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Dental and Vision Benefits Are Inexpensive, and a Big Hit with Workers 

by Inoventive Solutions
May 26, 2022

Employers nationwide are looking for ways to attract and retain talent and differentiate themselves from competing employers, and many are looking to the two most popular voluntary benefits: employee dental and vision plans.

That’s important in today’s tight job market. After all, a recent survey from CareerBuilder found that 55% of workers believed an employer’s menu of benefits was more important than salary when considering a job position or offer.

Here’s why dental and vision benefits are so popular and why, if you don’t already do so, you should consider offering them as well.

Background

For many years, dental and vision plans were employer-paid. They were just part of a standard package available to full-time workers at little or no cost to themselves.

However, as businesses have tightened their belts, many of them moved dental and vision plans to the voluntary benefits side of the ledger, with employees picking up some or all of the premium costs via payroll deduction.

Even when workers are covering the costs, dental and vision plans are overwhelmingly popular with them, because of the relatively low out-of-pocket premiums and the terrific value they provide.

Appeal to workers

Employees like vision and dental benefits because they provide real savings that they and their families are able to see every year — because they actually use the plans. 

That’s compared to other voluntary benefits like major medical, life insurance and disability insurance, which employees may need many years down the road, if ever.

According to the “2021 MetLife Employee Benefit Trends Survey,” 68% of employees consider dental insurance and 49% consider vision benefits to be among their “must have” benefits.

Their employers like them because they can provide these benefits, cementing the bond of loyalty between the employer and employee, for a small fraction of the overall compensation budget. Indeed, dental premiums have been falling in recent years.

Appeal to employers

Employers are also embracing dental and vision care as research is increasingly pointing to good dental and vision health as correlated to overall health — hopefully improving worker productivity and reducing eventual health care costs. 

For example, diabetes and high blood pressure are increasingly being discovered during routine eye exams. Optometrists across the country are commonly finding early warning signs of hypertension from observing ocular pressure — a nearly invisible symptom outside of eye exams.

Their patients armed with this knowledge are able to seek intervention before their condition worsens and results in bigger claims against the employer health plan. A study by HCMS Group found that:

  • 34% of all diabetes cases are first identified via eye exams, at a saving of $3,120 per employee, according to HCMS Group.
  • 39% of all hypertension cases are first identified via eye exams, at an average saving of $2,233 per employee.
  • 62% of high-cholesterol cases are first identified through eye exams — saving $1,360 in eventual health care costs thanks to early detection.

Finally, simply offering something like a vision plan — especially to workers who are at high risk of eye strain from staring at a computer for hours every day — sends an important message to workers that you care about their wellness. 

Who pays premiums?

According to the National Association of Dental Plans:

  • Only 6% of employers are currently paying the entire cost of employee dental benefits.
  • At 24% of employers, the worker pays 100% of the cost via a payroll deduction program.
  • 70% of employers share the premium cost with staff who sign up.

Plan structures

Furthermore, about 80% of group dental plans are preferred provider organizations, or PPOs, which aim to control costs by contracting with a limited network of providers willing to cut their rates to plan members in exchange for the promise of a steady stream of plan referrals.

The percentage of plans embracing the PPO model has been increasing, while dental HMOs and old-fashioned indemnity plans have been losing market share. 

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Employers Focus on Cost Containment, Mental Health and Telemedicine

by Inoventive Solutions
May 18, 2022

A new survey has found that managing health care costs and expanding mental health benefits will be a top priority for U.S. employers as they ramp up benefits to compete for talent in the tight job market spawned by the COVID-19 pandemic.

Additionally, virtual care is expected to become an essential and long-lasting feature of employers’ health insurance and employee benefits strategies over the next few years, according to the “2022 Emerging Trends in Healthcare Survey” by Wills Towers Watson.

The focus on health care and insurance costs, mental health and expanded telehealth comes as employers continue pulling out all the stops to compete in a tight job market but face health care inflation headwinds.

Here’s the direction many employers are going, according to the survey.

Dealing with rising costs

In light of continuing rising health insurance costs, 94% of employers surveyed said they are redoubling their efforts to make benefits more affordable for their workers.

Nearly two-thirds of employers (64%) said they will take steps to address employee health care affordability over the next two years. Steps they are considering include:

  • Improving quality and outcomes to lower overall cost.
  • Adding or enhancing low- or no-cost coverage for certain benefits.
  • Making changes to their employees’ out-of-pocket costs.
  • Increasing the amount they contribute towards their employees’ health insurance premium.

