- Posted on February 23, 2017
- by Admin
Fewer employees opted to register for high-deductible health plans (HDHPs) in the 2017 enrollment cycle. The most likely culprit is an increase in cost for HDHPs, which many employers are transferring to employees. Many HDHPs offer substantial savings for employers but come with deductibles that soar beyond $5000.
More Employers Offer HDHPs; Fewer Employees Take Them up on It
The 2017 benefit year saw a 12% increase in family premium costs for HDHPs. While 56% of surveyed employers offer HDHPs, up from 52% last year, only 36% of individuals signed up for an HDHP. This is a five percent decrease from the previous year. The driving force behind this decrease is families in search of affordable benefits.
The basic set up of an HDHP is a low premium with a high deductible. This type of health plan appeals to entry-level, young, single adults without children who are in good health. This is because they often cannot afford more traditional HMOs or PPOs and have fewer health care needs than their more senior coworkers who have families.
The recent increase in HDHP premiums removed some of the cost-savings appeal. Deductibles are increasing for PPOs as well. As a result, many employees do not see a significant difference between the two. The out-of-pocket cost differential is rapidly shrinking and employers are struggling to keep up with their employees’ need.
Insurance to Fill in the Gaps
This quandary poses a significant opportunity to benefit brokers. Agents can present GAP insurance solutions as a way for employers to make HDHPs affordable for their employees while keeping costs down for themselves. GAP insurance, as the name implies, fills in the gaps of HDHPs and can help employees pay exorbitant deductibles.
However, benefit brokers will have their work cut out for them. Many employees do not understand the benefits their employer offers. Brokers will have to use effective communication methods to show the true value of GAP insurance plans. To learn more about selling GAP insurance, contact Chelten Benefits.