The High Cost of Uninsured Employees

When employees forego insurance, they’re playing financial roulette and impacting their health. Are you at risk, too?

Employer-sponsored medical insurance is the backbone of the U.S. health insurance system—and a critical aspect of an employer’s attraction, retention, and well-being strategies—but high premiums and deductibles can deter many employees from choosing employer healthcare benefits (or any health coverage at all). Statistically, younger individuals, employees with low wages, and people who need family coverage are rolling the dice and going without health insurance.

The rate of uninsured people under the age of 65 is at an unprecedented low of 8.3%, but that is attributed to the temporary Medicaid enrollment and eligibility rule changes that were put in place during the pandemic. The keyword is temporary. Medicaid changes ended in May 2023 with the end of the federal Public Health Emergency. By 2033, the share of people who will be uninsured is projected to be over 10%, and care costs are forecasted to increase by an average of 5% every year—outpacing wage increases for many employees. Many individuals may be forced to make a critical decision between securing their income or safeguarding their health.

They’re cutting costs and avoiding care

The average annual contribution for family medical coverage through an employer can exceed $5,000. That number can feel impossible to certain employees—and that’s not including deductibles, copays, or other out-of-pocket expenses when care is required.

One unexpected trip to the emergency room could send a family spiraling into a world of medical debt and financial chaos—a tightrope without a safety net. Aside from the potential for financial ruin, uninsured employees are more likely to delay or avoid seeing a doctor, increasing the likelihood of needing expensive care down the road.

There’s a cost to employers, too

When uninsured individuals opt to enroll in healthcare coverage (particularly family coverage), it can have financial consequences for employer-sponsored plans. This is because the cost of covering children is usually about half as much as covering an employee, while the cost of covering spouses is nearly 30% higher than the cost of covering an employee. Helping uninsured members explore all available insurance options that best suit their needs can be beneficial for both the employer and the employee financially.

Individuals with personal or family health issues can also indirectly cost employers. When employees take more time away from the job to attend to unforeseen and likely urgent medical issues, it puts tremendous stress on your business.

Your organization may experience a decrease in productivity due to missed deadlines, an accumulation of tasks, and overwhelmed employees. The latter directly impacts your company culture, which can be difficult to recover.

Redefine what it means to provide benefits

Offering health insurance means more than just offering your group plans during open enrollment—it means you understand the varying needs of your workforce and are well-positioned to educate them about the options that satisfy those needs. Here are three ways you can help your employees struggling to afford health coverage:

• Explain your offerings in simple terms: Help your employees make informed choices by clearly explaining the differences in cost between your medical plans, and not just payroll contributions but the related out-of-pocket costs, too. And for the youngest members of your workforce, help them understand how employer-provided coverage works.
• Offer guidance outside the group plan: Prior to 2023, many family members were unable to qualify for Marketplace coverage financial assistance due to a federal affordability rule nicknamed the Family Glitch. That rule has recently been reshaped to help millions become eligible for Marketplace premium subsidies. You are a critical link to ensuring your people are aware of those options by providing information, resources, and advocacy that guide them toward a meaningful choice.
• Explore onsite primary care or near-site centers in the community for direct impact: Many employers are turning to on-site or near-site clinics to provide easy access to affordable primary care at rates that are typically embedded in plans. For your people, that means no-cost or low-cost treatments; convenient locations for care, labs, and pharmacies; same-day appointments; and personal care and attention. For your company, that means decreased absenteeism; increased productivity; lower costs of provided benefits; a valuable recruitment and retention tool; and a decreased risk of ER for non-urgent care—just necessary care for your people at a cost they can afford.
  
  

The Future of Employer-Sponsored Health Insurance

The future of employer-sponsored health insurance is changing, but it isn’t fading. In fact, many employers are using this turbulent time to better position themselves in their industry. By exploring innovative strategies to help your people navigate crucial healthcare choices, you enhance your capacity to both attract and retain top talent, establish yourself as an employer of choice, and foster a workforce that is not only happier, but healthier overall.

Alliant Individual Health Solutions

Alliant offers clients Alliant Individual Health Solutions (AIHS), a program that ensures integrated access to individual healthcare alongside employer group health plans. AIHS is staffed by licensed insurance agents who are positioned to help employees and dependents navigate their options within available state and federal subsidies. AIHS works with your broader health, productivity, and retention strategy by connecting your employees and their dependents to affordable coverage, whether they are ineligible or unable to afford your sponsored plan.

Alliant Employer Health Centers

Advanced primary care solutions are an innovative way to bring whole-person, integrated, accessible, and equitable healthcare directly to employees, creating a healthier workforce and reducing the total cost of care. Alliant’s team of physicians, nurses, dieticians, actuaries, and data analysts—as well as experts in public health, pharmacy, Worker’s Compensation, absence and disability, behavioral health, and compliance—helps employers scope, plan, and implement a customized strategy considering on-site, near-site, retail, home, mobile, virtual, and marketplace care.