Minding the Gap: Common Primary Plan Coverage Gaps

Executive Health October 25, 2021

Employers are increasingly turning to high deductible health plans (HDHPs) as a way to manage healthcare plan costs. While HDHPs appear to control benefit budgets, in actuality, these plans simply shift more of the financial burden onto employees. As the increasing premiums, deductibles and out-of-pocket healthcare costs outpace wage growth, employees are struggling. Especially when there are many common coverage gaps and shortfalls in primary healthcare plans.

Employers are faced with strategic decisions. To protect talent and mitigate business risk, they should understand and control coverage gaps. They should also understand the connection between healthcare costs and financial stress—and address these realities. Here is a closer look at common primary healthcare plan gaps and how employers can reallocate contributions to more valuable insured coverage.

Financial stress affects employees

Shrinking primary plan coverage is creating new and serious financial hardships for employees. This causes financial stress, not just for workers with self-funded insurance but also for those with employer-sponsored insurance:

  • Two out of three Americans worry about paying for unexpected medical bills [1]
  • Nearly 50% of insured adults are concerned about being able to pay their deductible [2]
  • Four in 10 insured adults would not be able to immediately afford an unexpected medical bill of $500 [3]

Financial stress should not be ignored

Employees’ financial stress can affect performance and loyalty. Recent research by Prudential [4] found that:

  • Workers spend nearly four hours per week managing personal financial issues at work
  • Three in 10 workers report that financial stress impacts their job performance
  • 60% of workers are more committed to their employer and more productive on the job when employers demonstrate a commitment to their financial wellness

Clearly, employers cannot afford to ignore the realities of employees’ financial stress. What are the common primary plan gaps most likely to increase financial stress?

Common coverage gaps


As employers have moved to HDHPs and increased deductibles, many have opted to pair plans with Health Savings Accounts (HSAs) to bridge the gap. But HSAs aren’t the only answer, and deductible limits increased over 200% between 2008 and 2018. [5] With the average employer contribution approximately one-third the average individual deductible, [6] many employees struggle to adequately fund HSAs. Over half of employees with HDHPs lack the savings to cover their deductible. [7]


Deductibles certainly contribute to financial stress, but healthcare spending on everyday care can also add up quickly for employees. Nearly 25% of insured adults report difficulty in affording co-pays for doctor visits. [8]

Routine care

The cost of routine care, like specialist visits and lab work, can also add to financial stress. Nearly one-third of insured adults ages 18-64 report that they (or an insured family member) have received an unexpected medical bill for care from a doctor, hospital or lab that either their health plan did not cover or where coverage was less than expected. [9]

Visit limits and out-of-network costs

Even if the primary healthcare plan does cover co-pays, insured workers may hit visit limits before treatment plans are finished. Or, they might receive care from an out-of-network provider when coverage limits fall far short of costs.

Rx costs

In 2018, spending on prescription drugs topped $360 million, a 6% increase from the previous year (higher than the annual increase in total overall spending for the same year). [10] Prescriptions are a stressor for insured adults: nearly half worry about being able to afford them, and half have delayed filling a prescription in the last year. [11]

Additional primary healthcare plan coverage shortfalls

The coverage gaps and shortfalls of primary healthcare plans can add up quickly. Other common gaps include limited or no coverage for mental health needs, vision care (including eyeglasses and contacts), and dental procedures.

Closing the coverage gaps

Employers can’t afford the rich plans of yesterday, but they also can’t afford to ignore the financial stress and risk employees face. Employees need and value the security of health insurance coverage. And amid the pressures of the economic downturn and continuing uncertainty, employers need benefit flexibility to meet today’s evolving needs and tomorrow’s unknowns.

The right supplemental health insurance plans are a win-win for employees and employers. For employees, they provide first-dollar coverage inside the deductible, addressing one of the main drivers of employee financial stress. This lowers the financial risk that employees face with rising healthcare premiums and out-of-pocket spending. Workers can access the care they need—routine and unexpected—and address health needs without making difficult choices or delaying care. Fewer distractions and reduced financial stress can lead to greater productivity and higher performance.

Employers can opt for plans that give them the option to reallocate HSA and other employer-funded contributions into insured coverage. This helps them protect the benefit budget while addressing the realities of workers’ financial stress. In addition, with the right flexible benefit plans, they can offer coverage to all employees or select groups or roles as defined by the employer. Employers can also choose when to put these supplemental plans in place: before, at the same time or after primary healthcare plan renewal.

ArmadaCare’s fleet of supplemental health insurance benefits includes plans for closing coverage gaps for employers of all sizes. Learn more about options for employees at all levels of the workforce.

[1] Kaiser Family Foundation, 2020

[2] KFF, 2020

[3] KFF, 2020

[4] Prudential, Wellness Programs Earn Their Place in Human Capital Strategy, 2019

[5] KFF, 2020

[6] SHRM, 2020 and SHRM, 2019

[7] KFF, 2020

[8] KFF, 2020

[9] KFF, 2020

[10] Statista, 2018

[11] KFF, 2020

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