A crack in the foundation

As More Employers Offer High Deductible Health Plans, Working Americans Require More Support

Insufficient funds and lack of education lead workers to take risks with their health

NEW YORK, N.Y., September 29, 2016 – The Guardian Life Insurance Company of America® (Guardian) is one of the nation’s largest mutual life insurers and a leading provider of employee benefits.

Today, Guardian released A Crack in the Foundation, the first set of findings from the fourth annual Guardian Workplace Benefits StudySM.

The research reveals that more American businesses are offering their employees high deductible health plans (HDHPs), but consumers require more support and education in the workplace to understand their options and to mitigate longer-term health risks.

A Health Savings Account (HSA) offered in conjunction with an HDHP enables employees to set aside pre-tax dollars to cover out-of-pocket medical expenses. Employers may also contribute to their employees’ HSA to provide a base level of funding. Yet, three in five employers do not offer an HSA alongside their high deductible plan. This is especially true of businesses with fewer than 50 employees – a segment that accounts for nearly 30% of all working Americans1.

Even when employees have access to an HSA, many do not fully understand how to fund or utilize it. Effective employee education and communication about ways to properly use an HSA is important to ensuring workers can cover their medical bills. Notably, three in five workers are unable to pay a $3,000 out-of-pocket medical expense. Faced with such an expense, the study found:

HDHPs help employers rein in medical costs, but potentially at the risk of higher catastrophic medical and disability claims in the long term

  • 37% would have to make a deal with the provider to pay over time
  • 34% would have to put the bill on a credit card
  • 9% would ask for a loan from friends/family
  • 6% would take a bank loan

An unintended consequence of this financial stress is the risk working Americans are taking with their health, which includes ignoring medical advice or neglecting their own health care. One in three employees with an HDHP state that because of the high out-of-pocket costs they did at least one of the following in the past year:

  • Skipped a doctor visit
  • Delayed a recommended procedure/surgery
  • Failed to fill a prescription
  • Avoided a blood test or x-rays

Finally, offering supplemental health benefits, such as hospital indemnity insurance, accident insurance, or critical illness insurance, can also help to offset certain costs associated with medical care not covered under an employee’s health plan.

“The study reveals a correlation between high out-of-pocket medical costs and delaying or ignoring medical care. HDHPs help employers rein in medical costs, but potentially at the risk of higher catastrophic medical and disability claims in the long term,” said Dave Mahder, Vice President and Chief Marketing Officer of Group and Worksite Markets. “Employers offering HDHPs can help employees fund out-of-pocket expenses through Health Savings Accounts (HSA) and supplemental health benefits, but there’s still room for improvement.”




For more information about Guardian’s Workplace Benefits or to obtain a copy of A Crack in the Foundation from The Guardian Workplace Benefits Study SM: Fourth Annual 2016, please visit here or Guardian Anytime.
About the Survey
The 4th Annual Guardian Workplace Benefits Study was fielded in the spring of 2016 and consisted of two online surveys: one among 1,204 benefits decision-makers (employers) and another among 1,700 working Americans (employees), allowing us to examine benefits issues from both perspectives.
About Guardian
The Guardian Life Insurance Company of America® (Guardian) is one of the largest mutual life insurers with $7.3 billion in capital and $1.5 billion in operating income (before taxes and dividends to policyholders) in 2015. Founded in 1860, the company has paid dividends to policyholders every year since 1868. Its offerings range from life insurance, disability income insurance, annuities, and investments to dental and vision insurance and employee benefits. The company has approximately 8,000 employees and a network of over 3,000 financial representatives in more than 70 agencies nationwide. For more information about Guardian, please visit our website. You can also follow Guardian on Facebook, LinkedIn, Twitter and YouTube.
Financial information concerning The Guardian Life Insurance Company of America® as of 12/31/15 on a statutory basis: Admitted Assets = $48.1 Billion; Liabilities = $42 Billion (including $37 Billion of Reserves); and Surplus = $6.1 Billion.
1 Bureau of Labor Statistics