Every year, businesses across all industries try to understand where the market is moving. This year is no exception – and perhaps requires this type of forward thinking more than ever. While 2020 was unpredictable to say the least, we in the health benefits industry have an opportunity to take its challenges and turn them into positives for the coming year. Here's what's top of mind for me entering 2021.
Consumer engagement gap will continue to shrink
Health care expenses are becoming more like retirement, where the responsibility falls on the consumer. The challenge is that 88% of consumers don't know how to best save and spend on their health care, and this hasn't changed much over the past five to 10 years. The premise of health care consumerism is that, if given more financial responsibility, consumers will feel empowered to make better choices that lead to improved health outcomes and decreased costs. However, for this strategy to work, consumers need the right education, tools and technologies.
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With more people working from home and the health care system forced to change how it delivers care due to COVID-19, we've seen providers and benefit administrators invest in tools and technology like never before. We've also seen consumers more focused on their health care and more willing to use technology. We expect employers to take advantage of this willing client base and make a strong push for engagement in the coming year. This includes rethinking how they deliver educational content to improve consumer fluency and taking a more active role in promoting available technology (like smart apps) that guide consumer health care decisions.
Rise in more flexible coverage and ICHRAs
Employer-sponsored insurance is a tradition left over from the World War II days, and the job market has changed significantly since then. People are mobile in their jobs and have unique health care needs. Particularly for start-ups and companies with a younger and more diverse employee base, employer-sponsored coverage can feel like an unnatural fit. The gig economy is also on the rise, which has created further demand for flexible health care benefits. Companies with gig or part-time workers often can't afford to provide full health insurance coverage.
Decoupling jobs from health care coverage can make sense, given the realities of today's workforce, and many consumers agree. A recent survey found that 41% of consumers think health insurance should be decoupled from employment. This practice has benefits for both employers and consumers, so it truly is a win/win.
Another increasingly popular alternative is the individual coverage health reimbursement arrangement (ICHRA). This plan allows employers to designate a set dollar amount for employees at the start of the year that they can use to purchase a health care plan of their choosing in the marketplace, or to pay for out-of-pocket health care costs. ICHRAs save employers money and allow employees to choose a plan that suits their needs. In fact, a recent survey found that 65% of consumers would be very or somewhat interested in their employer offering such a plan.
Overall, I expect ICHRA plans to increase in popularity in 2021 as employers look for ways to save on health care costs during a recession. If we see large corporations – or even one large corporation – shift to this model, interest could skyrocket.
Looking ahead
As we look ahead to the coming year, I feel optimistic when it comes to health care benefits, as long as the industry remains open-minded and adaptable. It's time to shift away from the typical one-size-fits-all approach to health benefits and emphasize personalization. The uncertainty of 2020 has paved the way for new opportunities, and Americans, who have been through a great deal this year, deserve meaningful options in the year ahead.
Brian Colburn is Senior Vice President of Corporate Development & Strategy at Alegeus.
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