, higher than all other regions).
In its report for large employers, Benefitfocus identified five major themes for the 2017 plan year:
Employees have more choice in health care benefits. High-deductible health plans (HDHPs) now appear in three out of every five large employer benefit offerings, but PPO plans remain the most popular pick for employees.
Health plan participation fluctuates with age and wage. Millennials still prefer HDHPs to traditional health plans, and so do older employees with high incomes.
Employee costs are up significantly, regardless of health plan. Employers continue to shift costs onto employees, with hefty increases to both HDHP premiums and PPO deductibles.
Employees, especially young ones, are saving more. Employee contributions to health savings accounts (HSAs) and flexible spending accounts (FSAs) are up, with millennials dramatically increasing their contributions.
Employers are increasingly embracing voluntary benefits. More employers are offering key voluntary income protection benefits, but, likely due to rising health care premiums, employee participation has fallen slightly.