How Can Employers Support Employee Healthcare Payments?
Around the world there are different methods in financing personal healthcare, and paying for healthcare in the US can often be a complicated task.
Payments are funnelled between patients, employers, private insurers, government-sponsored programs, and providers. But whether they support provider reimbursement or patient coverage, these funds rarely follow a direct path.
As a result, the system's complexity raises costs across the board and hurts everyone involved. In fact, a recent Gallup poll shows a record-high 38 percent of Americans deferred care in the prior year due to cost concerns. With the number of patients presenting higher-acuity conditions (that are more expensive to treat) increasing in recent years, these financial and human costs seem only to worsen.
The right mindset, however, can help us tackle these issues and address care costs head-on. Chris Labrecque is Chief Customer Officer of Paytient, a company which helps people access and afford care. With 30 years of industry experience, he has previously served as President of the Employee Benefits Group at the Insurance Office of America.
Passionate about human resources and employee support, he shares trends impacting how patients pay for healthcare.
Transparency is essential when financing healthcare in the US
“The Hospital Price Transparency rule requires US hospitals to publish machine-readable, consumer-friendly formats of prices for more than 300 services. Originally published in 2021, compliance has taken time. But with enforcement increasing throughout 2023, pricing will become increasingly available to patients to help support care decisions,” he says.
“As more providers and payers come into compliance with transparency rules (of note: group health plans have recently begun publishing prices en masse), it will be easier for patients to estimate their healthcare costs and feel more financially secure in their care decisions.
“But knowing the price may result in patients choosing to opt out of care when they see prices they can’t afford. We need solutions that make it possible for patients to pay for care today (and whenever else they need it).”
Support in choosing plans and benefits
“The cost of employer health insurance has been steadily increasing for years. But when employers help their employees choose the right benefits package, it can help save a lot. Decision support software like ALEX and Plansource help power these decisions and can assist large employers and their teams.
“Still, decision support isn’t a silver bullet. Prices continue to climb, so flexible employers are looking toward additional strategies like benefits unbundling. Brokers help employers customise their employees' benefits plans through unbundling benefits rather than relying on a payer’s off-the-shelf package. It’s a lengthy, labor-intensive, and cost-saving process. So brokers and employers may often find the positives outweigh the negatives, while providers, on the other hand, are more resistant to the practice. But as price transparency becomes an increasingly regulated part of the insurance landscape, benefits unbundling stands to become an increasingly popular strategy.
“Even as unbundling lowers costs, it likely won’t eliminate the patient’s contribution to premiums or their out-of-pocket responsibility. Again, patients need support paying for those benefits.”
Payment flexibility reduces payment anxiety
“Tax-deferred savings accounts go a long way towards helping employees set aside money for health-related expenses. Coupled with an employer contribution to ensure employees have dollars available on day one of their health plan, HSAs and FSAs can make it far easier for employees to pay for care. Unfortunately, these accounts are only as useful as the amount of money employees have proactively elected to save and already funnelled to the account. Once that money is spent, it’s gone until new deposits are made, limiting the usefulness of HSAs and FSAs when a health issue costs more than available balances.
“And this assumes that employees have room in their budget to contribute to these savings vehicles. In fact, with 58 percent of Americans living paycheck to paycheck, it’s possible HSAs and FSAs provide little relief to those who need the most help.
“Another alternative that’s gaining momentum is the health payment account (HPA). HPAs offer employees a small line of interest-free credit they can use to pay for care expenses, repaying those balances in instalments that work for their budget. As an employer-, or payer-sponsored benefit, they’re a unique solution that directly removes the financial barriers to care, providing much needed liquidity that protects patients from interest-bearing debt. They work alongside HSAs, as patients can repay with pre-tax HSA dollars or choose to let their savings grow. And their low credit limits protect employees from long term debt.
“Depending on the employer’s health plan strategy, one or more of these types of accounts can help remove financial barriers to care so that more employees can access the care they need when they need it.
Increase Healthcare Access to Decrease Employee Attrition
“In order to keep employees healthy and productive at work, it’s crucial to help those who are deferring needed mental health and / or medical care. Importantly, the same solutions that improve access to care and reduce financial stress also help boost employee retention and productivity,” he believes.
“When employers help their employees to maintain good health by offering financial wellness benefits like health payment accounts, they boost the likelihood that those employees will value their workplace and want to stick around. And healthier employees have fewer absences and are more likely to reach their goals. The result? Healthier employees and a more productive workforce.”
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