Request a call Login

  • As a company grows, so do the needs of its employees. Offering competitive and comprehensive employee benefits is crucial for attracting and retaining top talent. However, navigating the complexities of employee benefits can be challenging, especially as your company expands. Continue reading to explore the key considerations and strategies for effectively managing employee benefits as your company grows.

    Understanding The Importance Of Employee Benefits

    Employee benefits play a significant role in the overall satisfaction and well-being of your workforce. They contribute to employee retention and loyalty and impact recruitment efforts. 78% of employees say they would stay with a company because they like the benefits. As your company scales, the need for robust employee benefits becomes more significant, making it essential to understand the importance of offering a compelling benefits package.

    Tailor Benefits To Meet Diverse Needs

    Understanding your employees’ diverse needs is fundamental to tailoring an effective benefits package. Conducting surveys or holding focus group discussions can provide valuable insights into your employees’ specific needs and preferences.

    In addition, consider customizing benefits to cater to different demographics within your workforce. This may include offering flexible work arrangements, wellness programs, or personalized health care options to accommodate varying lifestyles and preferences.

    Navigate Legal And Compliance Considerations

    It’s also crucial to stay on top of evolving labor laws and regulations related to employee benefits. Compliance with local, state, and federal laws is essential to avoid potential issues. Consult legal and HR professionals to ensure your benefits offerings comply with relevant regulations. This can help mitigate legal risks and ensure your benefits programs adhere to industry standards.

    Evaluate Cost-Effective Benefits Solutions

    Growing companies often face budgetary constraints. It’s important to conduct a thorough cost analysis to assess the financial implications of expanding or modifying employee benefit programs. Research and explore cost-effective benefit solutions such as group insurance plans, retirement savings programs, or employee assistance programs. Evaluating multiple options can help identify affordable yet impactful benefits for your employees.

    Communicate Benefits Effectively

    Clear and transparent communication about employee benefits is essential, especially during growth and change. Develop effective communication strategies to ensure employees understand the full scope of their benefits. In addition, provide educational resources and workshops to help employees make informed decisions about their benefits. This can enhance appreciation for the benefits offered and maximize their utilization.

    Leverage Technology For Benefits Administration

    Now, it’s essential to implement HR software that streamlines benefit administration processes. This can simplify enrollment, tracking, and employee benefits management, improving overall efficiency. Providing employees with self-service tools for benefits management can enhance their experience and reduce administrative burdens on HR personnel.

    Partner With A PEO

    Consider finding support from HR professionals such as a professional employer organization (PEO) who are there to help create a competitive benefits package for your business needs. While growth is great, you no longer have the time to manage everything on your own. Partnering with a PEO like GMS is the light at the end of the tunnel. GMS does more than simply offer coverage like a health insurance company. We provide our clients with various tools and resources to find a coverage solution tailored to their needs. Common benefits options we provide business owners include:

    By embracing the support of a PEO and incorporating sought-after benefits, small business owners can attract and retain top talent, foster a positive workplace culture, and ultimately drive the growth and success of their organizations. Contact us today to explore how we can help you navigate employee benefits for your growing business.

  • On March 11, 2024, the U.S. Department of Labor’s (DOL) new rule for determining whether an employee is an independent contractor is scheduled to take effect. Health care and trucking industries that are heavily reliant on independent contractors are likely to experience disruptions in the labor supply and an increase in wages. Let’s dive into this to determine the implications this might have for small business owners.

    Understanding The New Rule

    The new rule reinstates an earlier standard that requires companies to collectively consider various economic factors to determine a worker’s classification as a W-2 employee or an independent contractor using a 1099 form. This shift rescinds the 2021 ruling, which placed greater emphasis on two factors:

    • Control over the work 
    • Opportunity for profit or loss

    The totality-of-the-circumstances analysis now incorporates the worker’s skill and initiative, the permanence of the working relationship, the worker’s investment in equipment or materials, and the extent to which the service rendered is integral to the employer’s business.

