People are different, right? As such, they do not all have the same needs when it comes to employee benefits. They don’t even have the same needs in terms of health insurance. So how can companies meet a variety of needs while still giving every worker an affordable option? One way to approach it is to offer multiple health plans.
A recent Goldman Sachs Ayco report on the state of health insurance in 2023 suggests that a large percentage of American corporations are doing just that. These companies are offering multiple health plans from which their employees can choose. The big question is this: which types of plans are being offered most frequently?
Traditional Health Insurance Only
It should be noted that the numbers from the report, cited below, deal only with traditional health insurance products. They do not cover self-funded health plans. Self-funding is a completely different animal that doesn’t technically qualify as insurance. However, it is worth noting that self-funding is gradually becoming a more popular option for businesses wanting a less costly health plan alternative.
Getting back to the Goldman Sachs Ayco report, approximately 400 corporate partners supplied the data for it. The data offers a number of fascinating insights, including the percentage of employers who offer the following types of health plans:
- High Deductible Health Plan (HDHP) – 93%
- Preferred Provider Organizations (PPO) – 79%
- Health Maintenance Organization (HMO) – 28%
- Exclusive Provider Organization (EPO) – 15%
- Point of Service (POS) – 6%.
Although the report does not provide a whole lot of detail about how employers are mixing and matching multiple health plans, common sense would suggest that the most frequent combination would be an HDHP alongside either an HMO or PPO.
HGHPs with Health Savings Accounts
When employers choose to offer HDHPs, including the option to invest in a Health Savings Account (HSA) may be in their best interests. According to BenefitMall, a Dallas-based general agency, HSAs are tax advantaged accounts that help employees manage their out-of-pocket healthcare expenses. An HSA can alleviate some of the burden HDHPs are known for.
BenefitMall also says that insurance brokers should be working with their clients to offer more than one health plan. Multiple plans appeal to the widest possible group of employees who may have different healthcare needs.
As for the pros and cons of each type of health insurance, they had been well documented. For example, one of the main advantages of the EPO is having access to a larger network of providers. Premiums are generally higher compared to HMOs, but many EPO plans don’t require referrals from a primary care physician.
HDHPs are advantageous in the sense that their monthly premiums are lower. The trade-off is a higher deductible. But with an HSA, employees can sock away a certain amount of money to cover out-of-pocket costs. That money is entirely tax-free at every level: deposit, withdrawal within the same plan year, and withdrawal years down the road.
Do It, If You Can
BenefitMall recommends that companies offer multiple health plans if they can. If multiple plans would be cost prohibitive, employers need to choose another strategy. But where it is possible, offering multiple plans is just one one option for approaching the health insurance issue in a way that makes as many employees happy as possible.
Companies unable to offer multiple plans could consider a variety of voluntary benefits that cost little to implement. Voluntary benefits are playing an increasingly important role in putting together benefits packages that win the employee recruiting and retention battle. Health insurance with good voluntary options is a winning combination.
