Do your benefits provide angst or relief

Tuesday, October 22, 2019
Blog

It’s important to distill the core essence of why benefits are provided to your people. This may sound rhetorical at first, but pause and ask yourself the question “How do our benefits provide emotional and financial relief to employees?”

Health care has become a tough business for many Employers, and for many, they have strayed from this mission out of necessity due to rising costs. Employers should take a close look at yesterday’s why in order to consider tomorrow’s how.

A recent study from The Center for the New Middle Class considered the impact of healthcare by examining the impact of healthcare on “The New Middle Class.” This class is defined as “Non-prime Americans,” or those with a credit score under 700, against those who are “Prime Americans” (those with a credit score over 700).

Let’s walk through some of their findings:

  • 85% of Non-prime Americans had health insurance, compared to 94% of Prime Americans
  • 27% of those in the Non-prime category had lower quality insurance, compared to 17% of Prime members.
  • 45% of Non-prime folks received health insurance from either their Employer or their spouse’s Employer, compared to 62% of Prime individuals.
  • 79% of Non-prime individuals, and 61% of Prime individuals, reported having a financial hardship due to medical expenses.

Pause: Let’s think about this. Most individuals (collectively) are securing healthcare through an Employer sponsored plan, yet at the same time nearly 7 in 10 (collectively) also experienced financial hardships due to medical expenses.

What is perhaps even more disturbing are the lengths that these individuals went to in order to cover these expenses – many resorting to risky or high cost lines of credit, further perpetuating the issue at hand.

Sources of loans borrowing

Source: https://newmiddleclass.org/

At the same time, 401k’s also turned from innocent bystander to victim in this process, through either loans, or reducing their contributions, with nearly 1 in 10 utilizing these funds to cover expenses as well.

Among one of the most cited issues were ER visits, followed by hospital stays, outpatient treatment, and more – which of course are some of the most expensive, but least expected types of care.

What is the takeaway? There are several:

  1. Employers should revisit the core focus of their benefit programs, to ensure that it aligns with your core mission, purpose, goals, and culture.
  2. Benefit programs (as a whole) should be looked at as a financial protection package, and treated as such.
  3. Employees should continue to be educated about the potential perils of healthcare, and how they can stand a better chance through greater financial security/education, even on their own.

The short answer is that it doesn’t have to be this way, and that there are tools, resources, solutions, and strategies that Employers can (and should) embrace to restore the word “benefits” to its truest definition when it comes to your benefits program.

Offering a benefits program is a good idea, but having a comprehensive solution is a Distilled Concept.

No cute ideas, only
distilled concepts.

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