Sometimes, fewer choices are better. Coffee or tea. Medium or well-done. Local or express.
But high-deductible, low-copay or no out-of-network coverage and better dental, or an HSA but without coverage over a limit of…?
Let’s face it—health insurance is not one of those choices. So why are so many of us stuck with just a handful of plans that don’t address our needs and somehow cost more money every year?
Instead of making the choice easier by limiting health care plan options, many companies are providing their employees with high costs and piecemeal coverage.
Higher Costs Than Ever
With the everyday cost of living rising, most Americans want to save where they can. Unfortunately, health insurance costs are rising at the same pace and, in many cases, outpacing inflation. For this year, some estimates show individuals contributing $6,575 on average for insurance premiums, $500 more than in 2022. For families, that stretches up to $23,968 on average.
As workers continue to catch up on essential healthcare that may have been delayed due to COVID-19 and demand surges for weight-loss drugs like Wegovy, costs can continue to rise for the foreseeable future.
Feeling the Squeeze
With rising costs and demand, employers need help finding savings for their employees. Many HR professionals we surveyed for our annual State of Employee Health Benefits report expressed fear and disappointment at passing costs on to employees when insurance rate hikes were higher than expected. Of the companies we talked with, over 50% experienced rate hikes between 5% and 15% the year prior.
On the other side, workers are also reporting dissatisfaction, with 59% saying they would leave their current company for one with better benefits, even if all other factors remained equal.
A whopping 42% of employees reported they would rather get better health benefits than a raise this year.
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Searching for Savings
One of the most obvious reasons for these pain points is the lack of options for both companies and their employees. Over 90% of employers surveyed in our annual report only offer 1-3 insurance plans for their employees, giving them very little leverage when faced with unexpected rate hikes.
In response, many companies are looking at alternative health plans to offer employees. Only 30% of employers are offering traditionally funded, fully insured plans. The rest are looking for ways to save and deliver more compelling benefits through a mix of self- or level-funding and other alternatives like HSAs.
Better yet, 13% have begun using individual coverage health reimbursement arrangements (ICHRAs), which allow companies to reimburse premiums for individual health insurance plans that employees choose.
The Power of Choice
Traditional insurance plans have been built around the idea that simple choices are more manageable for employees. However, when presented with an ICHRA option, the numbers show the opposite.
In our surveys, 80% of respondents said they would rather choose their plan than choose from the few options presented by their employers. Again, despite the misconception that health insurance is already too complicated for most people, 74% of employees said they feel confident selecting their own plan.
When companies offer an ICHRA plan marketplace with SureCo, employees choose an average of 32 plans, with some enrolling in upwards of 100.
A Better Solution
With employers and their employees unhappy with rising costs and one-size-fits-all coverage, now is the time to completely rethink how you offer insurance.
With an ICHRA solution, the average company saves $900,000 annually on health insurance premiums, and 88% of employees indicated they were satisfied with their coverage. That’s the power of giving employees the choice of finding a plan that works for them.
A better way is possible, and SureCo can help. Talk to one of our benefits experts to take the first steps to more affordable care.