    Impact On The Health Care Industry

    The implications of the new rule on the health care industry are multifaceted, particularly for nurses and home health aides who commonly work for multiple staffing agencies. The independent contractor status has been a longstanding issue in this sector, and the new rule is expected to prompt staffing agencies and health care facilities to reassess their utilization of the 1099 model. In addition, the shortage of nurses and home health aides adds another layer of implications for this industry. This was caused by the early retirements during the COVID-19 pandemic and the increasing medical needs of Baby Boomers, further intensifying the urgency for employers to address labor classification and retention challenges. Approximately 100,000 registered nurses in the U.S. left the workplace due to the stresses of the COVID-19 pandemic. By 2027, almost 900,000, or almost one-fifth of 4.5 million registered nurses in the U.S., intend to leave the workforce.

    Impact On The Trucking Industry

    Similarly, the trucking industry anticipates significant repercussions from the new rule. The classification of truckers as independent contractors, a prevalent practice in the industry, may require a fundamental restructuring of the business model should they be reclassified as employees.

    For trucking companies, the prospect of reclassifying truckers as employees presents logistical and financial complexities. With many drivers renting trucks from the companies they deliver goods for, distinguishing between an independent contractor and employee status becomes critical. The ownership and usage of the vehicle, along with considerations of investment and opportunity for profit or loss, are central to the classification under the new rule.

    Economic Implications

    The potential reclassification of health care and trucking workers has far-reaching economic implications. Notably, the new rule is anticipated to escalate labor costs for companies, which could subsequently be passed on to consumers. In addition, if reclassified as employees, the impact on overtime pay for truckers is poised to become a significant issue given the industry’s long working hours and the entitlement to overtime pay for nonexempt workers. Under the Fair Labor Standards Act (FLSA), nonexempt employees are entitled to overtime pay, but independent contractors are not.

    The Assistance Of A PEO

    Amidst the evolving regulatory landscape and the DOL’s new rule for determining worker classification in industries such as health care and trucking, small business owners can seek support and guidance from a professional employer organization (PEO) like GMS. Partnering with GMS gives small business owners access to expert HR support, risk mitigation, compliance expertise, and talent management services, enabling them to navigate this new rule’s complex implications. In addition, GMS offers payroll and tax filing, benefits administration, compliance support, risk and safety management, and HR services, allowing business owners to focus on their core competencies. If you have a business in one of these industries, partnering with GMS is a crucial resource for you, ultimately offering you peace of mind and strategic support with evolving rules and regulations. We work with many health care and trucking companies to ensure they remain compliant and feel supported during these times of uncertainty. Interested in learning more? Contact us today to learn more.

  • Stepping into adulthood comes with a game-changing moment – hitting the big 26 and waving goodbye to the safety net of your parent’s health insurance. It’s like unlocking a new level of independence but navigating the health care landscape can feel like a rollercoaster ride. This transition isn’t just about paperwork and getting the proper coverage; it’s a real-life journey into adulting. Picture this blog as your guide, unraveling the ins and outs of claiming your own health coverage. It’s going to feel like a breeze when you approach the 26th year of your life.

    Understanding The Transition

    Young adults lose coverage from their parents’ plans because of the Affordable Care Act (ACA), which only requires companies to cover dependents on a parent’s plan until they turn 26. Before the ACA, insurance companies dropped young adults from their parent’s policies after they reached a certain age or stopped attending college. This resulted in many young adults losing their insurance earlier in life. Now, with the ACA, adults 26 years and under can stay on their parent’s plan even if they:

    • Have started or finished school
    • Are no longer a dependent
    • Are married
    • Adopt or have a child
    • Turn down group health insurance through work 

    What this means is that when you turn 26, you’ll need to find alternative coverage to ensure you’re protected in case of illness or injury. Understanding the options available to you is crucial as you embark on this new phase of your life.

    Exploring Your Health Care Options

    It’s essential to understand you have various options when choosing health care options. Let’s take a look at your options:

    Employer-sponsored plans: If employed, your company may offer health insurance benefits. It’s essential to familiarize yourself with the coverage options and enrollment periods provided by your employer.

    Health insurance marketplace: You can explore plans through the Health Insurance Market, where you may be eligible for subsidies based on your income. A subsidy is a benefit given to an individual, business, or institution, usually by the government. It can be direct (cash payments) or indirect (tax breaks). It’s typically given to remove some burden and is often considered in the public’s overall interest, given to promote a social good or an economic policy.

