workplace benefits study

High Deductible Health Plans Taking a Toll on Working Americans

Perceived value of employee benefits declined in 2016; Gen X/Middle Income workers affected the most

NEW YORK, N.Y., Nov 2, 2016 – The Guardian Life Insurance Company of America® today released A Crack in the Foundation, the first set of findings from the fourth annual Guardian Workplace Benefits StudySM.

The study exposed how out-of-pocket medical expenses threaten working Americans’ financial well-being and negatively influence health care behaviors.

Guardian is one of the nation’s largest mutual life insurers and a leading provider of employee benefits,

Working Americans’ finances suffer as employers continue to shift more health care costs onto their employees. Sixty percent of workers with medical coverage report that their deductible is over $1,200, including a quarter who pay $3,000 or more. Yet, three in five workers cannot afford a $3,000 out-of-pocket medical expense.

Faced with such an expense, the study found:

  • 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
  • 6% would take loan against their retirement plan

An unintended consequence of this financial stress is the risk working Americans are taking with their health, which include ignoring medical advice or neglecting their own health care. Workers with high deductible health plans (HDHPs) face greater cost responsibility than those in more traditional health plans.

The study reveals a concerning correlation between high out-of-pocket medical costs and delaying or ignoring medical care.

One in three employees with an HDHP state that because of the higher costs they:

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

“The study reveals a concerning correlation between high out-of-pocket medical costs and delaying or ignoring medical care. HDHPs may initially help 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. Today, just two in five private employees with an HDHP also offer an HSA.”

As employees pay out-of-pocket for a significant portion of their medical expenses they also begin to question the usefulness of their employee benefits. For the first time, Guardian’s Benefits Value Index (BVI) score – a measure of the perceived value of employee benefits – declined from 7.1 in 2014 to 6.7 in 2016. Generation X and middle income workers showed the most significant declines in benefits satisfaction.




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.