Are your health benefits right for a multi-generational workforce?

Today’s workforce can have many different generations working together, with more than five decades separating the youngest from the oldest.

With so many varying life goals, needs, preferences, and expectations, there is no one-size-fits-all approach to health benefits. But, this benefit plays a crucial role in maintaining a healthy, productive workforce, while also acting as a powerful tool to attract top talent.

That’s why it’s so important for today’s health benefit decision makers to understand how each generation approaches health care. Knowing what the different generations value will make it easier to offer health plans that appeal to all your employees, no matter what stage of their lives or careers they are in.

Value: pricing and other financial considerations

Each of the generations that make up an employer’s workforce have varying degrees of cost-consciousness when it comes to their health care decisions. This will ultimately play a role in an employer’s decision about whether to offer more traditional plans, high-deductible plans, or even consumer-directed health plans.

Cost-conscious Millennials and Gen Z prefer lower premiums

These groups are more price-driven than older consumers when selecting a health plan. They are more cost-conscious, having watched their parents bear hardship following the 2008 financial crisis, and carrying higher cost burdens themselves (e.g., college, high rents).

According to one survey¹, 70% of Millennials say cost is their top consideration when selecting health insurance (more so than Gen X and Baby Boomers). They are so cost-conscious that 50% of this generation has even gone as far as skipping, delaying, or stopping health care treatment, according to Xerox’s Health Attitudes 2016 survey.²

Because of this, high-deductible plans are emerging³ as the leading product among Millennials. This generation tends to prefer the affordability and consistency of lower monthly premiums, at the risk of paying more should they need to access services.

Caveat: Depending on a Millennial’s life stage (e.g., if kids are in the picture), they may opt⁴ for higher premiums to have a better idea of what their actual costs will be. This can also help diminish concerns about cash flow should they need to access care.

Cost concern diminishes among older generations—access and coverage become more of a concern

For older employees who are likely to access care more often than their younger counterparts, high-deductible plans could end up⁵ costing them more in the long run.

It comes down to deciding if they are willing to pay more every month for peace of mind down the road, or pay less and risk incurring higher out-of-pocket costs in the future.

Consumer-directed health (CDH) plans cater to all generations, but face adoption hurdles among younger generations

Options such as Health Reimbursement Accounts (HRAs) and Health Spending Accounts (HSAs) can offer financial advantages for both  younger and older generations. For Millennials, these accounts offer an opportunity⁶ to build savings early on; they also help all generations bridge the gap between their out-of-pocket costs with high-deductible plans.

Surprisingly, younger generations aren’t turning to these CDH solutions as often as they should. Perhaps it’s due to cost pressures from other financial obligations, or a general lack of awareness. According to one survey,⁷ the average 25-year-old worker contributed only 22% of their maximum-allowed HSA contribution.

Older generations, on the other hand, are more likely to use these options as a last-mile effort to build up extra retirement savings. These tax-advantaged tools⁸ are ideal for older employees who will be accessing funds for medical costs and may be at a higher pay scale than their younger counterparts.

To learn more about what each generation values in their health benefits, download the complete report, Maximizing your health benefit plans for a multi-generational workforce.

1 “Transamerica Center for Health Studies® Survey: Millennial Survey: Young Adults’ Healthcare Reality.” Transamerica Center for Health Studies. (2016, June).
2 “New Insights on Value-Based Care: Healthcare Attitudes 2016.” Xerox. (2016).
3 “Young Workers Like Those High-Deductible Health Plans.” CNBC. (2016, February 13).
4 “Millennials Do Want—And Need—Health Insurance.” HealthInsurance.org. (2016, July 8).
5 “Is High-Deductible Health Insurance Worth the Risk?” The New York Times. (2016, October 31).
6 “The Simplest Way to Explain Health Benefits to Millennials.” Allay. (n.d.)
7 CNBC, 2016.
8 CNBC, 2016.