Highlights  

• A recent employee healthcare benefits survey shows an alarming rise in the cost of health insurance for employers and employees.

• High deductibles and copays reduce employee access to healthcare, resulting in worsening health and well-being.

• Lowering cost sharing can increase employees’ access to appropriate care and lower healthcare expenses overall.

• Self-funded group captive insurance gives you the freedom to design your plan with lower deductibles and copays to reduce costs and provide better access to care.

Employers and employees face ever-rising costs of employee healthcare benefits. High deductibles and copays may lower upfront costs but often result in reduced access to quality healthcare and increased expenses for employers and their employees down the line.

Self-funded group captive insurance gives you the freedom to design an employee benefits package that lowers cost sharing while improving access to quality care.

Employee Healthcare Benefits Survey Results

The 2021 Kaiser Family Foundation (KFF) Employer Health Benefits Survey provides insights into the state of health insurance in the U.S. In general, premiums have increased by 4% in the last year and over 47% since 2011. Average single-payer premiums are $7,739 per year, and family coverage costs around $22,221 on average.

Regarding cost-sharing elements of employer healthcare benefits plans, the KFF report includes a study of worker and employer contributions to insurance premiums and cost-sharing factors like copays and deductibles. The survey insights also touch on high-deductible plans that offer Health Savings Accounts (HSAs).

Worker and Employer Contributions

According to section six of the KFF report, employees contribute 17% and 28% to premium costs on single and family plans, respectively. Employees working for small firms, between 3 and 199 workers, pay about $2,441 more for coverage than those in large firms.

These numbers show that employers contribute nearly 83% of premiums for single coverage and 72% for family coverage. Additionally, larger firms with more than 200 employees pay less for health insurance coverage than small to midsize companies.

Employee Cost Sharing

Employee cost sharing refers to the out-of-pocket costs that employees must pay for the healthcare services they receive. Cost sharing usually includes all three of the following:

• Copays. These are fixed fees paid by the insured to a medical provider at the time of service.
• Deductibles. A deductible is an amount that must be paid toward medical services before an employee’s health insurance becomes effective.
• Coinsurance. This is a percentage of costs a covered employee must pay for services after they have met the plan’s deductible for the year.

Section seven of the KFF report offers the following insights into these cost-sharing factors.

Deductibles:

• 85% of covered workers must meet an annual deductible before insurance pays for their healthcare.
• HMO plans have a higher rate of deductible plans than POSs and PPOs.
• The average deductible for single coverage is $1,669.
• Deductibles are around $996 higher for small firms.
• Deductibles have increased over the last five years by 13%.
• Family deductible amounts range from $3,000 to $4,705 (depending on the plan type).

Copays:

• 12% of covered workers have hospital copays for inpatient admissions.
• 71% of covered employees have a copay for physicians’ offices.
• In-network physician office visit copays range from $25 for in-network primary care to $42 for specialty office visits.

Under most plans, employees must pay copays even after reaching their deductible.

How High Cost Sharing Affects Employee Healthcare

A 2017 Health Affairs review found that healthcare plans with high deductibles may offer companies a way to reduce healthcare costs. However, the reason behind this cost reduction is that fewer employees use healthcare benefits with such high-cost burdens.

The review found that many employees cannot afford high deductibles or copays, so they avoid going to the doctor’s office and eventually incur urgent care or emergency room claims instead of receiving the care they need early on.

Specifically, the review mentions that these high cost-sharing plans resulted in a reduction in the use of essential services like preventative care and led to reduced medication adherence.

Why Lowering Cost Sharing Reduces Healthcare Costs

The negative impact of high cost-sharing plans on employee health benefit use has many implications for employers. Employees who can’t afford to receive necessary care due to high deductibles and copays may cost their employers more money.

If your employees don’t use the healthcare benefits you provide, your employees will likely experience worsening health.

This means they’ll miss more work, be less productive while at work, and potentially suffer from more severe health issues, leading to higher catastrophic claims and emergency room visits.

In contrast to insurance plans with cost-sharing features, plans with lower copays and deductibles lead to better health for your workers and long-term financial benefits for your employees and your bottom line.

Greater Use of Benefits

By lowering cost sharing, your employees will use your company’s health benefits. A higher benefits utilization rate can translate to happier, healthier employees who actively manage their health.

Better Chronic Condition Management

With fewer financial barriers to receiving care, your employees can get better chronic care management services. This means fewer high-dollar, catastrophic claims and better overall employee health.

Healthier Workforce

With lower cost sharing, better chronic condition management, and higher benefits utilization, you gain a healthier workforce. A healthy workforce results in fewer absences, improved performance, and a generally positive work environment for everyone.

Productivity Gains

Lower cost-sharing requirements and increased access to healthcare and well-being programs create a more productive workforce.

Well-being programs have shown a productivity increase of one day per month for some employers, according to a 2017 study.

A 2013 study on well-being programs and productivity-related savings found that employees who participated in a well-being program saved around $353 per person each year, which the study equated to about 10.3 hours of additional productive time per year.

Lowering Deductibles and Copays on a Self-Insured Group Captive Plan

A self-insured group captive plan from Roundstone provides you with the freedom to design a group medical captive plan with low cost sharing for your employees. With Roundstone’s self-funded insurance solution, you can write your Summary Plan Description (SPD) and decide on elements like copays and deductibles that suit your business needs, rather than having to fit into a pre-designed box of a traditional, fully insured plan. You can also implement cost containment solutions and leverage data for better insights and control, which can substantially increase the savings to a self-funded health insurance plan.

A recent Roundstone case study shows the benefits of implementing a low cost-sharing, self-insured plan for employers. With a self-funded group captive plan through Roundstone, Totem Solutions designed a zero-deductible benefits plan that saved the company $6,000. It also created a happy working environment, which led to the company’s inclusion on Inc. Magazine’s Best Workplaces 2021.

As a self-insured group captive member, you can design your plan from start to finish and implement cost containment measures when needed. Start with a zero-deductible plan and low or no copays, then add elements such as a well-being program, direct primary care plan, and care management features to improve your employees’ access to healthcare and see year-over-year savings.

Improve Your Employee Healthcare Benefits With Roundstone’s Self-Insurance Solution

With Roundstone’s self-insurance solution, you design your company’s employee health benefits plan your way. You can avoid high deductibles and copays that make it difficult for your members to obtain the care they need. Instead, build a plan that increases employee well-being and helps you consistently lower long-term health insurance costs. The beauty of a self-funded health insurance plan is you can custom-design it to suit the unique needs of your employees.

Speak with a Roundstone representative today to find out how self-funded group captive insurance can save you money and help you maintain a healthier, happier, more productive workforce.