Tackle growing healthcare costs with earned wage access
It’s that time of year when we all learn that health care costs are going up (again).
As the nonprofit Business Group on Health reported, the average employee will be hit with $15,500 in out-of-pocket costs next year, and the average employer will pick up about two-thirds of that tab. Even with shared responsibility, those are big hits for both employer and worker, which is why health care strategy must be integral part of workforce management.
However, benefits managers may not be aware of a tool that may help keep health care costs down for both employers and workers, and which lets employees more fully participate in the economy they helped create.
Earned Wage Access (EWA), sometimes known as on-demand pay, is a revolutionary benefit that I wrote about back in May. It comes at no cost to employers, and is available to workers at little or even no cost, depending on the provider.
Earned Wage Access allows workers to access a portion of their earned wages that they have not yet been paid on. Depending on the provider, those wages can be immediately accessed on the provider’s payroll card, or just about any debit card.
What does on-demand pay have to do with health care?
When employees receive medical services, payment is often required up front. If employees only get their paycheck every two weeks, they may not have access to liquidity to pay for those services. The result is that an employee may be forced to delay a necessary visit or procedure, and if they are suffering from an acute condition, their health may be severely compromised.
However, with immediate access to the money employees have earned, but not yet been paid on, they have access to health care in the moment. Waiting rooms are bad enough. Waiting periods for basic health care are unnecessary and harmful.
There’s another reason why on-demand pay is critical to your health care strategy. There is a stealth health care crisis brewing in America. Millions have delayed preventative and necessary care due to the COVID-19 situation.
Every delayed preventative screening, test or check-up can result in a failure to discover a serious medical condition that requires treatment. That raises treatment costs down the line for both company health plan and employee.
By wrapping earned wage access into your health care strategy, you can encourage workers to utilize preventative and maintenance care at any time — not just on payday. Doing so also eliminates a common impediment: some people just don’t like to go to the doctor. If they have the excuse not to go, they’ll use it. EWA removes that psychological obstacle.
The same goes for access to medications. High cholesterol, high blood pressure, anxiety/depression, and many other chronic conditions require regular doses of prescribed drugs. Missing even a single day of some of these medications can significantly increase risk of adverse consequences in patients.
Earned wage access allows employees to refill medications when they need to. Waiting can be deadly. Some EWA providers even offer prescription discounts with their smartphone app.
Physicians encourage timely health care for obvious reasons. Employers should encourage it as well, not only out of concern for workers, but because timely health care can result in lower health care costs. However, it’s one thing to encourage timely health care visits. It’s another to offer timely pay to workers so they can meet that request. Earned wage access creates immediate health care access.
On-demand pay usually comes at no cost to employers. Some providers are already integrated with the largest payroll services, and others are integrated with dozens of them. The cost of earned wage access varies by provider, but certain ones offer the service at no cost for employees who use the provider’s payroll card. Other services have costs that are extremely low.
Adding earned wage access to your benefit plan will benefit your overall health care strategy, and your employees.