What to Do If Your Employer Health Insurance is Too Expensive

Jenifer Dorsey
December 16th, 2019 December 12th, 2019 |
Read time: 6 minutes

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For most, employer-provided health insurance is a welcome benefit and a relief, but what happens when your employer offers health insurance and you can’t afford it?

If you feel like your employer health insurance is too expensive, it could be because premiums and deductibles for group health insurance policies are on the rise.

The Kaiser Family Foundation’s 2018 Employer Health Benefits Survey showed that, on average, premiums increased over the past year as follows1:

  • +3% for single coverage
  • +5% for family coverage

Over the past year, on average, worker wages increased 2.6% and inflation increased 2.5%.2 However, the average health insurance annual deductible for covered workers has increased 53% over the past 5 years,3 leaving a lot of people wondering how to afford their employer’s high deductible health plan.

If that sounds familiar, you’re not alone.

According to Bloomberg, 39% of large employers only offer high-deductible plans (up from just 7% of employers in 2009)4, and half of all workers now have a health insurance deductible of at least $1,000 for an individual.5

So, what can you do if you feel like your employer health insurance coverage is too expensive and you’re not sure you can afford it in the year ahead?

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There are health benefits available to help with out-of-pocket medical expenses, including what you pay toward your major medical policy deductible as well as your coinsurance and copayment responsibilities.

Medical gap policies are a type of supplemental health insurance that pays a lump-sum benefit when you have a covered accident or critical illness.

You can choose from different coverage levels to accommodate your budget and needs. Plus, they are available any time of year—not just during open enrollment. Learn how medical gap policies work.

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Consider add-ons to health insurance

Prescription drugs and visits to the doctor’s office can result in both expected and unexpected out-of-pocket medical expenses throughout the year. There are supplemental non-insurance products that can help reduce the amount you pay.

Prescription drug discount cards provide discounts on certain prescription drugs—generic and brand name. Thousands of pharmacies accept them nationwide. You present the card when you pay for your prescription, and the associated discount is applied.

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Telemedicine provides 24/7 access to board-certified physicians for a few dollars per visit. This service is useful for diagnosis and treatment of non-critical conditions such as urinary tract infections, ear infections, allergies, cold and flu—the physician can even prescribe medications, if needed.

These virtual visits are available to you wherever you have connectivity; there is no network.

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These products are available year-round and are guaranteed issue, which means you can buy them whenever you want. Read more about add-ons to health insurance.

Open a health savings account (HSA)

A health savings account (HSA) allows you to save money pre-tax and use it later to pay for qualified medical expenses.6 HSA funds carry over from year to year, and some earn interest. You can even save the funds and use them when you retire.

What qualifies as a high-deductible health plan (HDHP) and the HSA contribution limit changes from year to year. For 2019, these amounts are as follows7:

Self-Only Coverage Family Coverage
HDHP $1,350 minimum deductible $2,700 minimum deductible
Contribution Limit $3,500 $7,000

You can only enroll in an HSA if you have an HSA-compatible high-deductible health insurance plan. The deductible alone is not an indicator of an HSA-compatible HDHP, rather the plan will be marketed as “HSA-compatible.”

If you’re not sure if your health insurance is HSA-compatible, you’ll want to contact your health insurance company to find out what type of policy you have. If you have questions about HSAs and taxes, you’ll want to consult with a tax professional.

Learn more about HSAs and how to find one.

Summary + next steps

With the cost of health insurance and out-of-pocket medical expenses rising for employees who have job-based coverage, you may be looking for ways to make healthcare more affordable in 2019.

Gap insurance, add-ons to health insurance and health savings accounts can be helpful ways to manage your out-of-pocket healthcare costs—you can choose one of these solutions or a combination.

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Originally Published On July 7th, 2017
Independence American Insurance Company and/or Madison National Life Insurance Company, Inc. may underwrite the products referenced on this website. Legal Disclaimers.


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