Considering consumer driven healthcare
With all the talk and uncertainty surrounding the impact that the Patient Protection and Affordable Care Act (PPACA) will have on both businesses and individuals, we are all wondering how we will be affected and what we can do to protect ourselves.
Over the last few years, we have seen a steady decline in benefits offered, (such as dental, vision etc.), healthcare premiums increasing, deductibles and co-pays rising, along with other restrictions in healthcare plans making it more difficult to adequately cover our unique situations and need for healthcare.
Some companies and individuals have responded by taking more ownership of this whole process. The buzzword is “consumer driven healthcare.” They have done so by offering voluntary benefits. A survey done by a leading provider of healthcare benefits indicates the following:
- 90 percent of employers say strong benefits packages influence job satisfaction.
- 61 percent of employees say they’d likely accept an employment offer at lower compensation but a more robust benefit package.
- 55 percent of workers who are enrolled in voluntary benefits are extremely/well satisfied with their overall benefits packages, compared to 41 percent of workers who aren’t offered voluntary benefits at all.
Given the fact that no healthcare plan will pay for everything (consider ‘living costs’ incurred while sick), voluntary benefits provide income directly to the participant to meet those needs. For those of us who have seen the devastating financial and emotional impact that catastrophic illness can have on our friends and family, we may view the kind of voluntary benefits we choose as differing from those chosen by young professionals or early stage families. Wouldn’t it be nice for us to all have choices where we could voluntarily pay for what we need ‘over and above’ a base level of healthcare coverage?
Clearly some people have clued-in as the growth in voluntary benefits has been estimated to be as much as 50 percent compounded over the last few years So why doesn’t everyone have access to voluntary benefits to cover their needs beyond whatever may or may not be covered by health care insurance? It comes down to education. Companies must understand that “consumer driven health care” means letting the employees choose ‘what’ they need by providing them the opportunity to access those benefits at group rates (the employees pay), which may also be tax-advantaged. It means educating the employees as to what is available and how their needs can be met.
As the CFO of a private school once said to me, “Why wouldn’t we offer voluntary benefits to our staff? It doesn’t cost us anything. We give people access to benefits they would not otherwise have access to, at tax- advantaged group rates, and the school gets a tax credit to the extent employees participate. If our staff participates, that’s great. If not, at least we offer options, and we all want options when it comes to protecting our health and that of our families!”
Given the uncertainty of what is, and will be going on the next few years regarding healthcare, you owe it to yourself and your company to be briefed on how voluntary benefits may fit in.
Gregory P. Tarris is a special project coordinator for Aflac.