Employee Benefits Trends In Education Industry

Educators Have Made a Dramatic Shift to Consumer-Driven Health Care, Data Shows

The times, they certainly are a-changin' in employee benefits.

As health care costs have continued to rise, employers have increasingly turned to high-deductible health plans (HDHPs) to help reduce excess utilization and control spending. The shift to consumer-driven health care has been swift and, as we're beginning to see, universal among large organizations, especially. 

According to Benefitfocus' State of Employee Benefits 2018 Industry Edition, based on actual benefits enrollment data from large employers using the BENEFITFOCUS® Platform, HDHPs have become ubiquitous even in education—an industry known historically for its generous health insurance benefits. And it's happened fast.

Back in 2016, traditional health plans like PPOs and HMOs represented an overwhelming majority of health plan offerings and elections among employers in the education industry. But just two short years later, things look completely different, with HDHPs making remarkable gains in popularity.

Half of employers in the education industry now offer an HDHP.

The share of education institutions offering at least one HDHP has more than doubled since 2016—from 23 percent to 50 percent. Granted, that rate remains well below average (70 percent of employers across all industries on the Benefitfocus Platform offer an HDHP), but education is quickly catching up.

Education employers are steering workers to HDHPs.

In education, the average employee premium contribution for a family-coverage HDHP has been cut in half since 2016. During that time, employers have gone from paying 67 percent of the total premium to paying 87 percent of the total premium. These employers have also more than doubled their contributions to employees’ health savings accounts (HSAs) over the past two years.

Meanwhile, it appears that employers in education are trying to make traditional health plans less attractive to employees. For example, they’ve upped the average annual deductible for a family-coverage PPO plan from $1,400 in 2016 to over $2,500 in 2018—an increase of approximately 80 percent.

Employees in education now favor HDHPs over traditional health plans.

The efforts that employers in education have recently made around HDHPs seem to be working well. When given the choice between an HDHP and a traditional health plan, 34 percent of employees selected an HDHP for 2018. That’s up from just 20 percent two years ago. Moreover, HDHPs now have a higher election rate than both PPOs and HMOs.

HMOs have experienced essentially the inverse of what’s happened with HDHPs in the education industry. Since 2016, HMOs have gone from making up 44 percent of employee elections to a mere 21 percent.

See additional industry-specific benefit trends in the full State of Employee Benefits 2018 Industry Edition.