As baby boomers age out of the workforce, their Gen X children will look to offset expensive long-term care costs for their parents. Adding their parents to their employee benefit policies and using HSAs for services could be two solutions for young and middle-aged workers as this trend grows.
Healthcare costs for elderly parents, particularly for home healthcare and nursing facilities and continuing care retirement communities, will grow by 20.8% and 25.8%, respectively, over the next decade, according to new research from The Conference Board.
Due to these factors, services like HSA contributions, paid family leave, employee assistance program and vendor-based products will become increasingly necessary for workers caring for a sick or elderly parent, especially as healthcare costs continue to grow.
“There’s evidence of grandparents moving back in with their children while the working-age parents work. Why couldn’t older people be on the healthcare plans of their children?” asks Brian Anderson, associate program director at The Demand Institute and an author of “The Impact of Demographic Trends on U.S. Consumer Spending.”
Some workers can list their parent as an eligible dependent and use an HSA to cover medical expenses, including long-term care insurance, says L. Stephen Bowers, an attorney with law firm Cozen O’Connor. However, workers who use their HSA on non-dependents can bear substantial tax penalties.
Retirees are expected to use their savings, entitlement benefits like Medicare and voluntary benefits to fund any medical expenses. With the rising cost of care, even for out-of-pocket expenses, their children might need to contribute.
“I think it just adds emphasis on why people should be encouraged to build up savings (hopefully in an HSA) in order to afford the inevitably rising cost of healthcare in their senior years,” says Kevin Robertson, senior vice president, director of sales at HSA Bank, a health savings account administrator based in Wisconsin.
Those costs tend to jump at retirement age.
Employees between the ages of 45 and 64 pay about $9,500 annually in healthcare costs, but that number jumps to nearly $17,000 after age 65. If workers make it to age 85, that annual cost doubles to $32,411, according to 2012 data, the latest available data from the Centers for Medicare and Medicaid Services.
To offset these costs, some employers offer HSA contributions or matches, similar to a 401(k), as well as family leave if employees need to care for an ailing parent.
Flexible scheduling can also make a huge difference to employees looking to find care for their parents.
“It’s extremely stressful,” says Diane Menio, executive director of Center for Advocacy for the Rights and Interests of the Elderly. “You’re adding lots of hours onto your day to do what you need to do to support the older person.”
Benefit professionals can add certain products to their plan design to alleviate the emotional burden employees might feel during that process.
Premier Elder Solutions and BookMD are two benefit solutions that come to mind for Jeff Oldham, an executive at Benefitfocus, a Charleston-based technology company that provides a cloud-based benefits management platform.
The former, “an electronic vault” for family members to store information and conversations about an ailing parent, for example, helps maintain the continuity of care. The latter, BookMD, uses claims data to determine if a parent missed a doctor’s visit and can book an appointment on the spot – plus send an Uber to bring the patient to and from the office.
Both benefits are concierge services that remove the onus from workers.
Similarly, Benefitfocus offers a solution that identifies pharmacy claims data and looks for therapeutic alternative, or a lower-cost option, for the patient.
“It is smarter Rx,” says Oldham, senior vice president of employer sales and the Benefitstore.
While vendors can make the transition of care easier, employers should also promote their employee assistance program to help with strategizing care and coping.
“Many large employers do have employee assistance programs that do provide eldercare consultations,” says Menio. “Those programs are extremely helpful, because they can help direct them to get the support they need. Some employers also sponsor seminars or workshops on some of the issues in the workplace. Employees want to learn how to support their parents.”
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