Employers are preparing to reduce benefits even further.
A new survey of business executives finds nearly 90% assert that the cost of providing health care coverage will be “unsustainable” in the next five to 10 years. And, no surprise here, they’re contemplating raising the amounts employees have to kick in to remain covered.
The Kaiser Family Foundation, a nonprofit, independent research organization, teamed with the Purchaser Business Group on Health to survey 300 execs at big businesses (at least 5,000 employees).
Nearly half the executives in the survey said they were “considerably” or “highly” likely to shift a larger percentage of health care costs to employees.
As a way to contain their costs, employers increasingly offer high-deductible health plans (HDHPs). Because the employee takes on the financial responsibility of a higher deductible, the premium cost for employee and employer is lower. Nearly one in three workers is now enrolled in an HDHP.
One in five singles with an HDHP had a $3,000 deductible in 2020. For families with an “aggregate” deductible for all members, 56% had a deductible of at least $4,000.
A way to counteract the higher deductible is for employees to set aside money in a health savings account (HSA) that offers valuable tax breaks. You need to be enrolled in a qualified HDHP to be able to have an HSA.
You’re on your own
In 2020, less than half of plans that offered an HDHP with an HSA made an employer contribution. And among those that did, the average contribution (around $740 for single coverage and $1,400 for family coverage) still leaves enrollees on the hook for what can be quite high deductibles.
Size up your annual maximum out of pocket
For all the attention on the upfront known cost of premiums and deductibles, what too often is overlooked is what your household faces if someone actually gets sick or injured.
If you stay in-network, your plan will likely have set an annual out-of-pocket (OOP) maximum. The annual out-of-pocket is the maximum amount of money (excluding premiums) you are expected to pay.
Just one in 10 single enrollee in a workplace health care plan had a maximum annual OOP below $2,000 last year. Nearly one in five had a maximum of $6,000 or more. Family maximums run higher.
To the extent possible, you want to work toward having enough money set aside in emergency savings (or an HSA if you are enrolled in a HDHP) to be able to handle a year (or two) where you hit the limit. One in three people who have an unpaid credit card balance (running up high interest charges) say it’s because of medical bills.
If you are in line to receive monthly child tax credit payments starting in July, perhaps a portion can go toward boosting your emergency savings. Or take a serious spin through your spending to see if there are places you can trim to free up more money for savings.