Today’s workplace is evolving quickly as are employee salary and benefit expectations. Employers should take note and consider what these changes mean in practice, today and for the coming year. We’re looking ahead to 2020 and making five predictions for small business employee health insurance that could impact employers in a big way.
Increased Demand for More Options
Changing demographics make it more challenging for employers to find a single health plan that’s right for all employees. The workforce is more generationally diverse than ever before. It’s not uncommon to find four generations working side by side: Baby Boomers, Generation X, Millennials, and Generation Z.
With greater diversity comes a variety of health care needs. Your young, unmarried employees starting their professional careers are likely to want something different than their older co-workers who may be married, parents, or even empty nesters.
As an employer, offering options can help you attract and retain employees in an increasingly competitive environment. More and more, employees expect to have a greater say in their health care and other benefits. With a multi-carrier health care exchange, you can easily address diverse employee needs. That’s because an exchange delivers access to multiple health plans – and plan designs – giving your employees the freedom to choose what’s right for them.
Increased EPO Membership
Among the many options available through a private exchange is an Exclusive Provider Organization (EPO), which combines some of the benefits of a Health Maintenance Organization (HMO) with other benefits of a Preferred Provider Organization (PPO).
An EPO gives your employees access to a select network of doctors, hospitals, and other health care providers like an HMO. If employees stay in-network, they typically have lower or no out-of-pocket costs; however, if they go out of network, the EPO offers limited benefits and employees pay higher out-of-pocket costs.
A big advantage for EPOs is that, as with a PPO, members don’t need a referral from a Primary Care Physician to visit a specialist, as long as the specialist is part of the EPO network.
Where five years ago, only seven percent of employers offered an EPO, today nearly twice as many (13%) offer EPO coverage, according to the 2019 Employer Benefits Survey by the Kaiser Family Foundation. Expect that number to keep climbing in 2020.
More Value-Added Benefits Offerings
More is the theme of 2020. We predict employees will expect access to more wellness products and services like gym memberships. We’re already seeing the effects of employee expectations in this area. The state’s private exchange and many health insurers offer value-added benefits like fitness discounts. Health Net, Western Health Advantage, and CaliforniaChoice all have affiliations with the Active&Fit Direct program that includes membership discounts at more than 10,000 fitness centers nationwide.
CaliforniaChoice anticipated the increased demand for additional benefits by launching its Member Value Suite for its members. In addition to Active&Fit Direct, the Member Value Suite offers entertainment discounts through the Cal Perks® program, reduced fees on dental services at participating Dentegra® dentists, discounts on vision exams, frames, and lenses through the EyeMed® Vision One Eyecare program, discounted hearing services, and more.
When you’re considering a benefits program, be sure you look at the big picture and compare any added benefits that carriers and exchanges provide.
Modernization of Health Insurance Technology
Most health plans offer provider network search tools on their websites to simplify the search for in-network doctors, specialists, and hospitals. Some plans and administrators will take it a step further in 2020. For example, in addition to offering online provider searches and prescription drug searches, CaliforniaChoice’s Automated Choice Profiler allows prospective and current members to search for coverage that best matches their specific health care needs — or projected needs — from the dozens of plan options available through the private exchange.
We’re also projecting a push for greater cybersecurity. With data breaches and system hacks dominating the headlines, you can expect insurance and related companies to invest heavily in protecting member information. Make sure your health insurance provider is cybersecurity certificated through a reputable organization like HITRUST.
Greater Employer Cost Control
Fortunately, double-digit annual premium increases on group health coverage are no longer the trend in California. However, controlling health care costs remains a focus, particularly for small businesses. Defined Contribution is one solution. Defined Contribution allows you to set the amount you want to contribute toward the premium for your employees’ health benefits. It gives you more flexibility than what you may find with a carrier-direct program.
There could also be an increased focus on Section 125 Premium Only Plans (POP) as an additional cost-saving measure. A POP plan allows employees to pay for their premiums with pre-tax income. The benefit of a POP is two-fold. First, it results in a lower tax bill on employees by reducing their taxable income. For employers, it lowers the cost of payroll taxes and Workers’ Compensation.
Plan Now for 2020
An employee benefits agent can help you prepare for the changes coming in 2020 – and share other predictions and updates on trends affecting employee benefits. If you do not already have an agent, it’s easy to search for one here.