    COBRA coverage: You may qualify for the Consolidated Omnibus Budget Reconciliation Act (COBRA) for a temporary extension of your parents’ plan, although it can be costly. This coverage gives workers, and their families who lost their health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods of time under certain circumstances, such as voluntary or involuntary job loss.

    Medicaid: Depending on your income, you may qualify for Medicaid, which provides low-cost or free health care coverage. In all states, Medicaid provides coverage for some low-income individuals, families and children, pregnant women, the elderly, and those with disabilities.

    Transitioning off your parents’ health plan can pose several challenges, such as understanding insurance jargon, comparing different plans, and budgeting for health care expenses. It’s normal to feel overwhelmed, but there are resources available to guide you through this process. The following are a few resources available to you:

    Financial Considerations

    • Budgeting for premiums: Evaluate the cost of premiums for different plans and consider how they fit into your monthly budget. For a healthy 26-year-old, the average cost of a marketplace plan is $372 per month.
    • Out-of-pocket expenses: Understand the potential out-of-pocket costs for deductibles, copayments, and coinsurance when comparing plans.
    • Health savings accounts (HSAs): If eligible, consider opening an HSA to save for medical expenses with pre-tax dollars. An HSA is a type of savings account that lets individuals set aside money on a pre-tax basis to pay for qualified medical expenses.

    In addition, it’s essential to understand the plan coverage:

    • Network providers: Check if your preferred doctors and health care facilities are included in the plan’s network to ensure continuity of care.
    • Prescription drugs: Assess how different plans cover the cost of prescription medications you may currently use or anticipate needing in the future.

    What Next?

    If 26 is just around the corner, you must start thinking about this process. Being able to compare your options allows you to get the best coverage for the best price as opposed to waiting until the last minute and rushing this decision. If your employer offers health insurance, you’re in luck. Your colleagues should be able to offer you advice, and if you’re lucky, your company might have a designated benefits specialist who can walk you through the entire process. If your employer doesn’t offer health insurance, the process will be longer, and you’ll have to make decisions on your own.

    For employers, have you considered partnering with a professional employer organization (PEO) like GMS? As your employees transition to their independent health care coverage, it’s essential you provide them with the tools and resources to make the right choice. When you partner with GMS, we provide access to comprehensive group health plans, leveraging our buying power to offer competitive rates and quality insurance. In addition, our Benefits Account Managers work with you and your employees to guide them through the enrollment process. We will also simplify complex paperwork, ensure compliance with regulations, and get the coverage your employees want and need. Contact our benefits experts today to ensure a seamless process for employees during this transitional period.

  • As we enter the new year, Pennsylvania and New Jersey residents should prepare for changes in health care regulations. This 2024 legislative lineup promises new improvements ranging from coverage for donor breast milk to prescription-free hormonal birth control. The following is what you should anticipate from these pivotal new laws.

    Pennsylvania’s Owen’s Law

    Pennsylvania’s Owen’s Law underscores the benefits of breast milk over formula, particularly for newborns battling severe health conditions. Under this new law, Medicaid will now cover the cost of screened, pasteurized breast milk for mothers who are unable to meet the demand themselves, helping the fight against newborn malnutrition and gastrointestinal issues. Taking effect around January 20th, 2024, Medicaid coverage applies when breast milk is essential for infants with certain serious conditions. Most of this milk is given to newborns in hospital neonatal intensive care units, and some are sold in outpatient settings but can cost as much as $4 per ounce.

    Patients’ Rights In Pennsylvania

    Another Pennsylvania law safeguarding patients’ rights requires health care providers to receive both verbal and written consent before performing pelvic, rectal, or prostate examinations on anesthetized or sedated patients. This addition to the state’s Medical Care Availability and Reduction of Error Act promotes autonomy by ensuring that patients are informed and gave consent to such procedures. This does not apply in cases of emergencies when exams are necessary for providers to reach a diagnosis or provide treatment.

