5 Ways Employee Benefits Can Prevent Medical Debt

Medical debt is becoming its own kind of pandemic, with millions of Americans feeling the pressure of unpaid healthcare expenses. According to the US Consumer Financial Protection Bureau, there are currently $88 billion of outstanding medical debts currently in collections, affecting one in five[1] Americans. Debt can be crushing for individuals and families, with a trail of dominos ready to fall—distraction at work, depression, substance abuse, divorce, and more.
 
Employers are positioned to help prevent and mitigate medical debt among their workforce through the leveraging of employee benefits. Reducing the danger of medical debt can go a long way to improving productivity, reducing churn, and building lasting, loyal relationships between employers and their people. Here are five ways employers can help their members through employee benefits:


 

1. Building a comprehensive benefits package

You already know that offering a comprehensive, competitive health benefit plan is an effective way of attracting and keeping top talent. It is also the first line of defense against medical debt. Employers should aim to provide plans that cover a wide range of services, including preventive care, specialist visits, hospital stays, and prescription drugs. A robust plan can help employees access necessary medical care without facing prohibitive out-of-pocket expenses.

Learn more about flexible solutions at Luminare Health

 
Moreover, employers should consider offering options like Health Savings Accounts (HSAs) or Flexible Spending Accounts (FSAs), as allowed by IRS regulations, to help employees manage their healthcare expenses more efficiently. These accounts allow employees to set aside pre-tax dollars for medical expenses, helping reduce their overall healthcare costs and making it easier for members to utilize their benefits.
 

2. Wellness program

Much like saving for a rainy day, investing in employee wellness programs can yield significant long-term benefits. By promoting healthy lifestyles, employers can help employees avoid costly medical treatments and hospitalizations down the line while also helping to improve quality of life. Wellness programs can include initiatives such as gym memberships, nutrition counseling, mental health resources, and smoking cessation programs.

See our approach to wellness and population health management

 
These wellness programs are often promoted through health and wellness fairs and may also include health assessments or other tests to help customize the program for each member. Tying the programs to financial incentives may also help to improve utilization and encourage members to stick with the program once they have begun.
 

3. Telehealth Services

Once seen as a technological oddity, telemedicine has seen an enormous spike after the height of the COVID-19 pandemic. Telehealth services have emerged as a convenient and cost-effective alternative to traditional in-person medical visits and have also helped to improve access to medicine in remote or otherwise underserved areas. Offering telehealth options to underserved populations not only helps to reduce the barriers to healthcare but also prevents members from having to incur debts due to travel and accommodation costs while accessing care far from home.

Learn more: myVirtualCare Access, care by Teladoc

 
In addition, employers can partner with telehealth providers to offer virtual consultations for non-emergency medical issues and primary care, thus saving employees time and money while making preventive care easier to obtain.
 

4. Communication and empowerment

Employers are uniquely positioned to communicate with their members about their benefits and the best way to use them. Do members know when they should go to the ER versus urgent care? Do they know how to find in-network providers, or how to shop around to find the best price on imaging services? Most people outside of our industry would benefit from a healthy dose of health benefits education! By educating members, employers can empower them to make better healthcare decisions and avoid needless expenses. A good benefits administrator can provide engaging tools and communications for employers to help their members when they need it most.

Digital tools for members

 

5. Reference-based pricing

It is no secret that the prices charged for many healthcare services are not always based on cost. Reference-based pricing (RBP), however, is tied to Medicare reimbursement rates. In the RBP model, payers look at the current Medicare reimbursement rate, add on a set percentage, and then negotiate with the provider to accept that amount as payment. This relatively new way of looking at healthcare spending is seeing some encouraging success in reducing costs for employers and members. Depending on the RBP plan, members may have access to advocates to help facilitate negotiations with providers to reduce overall charges for members.

Significant savings with RBP

 

High five for debt relief

Consumer medical debt is a life-altering situation for millions of Americans and can have long-lasting financial, emotional, and physical repercussions. Employers have a unique opportunity to make a meaningful impact by leveraging their influence and resources to support their employees' healthcare needs proactively.
 
These investments in people and employee well-being not only foster a healthier and more productive workforce but also reinforces a company's commitment to its employees' financial security and overall quality of life. As employers continue to navigate the evolving landscape of healthcare and benefits, prioritizing initiatives that address consumer medical debt can make a significant difference in the lives of employees and their families.
 
Fill out the contact form below to find out how we can help reduce the burden of medical debt for employees.