Employers also felt that many of their employees were not getting the most out of their benefits and needed further education on all of their offerings. More than half (54%) said that lack of employee awareness about where to find programs to support their needs was a significant challenge.

Mental health

Eighty-seven percent of employers said that enhancing mental health benefits will be a priority for them.

That’s in response to numerous studies and reports indicating that the COVID-19 pandemic has spurred a mental health crisis.

Another poll — the “Workforce Attitudes Toward Mental Health” report — by Headspace Health illustrates the depths of the problem:

  • 83% of CEOs and 70% of employees report missing at least one day of work because of stress, burnout and mental health challenges.
  • Only 28% of employees report feeling “very engaged” in their work.
  • Top global stressors for employees are COVID-19; burnout because of increased workload or lack of staff; poor work-life balance; and poor management and leadership.
  • 40% of women and 33% of men surveyed said they feel burned out at work.
  • Remote workers are feeling increasingly isolated.

In response to this, 66% of employers surveyed by Willis Towers Watson said that ensuring that their health and well-being programs support remote workers will be a key priority of their strategy over the next two years. More than six in 10 employers plan to enhance programs and well-being activities to focus on health issues of their employees’ family members.

Virtual care

Use of virtual care — or telemedicine — has exploded during the pandemic, particularly in 2020 and 2021, when many people were afraid to go to the doctor in person for fear of contracting COVID-19.

Additionally, many health care providers pushed virtual care to avoid having too many people come to medical facilities that were burdened by an avalanche of patients.

Congress passed laws allowing health insurers to cover telemedicine as they would other visits to a doctor. And now telemedicine is poised to be a permanent fixture of employers’ health care strategies.

Willis Towers Watson found that by the end of 2023:

  • 95% of employers expect to offer virtual care for medical and behavioral health issues,
  • 61% of employers expect to offer lower cost-sharing for virtual care,
  • 53% of employers expect the expansion of telemedicine to help decrease costs in the long run, and
  • 50% believe virtual care will improve health outcomes for their employees.

Fortunately for employers, a number of companies have cropped up during the last few years that focus on delivering state-of-the art telemedicine platforms.

The takeaway

The pandemic has spurred many employers to prioritize their employees’ well-being, as well as look for ways to manage costs.

With competition for employees fierce, many employers are focused on reducing their staff’s share of costs, while also expanding mental health services in response to growing demand.

Meanwhile, telemedicine services are still evolving, a trend that’s likely to continue for the foreseeable future as health care providers, insurers and employers see it as a way to rein in some costs.

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IRS Sets Health Savings Account Maximums for 2023

by Inoventive Solutions
May 13, 2022

The IRS has announced significantly higher health savings account contribution limits for 2023, with the amount increasing more than 5% for individual HSA plans.

The new limits were announced in conjunction with other changes, such as increases in the minimum deductibles and maximum out-of-pocket expenses for high-deductible health plans (HDHPs).

The IRS also announced rises in the maximum contribution amounts to excepted-benefit health reimbursement arrangements (HRAs).

The increases are much larger than usual due to inflation, which has been trending higher than it has in more than four decades.

Here are the new figures for 2023:

HSA annual contribution limit

  • Individual plan: $3,850, up from $3,650 in 2022
  • Family plan: $7,750, up from $7,300 in 2022

HDHP minimum annual deductible

  • Individual plan: $1,500, up from $1,400 in 2022
  • Family plan: $2,800, the same as in 2022

HDHP annual out-of-pocket maximum

  • Individual plan: $7,500, up from $7,050 in 2022
  • Family plan: $15,000, up from $14,100 in 2022

Maximum out of pocket for ACA-compliant plans (non-grandfathered plans)

  • Individual plan: $9,100, up from $8,750 in 2022
  • Family plan: $18,200, up from $17,400 in 2022

Excepted-benefit HRAs

Maximum annual employer contribution: $1,950, up from $1,800 in 2022. Excepted-benefit HRAs are limited to paying for vision and dental coverage or similar benefits exempt from the ACA, and are not covered by the employer’s primary group plan.

For those 55 or older: People who are 55 or older are allowed to contribute an additional $1,000 a year to their HSA, under federal law.

Also, if both spouses with family coverage are 55 or older, they must have two HSA accounts in separate names if they each want to contribute an additional $1,000 catch-up contribution.

