High-deductible healthcare plans have become a common benefits option, especially among smaller businesses, because they help reduce monthly premium costs for the employer. However, these plans often shift more financial responsibility onto employees, leading to significantly higher out-of-pocket expenses for prescriptions and other medical care. As a result, rising healthcare costs are placing increasing strain on household budgets.
As deductibles increase alongside prescription medication costs, the associated financial challenges can significantly strain employees’ budgets. For employers, taking steps to ease these burdens is more than a gesture of goodwill — it’s a business strategy. Supporting employees with tools and benefits that make healthcare more affordable can improve retention, boost productivity and position the organization as an employer of choice in a competitive market. Companies strengthen workforce well-being and long-term business performance by providing employees with the resources to access and afford the care they need.
As Matthew Herfield, co-founder and CEO of BuzzRx, a free prescription savings platform, explained during a recent conversation, employers can help their employees navigate high deductibles in various ways.
Encourage the Use of Generic Drugs
When it comes to prescriptions, Herfield advises that one of the most immediately impactful actions employers can take is to encourage the use of generic drugs. “Generic drugs cost an average of 80 to 85% less than the brand-name equivalent,” he explains.
“The FDA still requires that generics have the same active ingredient, safety and effectiveness as the brand-name medication. When generics aren’t available, there are often biosimilar drugs that treat the same condition, but with a different active ingredient and at a much lower cost than the most expensive and well-known brands.”
While generic alternatives aren’t available for every brand-name drug, employers can work with their pharmacy benefit manager (PBM) to create a formulary that prioritizes generics. Plans could also use step therapy, which requires the use of the generic drug before switching to a more expensive brand-name version.
Utilize Prescription Discount Programs
Herfield also notes that prescription discount programs, such as those offered by BuzzRx, can further reduce prescription drug costs for employees. “Our prescription discount program is completely free, and can be used by employees to fill gaps in insurance coverage and provide additional cost savings,” he explains.
“Depending on the medication, the negotiated discount rate that your employees would pay at the pharmacy with BuzzRx could be less than what they would pay with their insurance copayment or coinsurance. This is especially true of high-deductible plans, which can have higher out-of-pocket costs for higher-tiered medications. By providing a free and easy-to-use prescription discount card, employees are given another helpful opportunity to save on their healthcare costs.”
According to Herfield, BuzzRx users can save up to 80% off the retail price of prescription medications when they present their card at one of over 60,000 participating pharmacies nationwide. Using either insurance or the discount card ensures that employees can always get the best available price.
Encourage HSA Contributions
Employees in high-deductible plans often have another resource available: health savings accounts (HSAs). As Herfield explains, these accounts can be a valuable way to save on medical expenses.
“With an HSA, the money you contribute to the savings account isn’t taxed, nor is the interest it earns while in the account. As long as you use it for a qualified medical expense, which includes prescription drugs, you won’t pay any taxes when funds are withdrawn,” Herfield says.
“This essentially allows employees to keep more of their take-home pay that would get used for medical expenses, rather than having it taxed before they pay for medical care. Best of all, unused funds roll over, and employees can keep their contributions even if they change jobs.”
Employers who offer HSA-eligible high-deductible health plans should offer resources to help their employees set up an HSA for their out-of-pocket expenses. Many employers allow for direct contributions through payroll deduction to simplify the process, and some even offer matching contributions.
Incentivize Employee Wellness
Finally, Herfield recommends that employers incentivize a variety of employee wellness initiatives. “Giving access to different wellness programs, from gym memberships and weight management support to mental health counseling and stress management, can go a long way in improving employee physical, mental and emotional health,” he explains.
“A proactive approach to employee wellness not only helps individuals better manage chronic conditions and reduce their risk of illness or injury, but also lowers healthcare costs while driving higher productivity, engagement and lower absenteeism in the workplace.”
In addition to programs designed to directly influence employee health, Herfield also recommends that employers offer educational resources to help employees better manage costs within their healthcare plan. For example, knowing when to visit urgent care rather than the ER or understanding the value of generic prescription drugs can have a big impact on employees with high-deductible plans.
Employers can tailor their programs to improve financial, physical and mental health by taking a holistic approach that focuses on maximizing the benefit for their workforce.
You Can Help Employees Manage Costs
High medical costs are a complex issue that likely won’t be truly resolved anytime soon. However, employers can ensure better health and financial outcomes by taking steps to help employees navigate high deductibles, particularly when it comes to prescription medications.
