Healthcare becomes more and more expensive each year — by now, employers expect it. But 2024 will far exceed usual expectations, and employees may have to pay the price more than ever before.
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"You've got employees who are already facing other financial challenges, so it really does have an impact on their ability to make ends meet," she says. "It creates additional stress, and impacts wellness and burnout."
Hawthorne underlines that most employees are not in the financial position to absorb added healthcare costs. According to Aflac's report, 50% of employees could not pay more than $1,000 for an unexpected medical event, and 27% could not lose more than $500. Nearly a third of respondents had to choose between obtaining treatment or medication and paying bills in the past year. These numbers will likely only get worse in 2024.
However, employers find themselves at odds with this employee sentiment: 78% believe their employees are highly satisfied with their benefits, while only 59% of employees feel the same. On top of that, 79% of employers think their employees understand healthcare costs well, but less than half of employees would agree. For Hawthorne, it's obvious there's work for employers to do.
"Most employers want to offer a very robust package of benefits for their employees," says Hawthorne. "But they need to educate their employees on the array of benefits that they're offering, as well as the best ways to leverage those benefits and maximize them."
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Hawthorne stresses that it's especially important for employees to have a deep understanding of their benefits with increased costs on the horizon. For example, an employee should know if preventative care like screenings and primary care visits comes with zero or low co-pays, instead of assuming they need to meet their deductible first to see cost-sharing from their insurer.
While Hawthorne encourages employers to take a more in-person, hands-on approach to benefits education, benefit management apps may make the services more accessible on the go, though 64% of organizations offer online benefits management, down from 79% in 2021. Even so, there's room for improvement, as Hawthorne says she has yet to see a platform or app that consolidates benefits in a user-friendly way.
Still, it may be worth it for employers to look for solutions, whether that means benefits navigation help or offering non-traditional benefits. Hawthorne points to supplemental insurance, plans focused on accidents, critical illness, hospital stays and cancer which serve to minimize financial damage that health plans fail to mitigate. Eighty-seven percent of employees enrolled in supplemental insurance say they would recommend these benefits to family and friends. And yet, only 39% of employers say they offer it.
"Supplemental insurance is becoming a core part of what companies can do to help employees manage those expenses," she says. "But you still have to educate employees and make it so they can rationalize why they have selected a [benefit]."
But supplemental insurance still comes with premiums, so employees should know what they are paying for, and what plan best serves their needs.
Ultimately, benefits remain a vital attraction and retention tool, and employers have to treat them as such, emphasizes Hawthorne. Aflac found that 53% of employees say they would be somewhat likely to accept a position with lower pay but better benefits. Hawthorne advises employers to start with small steps to ensure their employees are truly maximizing what their benefits have to offer.
"Focus on educating employees. Focus on preventative management and wellness efforts," she says. "Get back to basics, like stay home when you're sick or your kids are sick, see a doctor, get that screening or flu shot. You'll see an uptick in employees taking advantage of their [benefits]."
