The wise adage: “the numbers speak for themselves” has perhaps rarely been more true than for companies struggling to characterize health coverage as a “benefit” to all workers.
No wonder. According to the Kaiser Family Foundation 2017 Employer Health Benefits Survey, the average cost of family health coverage for companies with more than 200 workers has increased:
- from $5,845 per family in 1999
- to $19,235 in 2017
This inflation of over 225% represents an average increase of $765 per family each and every year. What growing large company can endure that on a continuing basis? The numbers speak for themselves.
And yet during the same time period, their smaller company competitors, (those with fewer than 200 workers) experienced increases far less:
- starting at roughly the same level of $5,683 in 1999
- but ending at only $17,615, in 2017
The resulting 2017 level is $1,600 less expensive per year than the larger company competitors. How is it that these “small companies” with arguably no scale or leverage, fared so much better competing for the best and brightest workers? A contradiction? An anomaly? Or a new trend? Again, the numbers speak for themselves.
The truth is, less than 25 percent of workers will consume more health care in a year than the amount that they and their company contribute to the “health benefit.” As a result, MOST working Americans would rather be able to exchange some of that expensive and unused health coverage for more cash income.
Perhaps this is why worker satisfaction levels for health coverage as a uniform benefit scores so low. According to Gallup, workers rate their satisfaction for controllable worker pay and benefits in 2017 as follows:
- Flexible Work Hours 64% Completely Satisfied
- Job Security 60% Completely Satisfied
- Vacation benefit 56% Completely Satisfied
But those same workers rate their satisfaction for health coverage this way:
- Health Insurance 40% Completely satisfied
- Health Insurance 26% Dissatisfied
Another contradiction? The numbers speak for themselves.
And who really “benefits” from this expensive health coverage? The truth is, less than 25 percent of workers will consume more health care in a year than the amount that they and their company contribute to the “health benefit.” As a result, MOST working Americans would rather be able to exchange some of that expensive and unused health coverage for more cash income. This reveals the contradiction that what the employer presents as a “benefit” does not help 75 percent of the workforce. Indeed, in the same Gallup survey, workers said they were MOST dissatisfied with cash compensation (or the lack there of):
- Cash Compensation: 30% completely satisfied
- Cash Compensation: 22% dissatisfied
Thankfully, new health benefit models for larger employers have emerged from companies such as Hixme. Hixme’s WorkPlace Market actually empowers workers to separately select portable, personally owned coverages from the heath insurer of their choice for each family member. This allows far more of the employer’s contribution to be converted to cash take-home pay if they are among the 75% of workers who would prefer more money in their paycheck.
ABOUT THE HIXME THINK BLOG: Authored by one of the gurus of health insurance, Denny Weinberg, postings reflect market trends and the powerful emerging movements toward true portability and personal ownership by workers and their families. Postings follow these emerging trends, driven by consumer ownership of retirement benefits, consolidations by health care institutions, and the stated pro-consumerism goals and actions of the administration, federal agencies and Congress.