Employer-sponsored health insurance historically offered access to affordable health care to many Americans of every social and economic class. But low-wage workers face particular challenges in the current approach to health care financing. Given that health care costs are unlikely to fall in the foreseeable future, what can employers do for their low-wage workers in the meantime?
OFFER HIGHER SUBSIDIES
Employers with high margins or large cadres of high-wage workers can afford to offer higher subsidies to low-wage workers.
OFFER A CHOICE.
Low wage workers benefit from having a choice of health plans that include lower
deductibles and lower variability in potential out of-pocket liability.
HELP THEM MAXIMIZE POTENTIAL OUTSIDE SUBSIDIES.
Many companies eliminated coverage for part-time employees in 2014 and 2015, when the Affordable Care Act offered subsidized plans on the individual market. Part-time coverage usually came with high employee-paid premiums, and the majority of part-time employees were able to purchase a better health insurance plan for a lower premium on the exchange markets.
OFFER PLANS WITH LOW OUT-OF-POCKET COSTS.
Modern highly tailored narrow network plans can offer more generous benefits made possible because of lower provider prices or lower provider-induced over utilization. This also makes such plans more attractive to low-wage workers and to those with significant illnesses.
REVIEW INCENTIVES AND SUBSIDIES.
Low wage workers are often more likely to forgo “wellness incentives,” which in
many instances will raise their health insurance premium costs. Therefore, employers should design wellness incentives to be simple and straightforward so that they are less likely to penalize low wage workers.
OFFER PLANS WITH ROBUST NAVIGATION SERVICES.
The U.S. health care system is difficult to navigate, and low-wage workers, especially those for whom English is not the first language, can benefit from assistance in obtaining timely and appropriate high-value health care.
CONTINUE TO PUSH.
Employers should continue to pressure health plans and providers for lower prices, because high
prices are the primary cause of excessive U.S. health care costs. The specific actions we
recommend can help assure that health care coverage meets the needs of low-wage workers and bolsters employers’ and other payers’ diligent efforts to control health care costs overall.
(Jeff Levin-Scherz is a senior director and co-leader of the North American Health Management practice at Willis Towers Watson. Steve Nyce is a senior economist and the director of the Research and Innovation Center at Willis Towers Watson.)