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How HR Can Help Employees Manage Rising Health Costs
How HR Can Help Employees Manage Rising Health Costs

Health care costs and inflation are rising. How do employers balance prioritizing savings for the business and easing the cost to employees?

Cam Garriepy avatar
Written by Cam Garriepy
Updated over a week ago

The Problem:

According to BenefitsPro, employers expect medical plan costs to increase by as much as 7.5% in 2023. With health care costs and inflation outpacing wage increases, many employers are struggling with passing those rising plan costs along to their teams.

It’s critical that employers provide comprehensive health care plans, especially in a competitive labor market. At the same time, health plan costs are skyrocketing. How do employers balance prioritizing savings for the business and easing the cost to employees?

The Solution: Consumer-Driven Health Care:

Consumer-driven health care plans (CDHPs) are high-deductible health plans paired with a Health Savings Account (HSA) – a valuable tax-advantaged account used to cover variable health care expenses. Employees pay higher annual deductibles for medical expenses, but the premiums are significantly less than traditional health plans.

CDHPs have great potential for alleviating health care costs for many companies and employees. The challenge many employers face is convincing employees to make the switch to a new and potentially complicated health plan. How do you inspire employee confidence in adopting a CDHP?

The Strategy:

  • Encourage active participation: To take full advantage of the financial benefits of CDHPs, employees must become active health consumers.

  • Offer cost analysis: A plan with increased out-of-pocket spending instead of lower deductibles can make employees feel as if employers are shifting the cost burden onto them. Without cost-analysis, they may resist adopting a CDHP.

  • Provide HSA education: Many employees enrolled in CDHPs don’t understand the serious financial advantages of the HSA:

    • Tax advantages: triple tax exemption. Money is not taxed upon deposit, withdrawal, or growth from investment.

    • Accrual benefit: rollover. HSAs follow employees even when they change employers.

    • Growth benefit: HSAs can be invested.

    • Retirement benefit: Starting at the age of 65, HSAs can be used to pay for nonmedical expenses without penalty.

For CDHPs to be successfully implemented, employees must be provided with greater guidance based on an understanding of their total financial picture, life stage, and goals, but how?

Success Acceleration

SelectSmart™ is a decision support tool that helps employees make personalized benefits choices. SelectSmart transforms complex enrollment choices into straightforward, personalized recommendations by asking simple questions and analyzing all available choices and funding levels from health to retirement funding levels. This detailed guidance and education not only helps employees confidently make better health care and financial decisions, it also benefits companies by setting employees up for better health and satisfaction, which means happier, more productive employees

We believe the best way to help employees feel more empowered and happier about their health and wealth is to help them make better decisions today.

Interested in learning more? Click here to schedule a 15 minute chat now to discuss how SelectSmart might work for you. Or simply call us at 781-583-7017 or email us at

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