If only one spouse is 55 or older but the younger spouse contributes the full family contribution limit to the HSA in his or her name, the older individual must open a separate account to make the additional $1,000 catch-up contribution.

HSAs explained

Under federal law, an HSA must be tied to an HDHP. An HSA is a special bank account that can be used to pay for or reimburse for your employees’ eligible health care costs. They can put money into their HSA through pre-tax payroll deduction, deposits or transfers.

As the amount grows over time, they can continue to save it or spend it on eligible expenses.

Employers can also contribute to the accounts, but the annual contribution maximum applies to all contributions in total (from the employee and the employer).

The money in the HSA belongs to the employee and is theirs to keep, even if they switch jobs. The funds roll over from year to year and can earn interest. Some plans also have investment options for the funds.

Here’s how they work:

  • Employees can make withdrawals with a debit card or check specific to the HSA.
  • Employees can use the money in their HSA to pay for care until they reach their deductible, out-of-pocket expenses like copays and coinsurance.
  • They can use the funds to pay for other eligible expenses not covered by their HDHP, like dental or vision care (eye exams and corrective lenses).

Planning ahead

Knowing what these limits are in advance can help employers plan their messaging for the 2023 open enrollment season.

If you want to get ahead of the ball, you can start updating your payroll and plan administration systems to reflect the 2023 amounts.

You should also include the new limits in relevant communications you send to your staff, particularly in regards to open enrollment, plan documents and summary plan descriptions for next year.

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Year-Long Benefits Education Yields Happier Employees

by Inoventive Solutions
May 3, 2022

While most organizations ramp up their benefits communications about a month before open enrollment starts, the efforts often drop off at the start of the year.

That’s a shame because many employees are woefully unaware of how their benefits function and are often not taking full advantage of what their employer and they are paying for. Employees that don’t understand their benefits fully may end up paying out of pocket for services that are covered.

With surveys showing that three in five employees have only a basic understanding of the benefits they receive from their employer, it’s important that you continue to educate your staff about their benefits, coverage changes brought on by recent regulations and how to get the most out of their current benefits.

If you enlighten them about what they have and how to use those benefits, they will be more likely to stay with you.

Keep it going

The month or two prior to open enrollment is when most companies kick their benefits communications into high gear. They start sending their employees e-mails, mail and memos making them aware of open enrollment and that they can start researching plans.

Most companies will hold at least one meeting with the troops to answer questions and explain any changes that are being made. But after open enrollment ends, communications often go into hibernation until the prelude to the next open enrollment.

You can fill that void by regularly “dripping” information to them over the course of the year. Each drip can be a short benefits meeting or educational information that is sent out to your employees.

For example, under a Biden administration executive order, as of Jan. 15, all health insurers are required to reimburse covered individuals for up to eight at-home COVID-19 tests per month. By keeping your staff informed of developments like these, they can save money and take advantage of this benefit more fully. Here’s how:

Be proactive

It’s important that you communicate benefit developments to your staff, and that requires that your human resources or benefits team stays on top of changes.

It’s the team’s responsibility to proactively alert employees about changes and updates about their benefits, as well as reminders about how certain benefits work. By sending out these reminders, or holding meetings, you can educate your workers in making the right benefit and coverage decisions.

Leverage technology

One key part of educating your employees requires tapping technology by offering an online hub that houses all of the information about each of the benefits you offer. This way, they can go to this source first if they have questions. It’s also more convenient for them as they can access it in the privacy of their homes.

Many health plans now also have apps for enrollees that give them a plethora of information about their coverage, including how much they have paid in deductibles over the year and other information about their health insurance.

Plan communications for the year

Design a content calendar that focuses on putting out timely information and reminders. For example, remind employees about how their health savings account works and what they can spend the funds on.  

During flu season, send out reminders on preventative measures they can take, including how their health insurance can help them get a flu shot.

Another topic could be instructions on adding spouses to their plans or notifications about Medicare for employees who are nearing 65 years old.

The key is to stay in front of your staff and always encourage them to come to your benefits team with any questions they have. One e-mail to your team could result in reminding one of them to come to you for clarification about their coverage.

The takeaway

By regularly communicating about your benefits to your staff, you can provide them with the confidence that they have the information they need about their benefits, and that if they don’t, they know how to get it. That in turn helps them make the best decisions for themselves and their families.

And your organization will also benefit as regular engagement gives you the opportunity to better evaluate your benefits offerings and identify areas where you can improve or expand.

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