How Companies Can Support Black Employees with Equitable Benefits

Quick look: With the right knowledge and benefits options, brokers can help address the racial health and wealth disparities affecting today’s Black employees and their families. Here, we explore inequalities facing Black Americans and how partnering with a PEO can enable brokers and their clients to level the playing field for marginalized workers.

February is Black History Month, a time dedicated to acknowledging the accomplishments, culture, history, and experiences of African Americans. The national theme for Black History Month in 2023, “Black Resistance,” aims to explore how Black people in the U.S. have addressed historical and ongoing disadvantages.

Unfortunately, racial inequalities exist in the healthcare system, as well as regarding the possession of wealth in the U.S.—but there is an opportunity for brokers to help close these gaps. As employers ponder how companies can support Black employees, their brokers are in a unique position to provide them with the right benefits to help improve historically marginalized staff.

An unequal healthcare experience

Before exploring how brokers can help clients advocate for Black employees, it’s crucial to address the racial bias and inequalities in the healthcare system today.

Discrimination

The Urban Institute recently reported that between September 2019 and September 2020, over 10% of Black people faced discrimination by a doctor or other healthcare provider based on race, ethnicity, disability, gender, sexual orientation, or health condition. This number is in contrast to just 3.6% of white and 4.5% of Hispanic people.

According to Pew Research, 56% of Black Americans have had at least one of several negative healthcare experiences, like being treated with less respect than other patients and having to speak up to receive appropriate care.

Misdiagnosis

In addition to facing discrimination in medical settings, research has shown that Black patients are misdiagnosed more frequently than white patients, especially for mental illnesses. And in a similar vein, despite Black people being 20% more likely to experience mental health issues, only one-quarter of them will receive care (compared to 40% of white people).

The reason behind misdiagnosis is multifaceted. It can include implicit biases affecting how physicians interact with their Black patients. Stigma can also be involved—Black people may not be comfortable seeking care if they do not feel their provider will understand their background or be able to relate to them.

Another cause of the frequent misdiagnoses is rooted in the diagnosis of ailments. For example, the algorithm for assessing lung health refers to centuries-old information suggesting Black people have a lower lung capacity than white people. This has led to Black patients being undiagnosed and underdiagnosed with respiratory complications.

A similar situation exists with kidney health clinical algorithms, which assume that Black people have higher creatinine levels than white people, despite having similar kidney performance. This flawed “race correction” has been occurring for over 20 years and routinely assigns Black patients with higher kidney function, causing many to receive care too late and be disproportionately affected by advanced stages of kidney disease.

Medical debt

Black patients also face more medical financial burdens than other races. Another Urban Institute study found that Black adults had the highest rate of medical debt and medical debt in collections, followed by Hispanic adults and white adults.

This financial liability can cause individuals and families to skip medical care, affecting their current and future health.

Poorer pandemic outcomes

Another recent trend highlighting the medical inequalities Black people face is related to COVID-19. Unfortunately, Black Americans had the highest mortality rate during the pandemic and died at a 1.4x higher rate than white Americans during the first half of the outbreak.

The wealth gap

Black Americans face wealth disparities in addition to medical ones, including pay inequalities, having fewer retirement savings and assets, and being disproportionately affected by job loss.

Pay inequality

According to recent data from Payscale, in general, Black men earned just 87 cents for every dollar earned by white men. And when controlling for experience, education level, job description, and location, they made 98 cents for every dollar earned by their white counterparts—a slimmer but still significant long-term difference.

Black women face an even larger gap, earning just 63 cents for every dollar a non-Hispanic white man makes (adding up to approximately $1 million in lost wages during a lifetime).

Retirement savings and assets

The Economic Policy Institute reports that while almost 70% of white Americans ages 32-61 have money in a retirement account, just 41% of their Black peers do. With roughly 6 in 10 Black families having no savings in employer-sponsored or individual retirement accounts, there is much opportunity for benefits brokers and their clients to make a difference in these individuals’ lives.

Another factor affecting Black Americans’ retirement income is Social Security benefits. Because this income is calculated using factors like lifetime earnings, Black retirees often receive less than their white peers. This can negatively impact them, considering that Social Security is the only source of income for one-third of Black Americans (compared to just 18% of white people in the U.S.).

In addition to funds in retirement savings accounts and Social Security income, homes can be one of the most valuable assets for someone to have in their golden years. Unfortunately, U.S. Census Bureau data shows that the gap between Black and White homeownership rates was wider in 2022 than in 1960.

Layoffs and recovery

Layoffs impact thousands of workers nationwide, and unfortunately, Black Americans tend to be hit significantly harder than most. A RAND Corporation study revealed that Black workers were laid off at higher rates during the pandemic, and a larger percentage of White workers were called back to work as businesses reopened.

The right partnership can empower your clients’ staff

With the support of their benefits brokers, small- and medium-sized business (SMB) leaders can significantly improve their Black employees’ careers, finances, and health. Employers and brokers should be aware of the current racial disparities and how the right benefits packages can better support Black workers and their families.

A professional employer organization (PEO), like ExtensisHR, can equip brokers with the plans and services they need to help companies create inclusive cultures, including:

• Health insurance plans with diverse in-network physicians and coverage for telehealth sessions, preventive care, mental health support, and more
• The option for medical plans to include health savings accounts (HSAs) that can pay for medical expenses and function as a long-term investment tool
• 401(k) retirement and 529 education savings accounts, as well as financial training on investing, budgeting, and more
• Access to an intuitive DEI Dashboard that allows clients to view real-time information on pay equity, salary trends, employee turnover, promotions, and more across race and gender demographics

Together, brokers, SMBs, and PEOs can create work environments and benefits packages that respect and empower workers with diverse backgrounds.

Contact the experts at ExtensisHR today to explore how we can help you craft a robust and equitable benefits portfolio to help level the playing field for Black Americans.