How to help employees plan for and manage large medical bills

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Whether the result of an unexpected illness or injury; out-of-network care; a high-cost medical procedure like joint replacement or organ transplant; or a costly medical expense such as labor and delivery, large medical bills not only affect employees’ financial wellbeing, they can also impact their health and job performance.

The stress caused by high bills and medical debt can increase employees’ risk of a range of physical and mental health problems, including heart disease, diabetes, migraine headaches, a weakened immune system, anxiety and depression.

In addition, the productivity of employees who are worried about the financial impact of large, unpaid medical bills can drop. A survey conducted by Salary Finance found that 24% of employees with financial worries have problems in their relationships with co-workers, while 22% have trouble completing their work, which results in costs equivalent to 11% to 14% of business expenses.

How employers can help

There is no single tactic that employers can deploy that will help all employees who are struggling with large medical bills. What’s needed is a comprehensive strategy and set of tools and resources so that employees have access to the solutions that can be tailored to address their specific situation.

These are some of the key pieces of that toolkit:

  • Educate employees. In some cases, especially those that involve large bills related to care received out of network, pre-emptive steps to make sure employees fully understand how their health benefits work can lower the likelihood that they will end up with unmanageable medical bills. This educational effort should not be a once a year event. The HR or benefits team should provide ongoing communication about key benefits topics such as any requirements for preauthorization or precertification and how to find out if a provider is part of the health plan network. The communications can come in a variety of forms including emails; blog posts on the company intranet or articles in the company newsletter; in-person meetings; and online tutorials or webcasts.
  • Encourage employees to use health savings accounts and reimbursement arrangements. Help employees understand the value of participating in an HSA or HRA by making clear that not only will they have money set aside to help pay large medical bills, they’ll also get a tax benefit from putting money into these accounts. Employers can also aid employees by making annual or per paycheck contributions to these accounts on the employees’ behalf.
  • Consider specialty pharmacy services. To lower the cost that employees pay for expensive medications like cancer biologics and hepatitis C treatments, employers can provide access to a specialty pharmacy benefit. Specialty pharmacies can help ensure that employees receive medications like infusions in the most appropriate, cost-effective and safe setting (doctor’s office versus hospital, for example). They can also ensure that prescribed medications are the most appropriate choice, not simply the newest available, and frequently significantly more costly drug.
  • Offer the services of a medical billing advocate. An advocate can do several things for employees with large or unexpected medical bills. First, the advocate will carefully review all bills to check that there are no errors or upcoding and that all services that should have been covered by insurance were covered at the correct reimbursement rate. The advocate also checks to make sure that there was no inappropriate balance billing of the employee. Once that comprehensive review is complete, the advocate will negotiate with the healthcare providers on the employee’s behalf, working to lower the overall amount due.

One additional hurdle that employers may need to overcome to help employees who are faced with significant medical debt is employees’ reticence to share their situation. Some may have privacy concerns about sharing financial information with an employer. Others may fear that their financial situation may cause employers to think that they are not good planners, managers or decision makers, which could endanger their position or future advancement within the organization. Still others may simply be embarrassed by their financial difficulties.

To encourage employees to take advantage of the resources offered, employers should ensure there are robust privacy safeguards in place and that there are multiple avenues through which employees can access these resources. For example, if they are not comfortable approaching an HR team member about the topic, there should be a secure, online way to access the resources or a hotline they can call.

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