The Next Big Disruption to Healthcare: How HR Can Manage Health Insurance

Adam Olson, VP of Product Marketing, Enrollme by SureCo, discusses how technological advances in the healthcare field has the potential to improve the entire system and improve how companies manage health insurance.

If encouraging employees to enroll in health insurance wasn’t difficult already, HR departments face several equally troubling challenges, including the record number of personnel leaving their jobs and the growing shortage of skilled candidates to fill vacancies. The cherry on top, however, is that HR departments across America still use ineffective systems and means of managing their health insurance. Nevertheless, technological advances in healthcare are poised to disrupt an otherwise outdated paradigm.

Most notably, a digital marketplace platform permitting employees to explore, compare and purchase competitively priced healthcare plans based on criteria that best fit their unique needs. Pair this groundbreaking innovation with the recent passage of the Individual Coverage Health Reimbursement Arrangement, and businesses can finally allow their workers to select their health plans. These developments will immensely improve how companies and their HR manage health insurance.

The History of “Employer-sponsored” Health Plans 

Before exploring (and appreciating) how a digital platform revolutionizes health insurance, it’s necessary to examine how the healthcare field got so inefficient. Like many norms of the modern world, the story of how employees got healthcare benefits begins with WWIIOpens a new window . Companies needed to attract talent, notably women, and they were limited in raising wages to entice workers due to the 1942 Stabilization Act. So, businesses used health insurance as a differentiator since it did not count as income, and people didn’t have to pay taxes on those benefits. 

Fast forward to today, and now more than 156 million Americans fall within employer-sponsored healthcare programs. The modern health plan model is one where an employer or employee organization offers coverage to its workforce and their families – then the insurer will establish a premium price after calculating risk factors based on general information balanced over the whole group. While popular, favor of this one-size-fits-all system is waning as Americans – each with unique health risks, concerns, and values – come to expect more from their healthcare.  

The Inadequacies of the Current Health Insurance System 

In addition to being very rigid, the current open enrollment process is confusing to many Americans and frustrating to the HR staff that must prepare it for them. From the employee’s perspective, the current system is very bothersome as workers transitioning to a new job mid-year must start over again under their new employer’s plan, regardless if they met their previous health insurance deductible. Other issues that might arise are changes to in-network providers and coverage, which could increase the chances of out-of-pocket payments and even restrict someone’s access to their preferred care.   

From an HR point of view, open enrollment is already a highly involved and time-consuming process, with COBRA and ACA-reporting requirements piling on another layer of complexity. Similarly, HR departments must invest considerable effort in building and administering benefits packages – sometimes, these plans don’t always meet the diverse needs of their workers. Likewise, all of the time and resources HR puts into health insurance and benefits engagement is energy that doesn’t get directed toward employee retention and recruitment.

See More: How is Artificial Intelligence Impacting Healthcare?

Changing of the Guard 

Uncharacteristic of the past, employees are more likely to switch jobs, never staying with one for more than a few years – this is especially true amongst younger workers who are twice as likely to leave one company for another. And because the younger generations are digitally native, they have a greater need for flexibility, personalization, and convenience, resulting in frequent job changes. 

One study found that 40% of employeesOpens a new window  are at least somewhat likely to leave their current position, with 60% of those in the “somewhat likely” category saying they’d leave without another role prepared. Interestingly, since the pandemic, employers stating that healthcare benefits are “very important” rose by 11 percentage points, reflecting the heightening competition for qualified candidates amid the skilled labor shortage. 

Regardless of why people look for new roles, the Great Attrition of today has forced many HR departments to prioritize employee health benefits. Overwhelmingly, employees rate healthcare benefits as a key factor when evaluating a job, and a UnitedHealthcare survey discovered that over one-third of people research and compare healthcare plans. In light of labor scarcities, low employee engagement, and rising dissatisfaction, HR departments must leverage digital marketplace platforms that simplify healthcare plan search and selection while giving workers greater freedom of choice. 

The Benefits of a Digital Marketplace for HR and Employees

With a digital marketplace, the responsibility of plan and benefits selection is taken off the shoulders of HR and given to employees (who will gladly accept it), empowering HR to focus on more critical tasks, like business growth via recruiting quality hires. A digital marketplace for health insurance will also save businesses significant time and money by eliminating COBRA, simplifying ACA reporting and reducing administrative responsibilities, such as creating health plan packages, educating employees and managing open enrollment.

Because employees have the freedom to browse, compare and select health plans that fit their individual needs and budgets, they will be much more engaged, satisfied, and motivated to participate in the company’s success. Research shows that many job seekers consider a business’s benefits package almost as valuable as salary pay, making an employee-centric and user-friendly digital marketplace vital for HR when attracting and retaining employees. Moreover, by enabling staff to select the most cost-effective and quality plans from recognized carriers through a digital marketplace, HR can play an active role in controlling health insurance costs, thereby lowering the cost of health insurance for employees and the company.

Technological Innovation Inevitably Causes Change   

Just as 401k’s replaced pension funds, so shall digital marketplaces for health insurance shake up established norms for healthcare. Indeed, many long-standing customs have shifted toward more employee-driven, customer-centric and – most importantly – digital models. From Amazon overtaking retail to ride-sharing outdoing taxis, traditional systems continue to face disruption, and corporate health insurance is sure to follow. While it won’t get swapped with something new, innovative technology solutions will arise to address various pain points of corporate health insurance. Considering the sorry state of the healthcare industry, coupled with the Great Attrition and skilled labor shortage, HR departments will inevitably take advantage of any solution, like a digital marketplace, that helps them manage health insurance more effectively. 

How do you think companies can leverage technology to manage health insurance? Let us know on FacebookOpens a new window , TwitterOpens a new window , and LinkedInOpens a new window .

Image source: Shutterstock

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