    Detecting Illicit Substances In Pennsylvania

    A new law requires health providers in Pennsylvania to test patients for xylazine and fentanyl, drugs frequently implicated in overdose deaths across the state. In addition, hospitals must now provide patients with educational materials and resources about the risks posed by these substances. Coupled with state-wide reporting of positive tests, these changes offer a dual approach to curbing drug addiction: data-driven intervention strategies and targeted patient education.

    New Jersey’s Road To Accessible Contraception

    Meanwhile, in the neighboring state of New Jersey, the contraception landscape is being transformed. An unprecedented law passed in 2023 now enables pharmacists to dispense hormonal birth control without a prescription. This radically increases accessibility for those seeking contraceptives.

    Capping Essential Medicine Prices In New Jersey

    A critical move for residents with certain health plans, New Jersey Governor Phil Murphy has introduced price caps for essential medications, including EpiPens, insulin, and asthma inhalers. With these cost-control measures, out-of-pocket expenses will be significantly lowered. Patients will only have to cover capped costs of $35, $25, and $50, respectively, for these essential medications, offering relief for individuals managing these chronic conditions.

    How PEOs Help Navigate These New Health Care Laws

    Due to these groundbreaking new laws, 2024 signifies an exciting new chapter for health care in Pennsylvania and New Jersey. The changing landscape of health care laws in these states presents challenges and business opportunities. Partnering with a professional employer organization (PEO) like GMS stands as a proactive solution. By leveraging the expertise of a PEO, business owners can navigate the complexities of these new regulations, gain access to comprehensive health care options, and streamline HR operations. This partnership with GMS ensures compliance and fosters a thriving and resilient workforce, ultimately paving the way for sustainable growth in this evolving health care landscape. So, as the new year unfolds, let us keep an eye on how these laws shape the health care landscape in your state so you can focus on growing your business. Contact us today to learn more.

  • Health care costs in the United States have been steadily climbing, and the burden on employers providing health care benefits for their workforce is intensifying year by year. A recent report by Aon forecasts a looming challenge: average costs for employers covering their employees’ health care are projected to surge by 8.5% in 2024, amounting to over $15,000 per employee. This steep rise marks a concerning trend, nearly doubling the previous year’s increase of 4.5%, setting off alarm bells for companies navigating their health care budgets.

    Driving Factors Behind Escalating Costs

    Let’s take a look at three pivotal elements that are steering this surge in health care expenses.

    Inflation: The silent aggressor

    Inflation, accounting for roughly half of the cost hikes, substantially impacts health care expenses. The health care sector experiences a delayed effect due to multi-year provider contracts. Renewals in these contracts are causing providers to demand higher fees, thereby stretching the impact of inflation over several years.

    COVID-19’s lingering impact

    The aftermath of the pandemic continues to cast a shadow over health care costs. Medical utilization, which plummeted during the peak of the pandemic, is now reverting to pre-COVID levels. This resurgence in medical usage is a driving force behind the escalating health care expenditures for employers.

    Surging prescription drug costs

    Prescription drug expenses are spiraling at an alarming rate, surpassing the growth rate of medical costs. The use of specialty drugs such as GLP-1 and medications initially designed for diabetes, which are now being utilized for weight loss, have doubled between 2022 and 2023.

    Navigating The Way Forward

    The tight labor market continues to discourage passing higher health care expenses onto workers. However, future projections indicate an inevitable shift towards significant changes in employee contribution as employers prepare for 2025. Employers are creating strategies to manage costs, including targeted plan adjustments to address expensive medications and treatments. In addition, a shift in vendors is anticipated to secure better prices and discounts on health care services. The focus on mental health services is also expected to intensify, acknowledging the importance of employee well-being.

    How PEOs Are Revolutionizing Employee Benefits

    In the face of these health care cost escalations, employers find themselves at a critical stage where innovative solutions are imperative. The strain of balancing employee well-being with financial sustainability requires a strategic approach. This makes the role of Group Management Services, a certified professional employer organization (CPEO), crucial. GMS extends a lifeline to businesses, offering access to various benefits through our master health care plan (MHP). Through pooled resources, negotiated rates, and streamlined administration, GMS enables companies to combat increasing health care expenses effectively. By leveraging GMS’ buying power and expertise, businesses can navigate these unprecedented times and provide quality health care benefits to their employees while maintaining a competitive edge in the marketplace. Get a quote from us today and end the open enrollment period on a high note.

