Workers Remain Financially Fragile: Healthcare Options to Improve Financial Resilience

Financially fragile workers are highly vulnerable to current economic conditions.[i] Most live paycheck to paycheck. Most have little to no savings. Most lack a financial safety net and do not have resources on hand to meet even a $1,000 unexpected expense.[ii]

Rapid inflation compounds existing financial fragility for this segment of Americans who are unprepared for regular household expenses, let alone unexpected out-of-pocket medical costs.[iii]

As a result, financially fragile workers often delay and even avoid medical care in fear of accumulating medical debt and falling into further financial hardship. In fact, it is reported that upwards of 30% of adults forego needed care due to out-of-pocket costs. 

Recently released data from the 2022 Survey of Consumer Finances confirms that after adjusting for inflation, average household income before taxes was $141,000 in 2022, up from $121,000 in 2019 (up 18%). But that’s not distributed evenly. For comparison, the increase in the median (middle household) before tax income was $70,260 (2022), up from $68,450 in 2019 (2.6%). While American households are better able to manage their debts, that’s primarily the result of significant COVID spending in 2020 – 2022 – which has all ended.

Jack Towarnicky, ERISA counsel, aequum, recommends employers encourage a consumer-driven approach through three actions:


Reference Based Pricing, and

Health Savings Account capable coverage.


Employers should empower employees with necessary information so they can proactively make informed, cost-conscious decisions about their healthcare options at:

Point of Enrollment, and at

Point of Purchase.   

“When workers have a choice of coverage at annual enrollment, the mandated disclosures of the Summary Plan Description (SPD), Summary of Material Modification (SMM) and Summary of Benefit Coverage (SBC) are almost always insufficient to make an informed decision,” says Towarnicky. “For example, the typical SBC does not include a complete side by side comparison where coverage includes deductibles, copayments, coinsurance, and employee contributions.”

Advance Transparency in Coverage (TiC) rules require employers to provide employees with easy access to an online shopping tool featuring 500 shoppable services and highlighting personalized out-of-pocket cost information for covered healthcare items and services. These pivotal transparency mandates spearheaded a massive shift in the role of the patient as a healthcare consumer.

Towarnicky also noted that the new transparency mandates to disclose prices for “shoppable services” are too complex to be effective for most participants. The best opportunity to facilitate consumerism is to make available an innovative Advanced Explanation of Benefits (A-EOB),” says Towarnicky. “Because Department of Labor guidance on the A-EOB has yet to be issued, any organization that strategically implements their own version of a “best practices” A-EOB could capture a competitive financial advantage – reducing both employer spend and employee out-of-pocket costs – by putting the economic purchasing power and decision-making in the participant’s hands.”

Reference-based Pricing (RBP)

Even with greater transparency, significant price variations can still exist across hospitals and providers for standard procedures. Because of this, many health plans have adopted reference-based pricing (RBP) strategies. Designed to moderate excessive hospital costs, RBP establishes a benchmark fee schedule and payment ceiling instead of negotiated fees by contracting with a provider network.

Plan sponsors and participants will both benefit from the consistent application across all providers and health networks. A “pure” RBP structure, coupled with tech-driven data support, may avoid unreasonable or excessive provider charges – potentially lowering both the cost of coverage and employee point of purchase cost sharing.

A “pure” RBP structure may also avoid certain No Surprises Act compliance requirements and may minimize disputes subject to the Independent Dispute Resolution process.

Health Savings Accounts

Leveraging HSAs as part of a ’health and wealth’ rewards strategy can optimize both savings and financial preparedness. Capable of quadruple duty, HSAs cover out-of-pocket medical costs in current and future years as well as Medicare and certain health and long-term care insurance premiums, where HSA assets can also provide for a retirement income and survivor benefits.

HSAs offer a significantly different value proposition – it receives America’s most valuable tax preference and offers the greatest utility. HSA monies, including any employer contributions, are always “vested,” and never forfeited. HSA contributions receive more favorable tax treatment than contributions to a 401k. And, unlike a Health Flexible Spending Account (FSA), HSA monies are invested and accrue earnings tax-deferred. Participants receive HSA monies tax free when used to pay eligible health care expenses and premiums.

Some employers will deliberately add an HSA-capable coverage option effective December 1, 2023. Done right, that offer provides employees a great opportunity to maximize tax-favored savings.

Value of a Medical Billing Partnership

To support annual enrollment and help manage plan design and administration, plan sponsors are benefiting from partnerships that provide them with insights through data-driven solutions. Real-time price information of the true cost of health care services enables sponsors and members to make the most advantageous cost-benefit decisions regarding enrollment options.

As your partner, aequum can help lower costs, achieve savings, enhance member experience and maximize your plan’s success in 2023/24 and beyond. Please contact us if you have any questions or need support.


i. American Payroll Association, Getting Paid in America. 72% would have some or significant difficulty meeting their financial obligations if their next paycheck was delayed one week – delayed, not missed, and delayed only one week (30,225 out of 38,605 survey responses). Accessed 10/24/23 at:

ii. E. Renter, Most Americans Save, but Many Can’t Cover a $1,000 Emergency, NerdWallet 2023 Consumer Savings Report, 5/9/23. Less than half (45%) of Americans would be able to cover a $1,000 emergency expense without turning to a credit card or loan. Accessed 10/24/23 at:

iii. Federal Reserve Bank, Economic Well-Being of U.S. Households in 2022, May 2023. “Twenty-eight percent of adults went without some form of medical care in 2022 because they could not afford it, up from 24 percent in 2021 but below the 32 percent seen in 2013.” Accessed 10/24/23 at:

iv. Federal Reserve Bank, Changes in U.S. Family Finances from 2019 to 2022: Evidence from the Survey of Consumer Finances, October 2023. Because of the dramatic level of deficit spending in the form of sweetened food stamps, stimulus checks, rental assistance, enhanced unemployment benefits and larger child-care tax credits, the ability of individual families to service their loans is at an all-time high when measured by SCF leverage ratios, debt-to-income ratios, and payment-to-income ratios. Accessed 10/24/23 at: