When is a benefit no longer a benefit?

As a former airline employee, I fondly recall the days when the envy of my friends was fueled by the coveted perk of free flights. It was indeed a fantastic benefit that allowed me to whisk my family away on spontaneous getaways. However, the landscape of the airline industry underwent a transformative shift with the advent of low-cost carriers and increased price transparency facilitated by the internet. The result? The era of truly "free flights" for employees began to fade away.

While the benefit itself remained intact, the ability to use it became increasingly challenging. Ticket prices feel unpredictably, and the airplanes filled up as never before. As employees, we were confined to available empty seats, which were now very limited. The phrase "The non-benefit, benefit" was born – we still had the theoretical advantage of free flights, but practically, utilizing this perk became a formidable task.

This brings me to a broader question applicable to employers across various industries: are you offering benefits that your employees can't effectively use? A prime example is the High Deductible Health Plan (HDHP), a once-attractive option due to lower premiums and catastrophic coverage. However, for low-wage employees, the financial strain posed by high deductibles can make accessing necessary medical care a significant challenge.

As healthcare costs outpaced earnings, the question emerged – is the HDHP still a genuine benefit for low-wage employees? It might be time for employers to reconsider their offerings and explore alternatives. Enter Limited Medical Plans, an imperfect yet potentially more practical solution.

Limited Medical Plans are designed to cover approximately 90% of what an average healthy person would require in a year. Unlike HDHPs, these plans come without deductibles and offer low copays for services such as office visits, urgent care, and hospital stays. The coverage is, however, capped, and once the maximum benefit is reached in a particular category, the employee is responsible for any additional costs – think of it as a reverse deductible.

In conclusion, while HDHPs can be a cost-effective way for employers to save on health premiums, the landscape is changing. Limited Medical Plans can be offered as stand alone coverage or offered as a option to other medical plans. LMP’s may better cater to the needs of low-wage employees, providing them with coverage that is not only affordable but also usable. The evolution of employee benefits calls for a proactive approach, ensuring that the benefits offered align with the changing needs and challenges faced by the workforce.

Limited Medicals Plans (LMP) are new and not available in all states. Some states require a minimum number of employees to offer such plans.