Ever wonder what the next 5-10 years will look like for health benefits? Probably not. But we do need to consider the ever-changing landscape and new legislation to reveal what we can expect moving forward.
Health costs are unsustainable. About $2 in every $10 earned in the United States is spent on health expenses. This continues to rise as medical costs and premiums exceed the rate of inflation. As a growing family or someone living on a fixed income, you now have to determine whether you will take your life-saving medication or put food on the table. This is not the America we expect to live in, and we need to start making changes to our infrastructure to decrease costs.
3 Trends to Watch:
1. Digital Transformation and New Technology
It should come as no surprise that the emerging tech and rapid advancements in technology are and will continue to evolve the healthcare industry. The use of AI in medicine is only growing and we will see more and more companies leaning on this to gain efficiencies in hopes to reduce clinician burnout and reduce costs. While the technology itself won’t completely transform the industry, the insights gained will shape and modernize the offerings available to both businesses and consumers who want choice and personalization.
2. Focus on Prevention and Wellness
Over the last decade, we have seen a push for early detection and intervention to prevent long-term illnesses from spreading. While this has certainly helped increase the number of preventative screenings and tests, it has not reduced the number of people living with chronic conditions, or help people daily manage their overall health. What I mean by this is educating and equipping individuals with the resources to be successful in their health and wellness from physical to emotional wellbeing. This starts with the food we eat, a non-sedentary lifestyle and ultimately accountability and discipline at an early age to build sustainable life habits.
3. Transition to Alternative Models
Finally, we are already starting to see the move towards alternative health and payment models. Employers and employees are questioning what they are paying for and looking for ways to decrease costs. The growth in Health Reimbursement Arrangements alone has more than tripled in just two years[1]. With no minimum or maximum contribution limits, no employee size limitations, and meeting the large group health insurance requirement, an Individual Coverage Health Reimbursement Arrangement (ICHRA) has become a requirement for businesses of all sizes. We will continue to see more employers making this transition over the next few years, with a predicted 11 million employees and families covered under this model[2].
As the future and landscape of healthcare continues to evolve, we must stay vigilant but ready to embrace the changes that come with it. As an employer, you need to be aware of the legislation coming down the pipe that affects you and your business. For example, the Price Transparency Act, has continued to pave the way for a more equitable and affordable healthcare system. That being said, there are very specific requirements and penalties associated with non-compliance. As of January 1st, 2024, health insurance companies, self-insured and level-funded plans are required to provide price comparison tools for ALL services, including prescriptions. As these rules progress, it will be more difficult as a small or midsize employer to implement and accommodate without adjusting or eliminating your health benefits.
As an employee, you need to have an open mind and see the value in making adjustments that will better support your personal lifestyle. Change is always difficult and with health insurance operating in its current form for over a century, we have to transition to models that meet our more modern environments. With new approaches, the level of flexibility and choice is much greater and more likely to meet individual needs to support you in a well-balanced life.
We are truly in a new era of health benefits, characterized by customization, flexibility, and empowerment. Navigating the complexities will take time but it enables a future where employee health and well-being are prioritized and supported appropriately, like never before.
If you are interested in learning more about a Health Reimbursement Arrangement or an alternative model to traditional group health insurance, give us a call. Our team of seasoned experts are ready to help you make this transition as seamless as possible.
[1] HRA Council, 2022, “Growth Trends for ICHRA and QSEHRA”, https://hracouncil.wildapricot.org/resources/Documents/2022_HRAC_Data_FullReport_Final.pdf
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