Mar 09, 2021
CA Employers Respond to Rising Healthcare Costs
The COVID-19 pandemic has deeply affected the healthcare industry and medical premium costs are no exception, according to an employee benefits report by Ease. California’s small and medium sized businesses saw a 4% increase in individual premiums and a nearly 4% increase in family premiums from 2019 to 2020.
David Reid, CEO and co-founder of Ease said, "With premiums on the rise nationwide, small businesses need to look for more flexible, affordable plan options and voluntary benefits to help attract new talent and compete with larger companies."
Employers Narrow Plan Options
One way to help with affordability is to offer fewer medical plan options. Over the past three years, the number of medical plans offered per employee, nationwide, has decreased an average of 3%. This small but steady annual decrease since 2018 signifies an effort at cost containment by pointing employees to the most affordable plan options, such as high deductible health plans (HDHPs). HDHPs are particularly popular among Millennial employees. In 2020, employees in California selected HMOs more than any other plan type.
Voluntary Benefits in The War for Talent
Voluntary benefits offerings have also increased among companies looking to differentiate themselves in the talent market. The larger the company, the more voluntary benefits plans offered per employee. A company with 101-250 employees averaged around 3 more voluntary benefits plans in 2020 than a company with 1-10 employees.
The number of voluntary benefits plans offered per employee has increased by about 3% since 2018. The most popular plans are Dental, Vision, Life AD&D, Short-Term Disability, and Long-Term Disability. In California, the number of voluntary benefits plans offered per employee has increased an average of 2% since 2018.
The report also found an emerging digital-first care model. In fact, there was a 109% year-over-year increase in Ease brokers initiating telemedicine enrollment for their employer groups. One-third of brokers surveyed said they helped implement a telehealth option for their clients' employees. This new care model is unlikely to lose ground in 2021.