  • Let’s be honest: Managing health care can be challenging and expensive for your business. You might think about putting it on the back burner, but with health care costs consistently rising, you can’t afford to wait. In addition to a fair paycheck, your employees expect competitive benefits to take care of themselves and their families. Understanding what your employees want and need is a big part of managing health care successfully, but the complexity lies in ensuring compliance.

    Navigating health care can be a challenging endeavor, especially for small businesses. It involves grappling with ethical considerations and data privacy concerns, making compliance a growing challenge. In this context, non-compliance could result in substantial fines and potentially lead to legal ramifications, a scenario you want to avoid.

    Partnering with a professional employer organization (PEO) like GMS can be a great option to alleviate some stress. GMS offers an excellent solution for obtaining comprehensive health care coverage for your team while maintaining compliance. However, if you are determined to handle health coverage independently, there are essential things to consider.

    Health Care Compliance

    Under the Affordable Care Act (ACA) guidelines, businesses with 50 or more full-time employees or the equivalent in full-time equivalents (FTEs) must provide health insurance coverage. In addition, you must provide this coverage to all eligible employees within a maximum waiting period of 90 days. Failure to comply can lead you and your business to face hefty penalties.

    You’ll also need to provide employees with a comprehensive Summary of Benefits and Coverage (SBC). The primary objective of the SBC is to offer a clear and detailed explanation of what the health plan encompasses, as well as the associated costs. This empowers your team to make well-informed decisions concerning their health care choices.

    Suppose your business fails to meet these requirements, and one or more of your full-time employees receive premium tax credits or other government assistance to purchase coverage on the Health Insurance Marketplace. In that case, you may be subject to the Employer Shared Responsibility Payment (ESRP). This payment is a financial penalty imposed on the company to ensure large employers play their part. The ESRP ensures that large employers provide access to affordable health care coverage for their employees and prevents them from shifting the cost of health care coverage to government-subsidized programs.

    • Note: Businesses with less than 50 full-time or FTEs are not subject to ESRP.

    Compliance For Small Businesses

    You may be thinking health care compliance doesn’t apply to smaller businesses. While it’s true that you’re not obligated to offer health insurance, it shouldn’t be overlooked as it can be a valuable tool in recruitment and retention efforts. If you decide to provide health insurance for your staff, it’s crucial to customize your coverage to match your team’s specific needs while ensuring compliance with the regulations and protections outlined in the Americans with Disabilities Act (ADA). A general framework for achieving this is outlined below:

    1. Use anonymous surveys. Seek input from your team regarding their health care needs and preferences by using anonymous surveys. Anonymity can help ensure that individuals feel comfortable providing honest and open feedback without fear of potential discrimination.

    • Focus on health care needs. Frame your questions to inquire about specific health care needs and preferences rather than individual health conditions. For example, you might ask your employees about preferred types of coverage, particular services they value, or what aspects of their current plan they find beneficial or lacking.
    • Avoid discrimination. Be careful not to ask questions that directly or indirectly solicit information about an employee’s medical condition or disability. Questions about medical histories, specific conditions, or disabilities are inappropriate and can violate the ADA.
    • Consult legal or HR experts. If you have doubts about the legality or sensitivity of your survey questions, consider consulting legal experts or human resource professionals who are well-versed in ADA and ACA compliance. They can help you craft surveys that are both effective and legally sound.

    2. Educate your team. Ensure your employees know their responses will remain confidential and used solely to improve the company’s health care offerings. This can help build trust and encourage participation. 

    3. Review and adjust coverage. After collecting anonymous feedback, use the information to assess your current health care coverage and identify potential areas for improvement. Seek out insurance plans that align with the stated needs of your employees. 

    Traditionally, small-group insurance has been a primary option for small businesses providing benefits to their team. However, several other options may be suitable for your business, including self-funded, level-funded, and health reimbursement arrangements (HRAs).

    Supplemental Insurance

    To attract and retain top talent, every business owner should understand the importance of providing a comprehensive benefits package. However, in today’s increasingly competitive labor market, solely offering traditional group health insurance may no longer suffice. This is where supplemental insurance plans come into play.

