Health Care Benefit Trends for 2021
is expected to continue next year.
Here are some of the cost and benefit trends we can expect to take center stage this year.
Health care premiums are expected to rise at higher rates than in recent years. Business Source Group on Health predicts that large employers will see premium increases ranging from 5.3 percent to 6.1 precent. Small employers may see increases as high as 20 percent.
Here are a few ways employers can counteract the increases:
- The new individual coverage Health Reimbursement Arrangement (HRA) was established January 1, 2020, and allows businesses the option to offer full-time, part-time and seasonal employees a monthly allowance of tax-free money to buy health insurance that fits their unique needs.
- Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) are expected to be more popular because of the CARES Act, a coronavirus-targeted legislation passed in March 2020. The changes expand the use of these accounts by:
- Protecting reimbursements for COVID-19 testing and treatment and telemedicine appointments – even before plan deductibles are met.
- Extending election and payment periods for COBRA participants.
- Making feminine hygiene products and over-the-counter drugs eligible for HSA and FSA reimbursement.
No Copays or Deductibles
- Zero copays and zero deductibles are not the norm, but they are gaining favor. High-deductible plans were previously seen as way to get employees to use their health care dollars more wisely. In theory, employees would have “skin in the game” and by realizing health care benefits aren’t free, keep costs lower. That was not the outcome, however. As costs have continued to rise, so have deductibles associated with employer-sponsored health benefits, which now average more than $1,600 — more than most employees have saved. A radically different approach does away with most deductibles and copays.
- With a defined-contribution model, the employer sets aside a fixed amount of health benefits dollars for each employee. Employees are offered a variety of health plan options and can choose the one that fits their needs and budgets. With this model, employer budgets for benefits are predictable because they don’t depend on the employees’ enrollment choices or their health spending.
- Employers who are struggling financially may need to increase employees’ premiums and cost sharing. It’s helpful to pair these skinny plans with a health savings account and/or flexible spending account.
To help employees get the most out of their health plans, new or increased benefits are being added. Here are two of the more popular benefits:
- Telemedicine is the use of smartphones, tablets or computers to visit with a doctor or health specialist and get a diagnosis and prescription. Experts expect that even after the pandemic is over, telemedicine will still be popular because of its convenience and lower costs. Some health plans charge members nothing for a telemedicine visit.
- The global pandemic has severely tested everyone’s mental health. A recent Centers for Disease Control and Prevention study showed that the national rate of anxiety in the United States tripled in the second quarter compared to the same period in 2019. During the same time depression almost quadrupled. Health plans are adding increased mental health support — both in person and via telemedicine. Other programs that help ease stress include flexible work arrangements, mental wellness programs and access to health savings accounts and/or flexible spending accounts.