Staying healthy is getting more expensive with each passing year, even for those whose healthcare is provided by an employer. According to a recent study, family health insurance premiums increased an average of three percent this year, which was the sixth consecutive year that such costs rose.
Pension consulting experts have noticed that this trend has made consumers more aware of the importance of financial fitness. Not only must they now save for retirement, but they also have to consider medical care. Long before retirement, a serious health issue could wipe out a person’s entire savings. For employers and retirement advisors, it’s more important than ever to steer people toward financial health. Here are three major ways to offset rising healthcare costs.
Health Savings Accounts
Employers are increasingly looking into health savings accounts (HSAs) as a way to help employees set money aside for later medical needs. Plan participants set pre-tax money away, where it continues to grow each year. If the money is used for medical expenses, no taxes will be due. This type of plan is ideal for someone who is in good health and has plenty of time to save for future medical bills.
The days of pensions are nearly gone, with many employers opting to provide a profit-sharing retirement plan like a 401(k) or 403(b). Employees who are concerned about future health care costs can simply contribute more money into their retirement accounts. While they won’t be able to withdraw money without penalties, they’ll at least have the peace of mind of knowing it’s there if they need it.
Find Low-Cost Alternatives
As healthcare costs rise, many employers have chosen to seek out the best value for their employees. Often this happens in coordination with a healthcare plan provider who urges members to take advantage of cost-saving measures like 24-hour clinics instead of emergency rooms for non-life-threatening medical events. By creating these educational opportunities, employers can show concern for their employees while also keeping insurance premiums low.
For those in the pension consulting field, health care costs are an important issue. It’s essential for employers to recognize the concerns their employees have and work directly with seasoned professionals to help find the retirement and healthcare plan that will address their concerns.
FiduciaryFirst is a Maitland, Florida based company that provides independent retirement plan fiduciary support with a holistic approach. Our comprehensive Prudent Fiduciary ProcessSM (PFP) enables employer groups to address fiduciary standards. For more information about pension consulting call us at 866-625-4611 or contact us online.
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This information was developed as a general guide to educate plan sponsors, but is not intended as authoritative guidance or tax or legal advice. Each plan has unique requirements, and you should consult your attorney or tax advisor for guidance on your specific situation. In no way does advisor assure that, by using the information provided, plan sponsor will be in compliance with ERISA regulations.