The Importance of Innovative Employee Benefits: Exploring Expense Reimbursed Insurance Plans

As the leaves turn and the air becomes crisp, the season of pumpkin-spice everything and Halloween costumes isn’t the only thing on the horizon—open enrollment is just around the corner. This time of year prompts employers to finalize their benefit offerings for the upcoming year, and it’s crucial to consider innovative solutions that can enhance employee satisfaction and retention. One such solution gaining traction is expense reimbursed insurance plans, which can effectively address the shortcomings of traditional health plans.

The Rise of High Deductible Health Plans (HDHPs)

In recent years, high deductible health plans (HDHPs) have become a popular choice among employers looking to manage rising healthcare costs. Data shows a significant increase in HDHP enrollment, with over half of employees (55.7%) participating in these plans by 2021, compared to just one-third in 2012. The appeal of HDHPs lies in their lower monthly premiums, making them an attractive option for employers. However, while these plans can help control costs, they often lead to increased out-of-pocket expenses for employees, creating financial strain.

The Role of Health Savings Accounts (HSAs)

To mitigate the financial burden associated with HDHPs, many employers have turned to health savings accounts (HSAs). These accounts allow employees to save money tax-free for medical expenses, providing a buffer against high out-of-pocket costs. However, it’s essential to recognize the potential downsides of HSAs, which can inadvertently exacerbate financial strain for employees.

Understanding the Downsides of HSAs

While HSAs can be beneficial, they come with several drawbacks that employers should consider:

1. Timing Issues: HSA funds must accumulate before they can be utilized. This can create challenges for employees facing unexpected medical events early in the year, leaving them without sufficient funds to cover necessary care.

2. Financial Strain: With inflation continuing to rise, many employees are already feeling the financial pinch. Research indicates that over 90% of employees are concerned about inflationary pressures, which can make the additional costs associated with HDHPs and HSAs even more burdensome.

3. Perceived Value: HSAs can often be viewed as merely transactional. Even when funded by employers, employees may not see them as valuable long-term benefits, especially since they are portable and can be taken to new jobs.

4. Employee Trust: With only 38% of employees expressing satisfaction with their jobs and a significant portion lacking trust in their employers’ intentions, it’s clear that benefits play a crucial role in employee retention. High turnover can lead to costly disruptions in productivity and continuity.

The Need for Guidance in Employee Benefits

Navigating the complexities of employee benefit plans can be overwhelming for many employees. Research shows that 72% of employees spend less than an hour reviewing their options during open enrollment. This lack of time and understanding can lead to poor decision-making, which can have lasting impacts on their health and financial wellness. Employers have an opportunity to bridge this gap by offering targeted health benefit solutions that address coverage voids and meet employee needs.

Introducing Expense Reimbursed Insurance Plans

Expense reimbursed insurance plans are designed to complement primary health insurance by providing additional coverage for eligible healthcare expenses. These plans can help fill the gaps left by HDHPs and HSAs, offering a more comprehensive safety net for employees. Here are some key advantages:

• Coverage for Everyday Expenses: These plans can reimburse employees for deductibles and routine care costs, such as copays, making healthcare more affordable.

• Support for Unexpected Costs: They can also cover unforeseen medical expenses, such as x-rays, lab work, or hospital stays, alleviating financial stress during challenging times.

• Flexibility in Coverage: Depending on the plan, expense reimbursed insurance can extend to a variety of expenses, including LASIK, dental, vision, and brand-name prescriptions.

Benefits for Employers

Employers can also reap significant rewards from implementing expense reimbursed insurance plans:

• Customizable Options: These plans can be tailored to specific employee classes or roles, allowing employers to target benefits where they are most needed.

• Layered Coverage: They can be added on top of existing health insurance plans or implemented independently, providing flexibility in benefit offerings.

• Year-Round Implementation: Employers can introduce these plans at any time throughout the year, allowing for adjustments based on employee needs and market conditions.

As open enrollment approaches, it’s essential for employers to think beyond traditional HDHP/HSA offerings. By considering innovative solutions like expense reimbursed insurance plans, they can enhance employee satisfaction, reduce financial strain, and foster a more loyal workforce. In a competitive hiring landscape, ensuring that employee benefits are robust and supportive can make all the difference in attracting and retaining top talent.

For employers looking to enhance their employee benefits, ArmadaCare offers a range of supplemental healthcare insurance solutions designed to meet the diverse needs of their workforce. By providing targeted benefit plans, employers can help keep their talent healthy, productive, and focused on their business goals. Explore how ArmadaCare can support your organization in navigating the complexities of employee benefits and ensuring a happier, healthier workplace.