Does Your Benefit Plan Help or Harm Your Employees with Medical Debt?

Medical Debt

Let’s start by establishing that we don’t want our health plan, or rather it’s lacking, to put our employees into debt.  It can be crushing.

“In their efforts to service or pay off their debt, adults with health care debt report making a number of sacrifices and enduring substantial financial consequences. Most report cutting back on household spending, and more than four in ten say they or a household member have used up all or most of their savings due to their health care debt. Many also report more serious consequences like skipping payment on other bills, delaying college or buying a home, or changing their housing situation as a result of their debt. In addition, about half of adults with health care debt say they have made what they feel to be a difficult sacrifice in order to pay down their debt. These sacrifices have left some individuals feeling as if they could not provide a good life for their families, or with a general sense that they will never be able to extricate themselves from debt,” says Kaiser Family Foundation in a 2022 report. 

They go on to share, “Health care debt can also affect the ability of individuals to access needed medical or dental care. One in seven adults with health care debt say they have been denied care by a provider due to unpaid bills. In addition, adults with health care debt are more than twice as likely as those without debt to say they or someone they live with have postponed or skipped getting needed health care because of the cost.”

How we Can Help Employees Avoid Medical Debt

As you get ready to roll out your benefit plans, are there pitfalls in your plan that can cause strain, stress and financial burden on your employees?

Let’s ask these questions in the spirit avoiding medical debt for our employees and giving them great health coverage:

• First, is the deductible too high for your employees?  Would they have to wipe out their savings to cover a $5,000 deductible? A $3000 deductible?
• Is there an opportunity to offer a FSA where you can educate your employees on saving for medical expenses?
• Should you consider a limited employer sponsored HRA or GAP plan to help offset the deductible?
• Could an employee purchase a voluntary offering of a GAP or medical bridge?
• Finally, do you need to stress an EAP program or health advocacy program to educate your employees on how to handle surprise medical bills?

Let’s answer these questions with some strategies to make our plan better:

• Start now with something simple like an FSA!
• While we may not be able to afford to make our plan benefits any better,  but we can let our employees have the option to buy a GAP product!
• We really need to offer contributions to an HSA or step an HRA to really help our employees save for medical expenses!
• We already have a health advocate line or an EAP.  Let’s promote that and emphasize how that can help!

While planning, let’s address the potential to reduce financial stress on your employees!  And, if you already have employees dealing with medical debt, we can connect them with an advocate that may be able to help.