    Supplemental insurance plans, often referred to as voluntary benefits plans, are not mandatory under the law but have become a crucial component of a well-rounded benefits package. These plans offer a host of valuable benefits that can complement your standard group health insurance, making them an attractive proposition for both employers and employees alike.

    At GMS, we recognize the significance of offering diverse and tailored health coverage options to meet the unique needs of your workforce. When you choose to partner with us, you empower your employees with the flexibility to select supplemental health insurance that suits their individual requirements. These supplemental insurance plans can include, but are not limited to:

    • Life
    • Dental
    • Vision
    • Accidental and critical illness
    • Long and short-term disability
    • And more!

    By incorporating these supplemental insurance plans into your benefits package, you empower your employees to make choices that align with their unique health care and financial needs. This not only sets your organization apart as an employer of choice but also demonstrates your commitment to the well-being and financial security of your workforce, fostering a loyal and contented team. Contact us today and let us find a plan that meets your team’s needs.

  • In an era marked by unprecedented health care challenges and changes, one issue that has been steadily making headlines is the rise in prescription drug costs. Employers, in particular, are feeling the financial pinch as they grapple with the ever-increasing expenses associated with providing prescription drug benefits to their employees. Recent data indicates that the median annual price of new drugs surged from $180,000 in 2021 to a staggering $222,000 in 2022, marking a 23% increase. In addition, the costs of existing drugs also saw a significant spike of more than 25% in just one year.

    Despite these statistics, there’s hope on the horizon. Employers can adopt innovative strategies to effectively manage prescription drug costs while ensuring that their employees receive the medications they need. If you’re a small business owner, continue reading to explore ways to navigate this challenging trend and make informed decisions to protect your employees’ health and bottom line.

    Leverage Technology

    One of the fundamental steps in controlling prescription drug costs begins with employees. Even the most well-designed prescription drug plans can’t deliver on their promise if employees don’t fully understand them or don’t adhere to prescribed drug regimens. Educating employees about their coverage and available alternatives is essential. Employers can utilize apps and technology to provide alerts and prompts when drug prices rise, allowing for discussions for more cost-effective alternatives with health care providers. In addition, monitoring and improving adherence to care plans and drug therapy requirements is crucial, as non-compliance not only drives up costs but also poses a threat to employees’ health.

    Carefully Manage Plans

    Employers, especially those with self-funded health benefits, have opportunities to manage costs more effectively. They can negotiate contracts, define drug formularies, and seek ways to maximize rebates from drug manufacturers. Smaller and fully insured employers should work closely with health insurance carriers to manage formularies and tighten authorization requirements, ensuring that only those needing specific drugs can access them. Employers should consider steering patients toward biosimilar and generic drugs when clinically appropriate, always weighing the net cost and the best clinical choice for the patient.

    Select The Right Partners

    Selecting the right partners in the management of prescription drug benefits is paramount. Employers should ensure that their partners’ priorities align with their goals. For instance, an insurer offering a fully insured prescription drug plan to a smaller employer will focus on controlling formulary costs. Employers must also prioritize efficient prior authorization processes, ensuring they don’t disrupt patients’ clinical care and treatment timelines. In today’s evolving landscape, employers have the opportunity to partner with third parties, such as professional employer organizations (PEOs), to assist with these rising costs.

    The Help Of A PEO

    In the current economic climate, businesses face an uphill battle with ever-increasing expenses. From the mounting health care and prescription medication costs, entrepreneurs and business owners are navigating a complex financial landscape. However, there’s a solution that can offer significant assistance in tackling these challenges – GMS, a professional employer organization (PEO). GMS comes equipped with Rx Specialists who can provide invaluable guidance in optimizing health care plans, controlling prescription drug costs, and ultimately reducing the financial strain on business owners.

    Christine Rohrer, GMS’ Rx Coordinator, added, “To help with the rising cost of medications, Rx Coordinators at GMS will provide support for members who need additional help accessing medications that may have a high copay, require a patient assistance, and/or are excluded such as specialty medications. If needed, the Rx team will look at the members’ diagnosis to discuss treatment options with providers. We also investigate and research future drug trends, search for medications that are covered through medical, and/or discuss switching medications to a covered, cheaper alternative that is on our formulary. We will look through every available option and take on a hands-on approach to ensure our members have access to life-changing medications.”

