What you need to know about healthcare benefits in 2022
While the new year seems like a new beginning for most workers, it should also come with an increase in health insurance premiums. Premiums and deductibles have been increasing steadily for years. The Kaiser Family Foundation (KFF) found that premiums for a family increased by 4% in 2021, according to a survey focusing on employer-sponsored benefits.
The average family pays $ 22,221 in bonuses, according to KFF. Workers contributed $ 5,969 to their coverage, while employers paid the remainder. In fact, since 2011, average family bonuses have increased by 47%, which KFF said was higher than wages (31%) and inflation (19%).
Not only is this a financial hardship for American families, but it also exhausts businesses that struggle to maintain coverage for their employees. To complicate matters, several federal health care support programs are scheduled to expire in 2022.
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What to expect in health care coverage
Rising health care premiums is only part of the problem. Franchises are also skyrocketing. This is the amount workers have to pay before insurance takes effect and could make a huge financial difference for families with serious health problems.
The average single deductible has doubled over the past decade to reach $ 1,669. For more affordable health care plans, deductibles can be as high as $ 8,000. Overall, 85% of the 155 Americans with employer-sponsored coverage have a deductible.
Another survey conducted by the Health business group anticipates an increase in health spending of up to 6% in 2022. Analysts pointed out that 2021 rates actually flattened slightly because many Americans avoided treatment during the pandemic. This is expected to end in 2022, which will push prices up. Of all employers surveyed by BGOH, 94% expected higher medical costs due to delays in treatment.
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Federal support programs expire
Federal legislation also expires in January 2022. The Coronavirus Aid, Relief and Economic Security Act (CARES) was one of the first bills signed in 2020 to help workers. It gave money to businesses, improved unemployment programs, and funded hospitals.
A provision known as the “Safe Harbor” has allowed high-deductible health plans to cover telehealth and remote care services at little or no cost. The CARES law expired on December 31 and will now have an impact on those eligible for telehealth services.
Another rule under the American Rescue Plan Act (ARPA) in 2021 allowed for mid-year election changes for Dependent Reimbursement Accounts (DCRA). This allowed workers to choose higher limits to help pay for pre-tax child care costs. ARPA also expires on December 31. If the new, higher exclusion limit is not extended until 2022, families will face the previous limit of $ 5,000.
About 30 million Americans get their health coverage in the market, which was established by the Affordable Care Act. With more enrollees and more plans available in 2022, experts anticipate a change in premium subsidies that could increase the total price people have to pay.
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How to deal with higher healthcare costs
Employers won’t be able to avoid higher health care premiums, but they can implement some mitigating measures. A recommendation is to switch to high deductible plans or to incorporate health savings accounts (HSAs). High deductible plans may not be right for everyone, but younger or healthier employees may benefit from lower premiums. They also help share the costs. HSA accounts allow employees to send a portion of their pre-tax salary to cover eligible medical expenses.
Educating employees about health care plans is also effective in driving down prices. By truly understanding what is available, employees will be able to select the most cost effective plan and begin to benefit from preventative health programs. Small businesses (less than 50 employees) also have the option of placing their employees in the ACA market under the Small Business Health Options Program (STORE).
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Navigate the future
Regardless of what employers decide to do, HR departments need to be proactive in guiding employees through the process. Healthcare decisions are complex, and no company wants disgruntled workers after plan cuts or changes without notice. Clear communication and support are needed to ensure a smooth transition that benefits everyone.
Businesses and HR departments should also keep in mind that the benefits they ultimately choose will define future hiring. Health care benefits are a major decision factor for most prospects.
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