According to the EBRI Individual Deductibles have increased 336% from 2002 to 2020.
This increase is outpacing the Consumer Price Index which measures price levels and inflation, which only rose by 47% in the same timeframe. Employees are now being required to spend more to hit their deductibles, and there are a variety of reasons that this increase is outpacing the trend of common inflation. One major factor that makes a big difference is that employers are turning to high deductible health plans more than in the past. The article “Employers Face ‘Tension’ Between Health Care And Financial Wellness” discusses the fundamental tension between employers requiring workers to share more of the payment for medical expenditures while embracing financial wellness programs.
Jason Chepenik, Senior Vice President of Retirement + Wealth office in Orlando, Florida, commented that he believes that plan sponsors need to take the long view and not always default to high-deductible health plans because they’re the easiest. He believes that…
They(plan sponsors) should also be looking at total benefits spend—not siloed [considerations of] how much is my health insurance, how much is my dental, separate from their 401(k) contribution or the retirement plan savings,” he says. “It should be a conversation about all the benefits—look at total benefits spend and the impact to an organization and have a three- or five-year game plan tied to data and outcomes.
— Jason Chepenik, Senior Vice President, OneDigital Retirement + Wealth
To read the full PlanSponsor article click here.
Want to read more from Jason Chepenik? Check out his recent article: How to Help Employees Save for Retirement and Plan for the Future.
Investment advice offered through OneDigital Investment Advisors, an SEC-registered investment adviser and wholly owned subsidiary of OneDigital.