    By partnering with GMS, business owners can not only ease the burden of rising expenses but also direct their energy towards the core goal of their business: growth and success. In times of financial uncertainty, PEOs can be the sturdy bridge that supports your business. Contact our HR experts today.

  • The constant climb of health care expenses in the United States is causing increasing concern, particularly as inflation continues to impact the nation. The Nationwide Retirement Institute Health Care Cost in Retirement recently released a survey that paints a worrying picture of Americans’ financial confidence as they approach their retirement years.

    Decreasing Confidence In Facing Health Care Costs

    The survey shows Americans’ doubts about their ability to manage health care expenses as they grow older. 59% of respondents express uncertainty about their capacity to meet these financial burdens, and 57% are anxious about the costs associated with caregiving for their partner or spouse.

    Further complicating financial planning is the anticipation of medical advancements driven by artificial intelligence (AI), which could potentially extend lifespans. 26% of respondents expect AI to grant them an additional 10 years of life, with different generational expectations. Gen Z envisions 15-year extensions, while millennials anticipate 12 years, Gen Zers expect eight years, and boomers foresee a 9-year extension. This implies that Americans may need to financially prepare for health care costs over a more extended period, emphasizing the need for a robust financial strategy.

    Kristi Rodriguez, Senior Vice President of the Nationwide Retirement Institute, noted, “Advances in AI and health care technology are moving at an unprecedented pace, offering hope for treating chronic diseases and other health concerns. However, longevity demands enhanced planning. Therefore, it’s vital to consult a financial professional to devise a comprehensive plan that caters to immediate and potentially extended health care needs.”

    Managing Health Care Expenses

    As Americans grapple with the prospect of an extended lifespan, current economic uncertainty is straining their finances and forcing them to make difficult decisions with long-term implications for their health care. Studies show that 18% of adults admit to delaying essential health care actions such as medical procedures, physical exams, or prescription renewals in the past year to save money. In addition, 10% of Americans are contemplating downgrading their health insurance plans due to high inflation, including 19% of Gen Z, 11% of millennials, and 14% of Gen Xers. In their quest for more manageable monthly premiums, 60% of adults opt for health insurance policies with lower premiums but higher deductibles, potentially leaving them unprepared to cover unexpected out-of-pocket health care expenses.

    The Role Of Financial Professionals In Health Care Planning

    With inflation and soaring health care costs causing widespread anxiety, consulting a financial professional is the most vital step individuals and business owners can take. These experts can help tailor financial plans to ensure people are well-prepared for the rising health care expenses without compromising their overall financial stability.

    Conversations with financial professionals are pivotal, particularly in understanding complex issues such as Medicare coverage. The survey underscores a substantial knowledge gap among respondents, with 72% expressing a desire for a deeper understanding of Medicare.

    In addition, Americans significantly underestimate the average cost of health care in retirement, estimating it at $55,343, while the actual 2022 cost stood at nearly triple that figure: $172,500 for an individual and $315,000 for a typical 65-year-old retired couple. This highlights the need for Americans to seek greater knowledge, guidance, and ongoing support for informed financial planning.

    Nationwide’s Health Care Cost Assessment tool is an invaluable resource that helps financial professionals and clients estimate future medical and long-term care expenses by considering individual health risks and facilitating comprehensive planning for the impending rise in health care costs.

    Have You Considered Partnering With A PEO?

    In the face of mounting health care costs and economic uncertainties, it’s clear that thoughtful financial planning is essential for safeguarding our well-being. Financial professionals, like those found within a professional employer organization (PEO), are pivotal in guiding us through these complex financial landscapes. They offer tailored solutions to bridge the gap between our goals and financial reality. By consulting with a PEO like GMS, business owners can pave the way for a secure, confident future, free from unmanageable health care expenses. Remember, preparation is the key to not just surviving but thriving in the ever-evolving world of health care and finances. Contact us today to learn more.