Health and health care disparities in the U.S. are an urgent, national problem. Numerous studies show that it is harder for people of color and those with less money and resources to reach their optimal health.

Undoing this injustice will require stakeholders across every sector—not only health care, philanthropies, and policy shops, but the private sector as well. In fact, employers are not only uniquely positioned to address health inequities, but it’s in their best interest to do so.

Here’s why:

Every year, employers get less and less credit for their investment in employee health.

Over the past decade, health insurance costs have risen steadily. As a result, employees have become less and less satisfied with their employer-sponsored health benefits. Of course, employers have also been affected by rising costs too: they’re paying more in premiums as they try to keep employees healthy while managing costs. But employees don’t see that says Deb Gordon, MBA, health care consumer advocate, and author of The Health Care Consumer’s Manifesto.

“I’ve interviewed many people with employer-sponsored insurance who could recite for me how the value of employee benefits has decreased over time,” says Gordon. “To the consumer, they just know their experience has gotten worse and value has eroded, and they sometimes blame the employer.”

Focusing on health equity is one way that employers can start getting more for their health care dollar. The people who are most affected by rising health care costs are also likely those who are most dissatisfied with the benefits their employers offer. By identifying solutions that make it easier for lower wage earners and people of color to access and use their health benefits, employers will help increase overall benefits satisfaction, while also creating a more inclusive workplace culture. 

Stacey Gordon, MBA, consultant and Author of UNBIAS: Addressing Unconscious Bias at Work, says that focusing on health equity will give employers a competitive advantage.

“There are so few companies that have built a culture that makes their people’s health a priority,” she explains. “If you can be known for that, you’ll be turning people away.”

“If they [employees] are able to see that they have better access to health care, more equal access to health care, lower costs in their access to health care, and that there’s an expectation that they will actually use their health care…. it goes a long way to being able to attract and retain the type of talent everyone is clamoring to find right now,” says Stacey Gordon.

Healthier employees means lower costs for employers.

When employees can’t access health care—whether due to cost concerns, transportation barriers, or confusion over coverage—they have worse health outcomes. This leads to absenteeism and less productivity at work, which can greatly affect employers’ bottom line. In fact, absenteeism due to preventable chronic diseases like hypertension and diabetes costs more than $2 billion annually. And productivity losses from absenteeism costs employer $225.8 billion annually—a number that has likely gone up since the 2015 report from the CDC.

Black, Indigenous, and other people of color as well as lower wage earners are already more at risk for chronic disease. Employers can make the biggest impact on their employees’ overall health by focusing on solutions that support these populations.

“Look at how much money you are losing because people don’t have health care access, and then you decide to make a choice to absorb those costs, and have the healthiest most productive workforce,” says Anton Gunn, MSW, an employer consultant and expert on Socially Conscious Leadership.

“Focus on the mission of your people; the margin will take care of itself.

Health equity affects pay equity.

Black workers in the U.S.—both men and women—still earn significantly less than equally qualified white workers. One opportunity to address this inequity is to examine your health benefit design. In a traditional defined contribution model, the employer contributes the same amount to every employee, regardless of their income. While seemingly fair, this really means that lower wage earners are paying a much larger portion of their salary for health insurance than higher wage earners. In other words, a defined contribution model further exacerbates existing pay inequities.

“Not only are you getting paid less, but you are paying the same premium amount as someone who is making a lot more money than you,” says Stacey Gordon. “There’s no equity in that. You are getting dinged twice.”

Because of this inequity, some employers have begun to adopt income-tiered contribution models. With this approach, premium contributions are set based on employee compensation, which leads to all employees paying a similar percent of their income toward health insurance. 

Employers are uniquely positioned to address health inequities.

According to the Edelman Trust Barometer, businesses are the most trusted institution, coming out ahead of government and policy makers.

“We are the most trusted voice, not just on business topics but on societal change,” says Trudy Sullivan Stoudamire, MBA, Chief DEI Officer at Health Catalyst. “Businesses are viewed as more trustworthy, more credible, more ethical, and more competent… especially as it comes to solving social problems.”

Health inequities are one of the biggest problems in the U.S. right now. As trusted stakeholders, employers are uniquely positioned to address this problem and bring about real change. Starting with their own employee population makes sense.  

Promoting health equity is the right thing to do.

The infant mortality rate for Black babies is more than twice the national average. Black mothers are more than 3 times as likely to die in childbirth as white mothers. Hispanic adults are almost twice as likely as white adults to have been diagnosed with diabetes. Children in urban areas experience the highest rates of morbidity from asthma, while children living in rural areas are more likely to have complex diseases and live further from hospitals.

These and many other health disparities will continue to persist until stakeholders across sectors come together to promote health equity. By becoming champions for health equity, employers can make a huge difference in the lives of their employees, and build national momentum for change.

“As a nation, we are only as strong as our people… and the stronger your people, the stronger your company,” says Gunn. “So, it’s really around how do we eliminate the injustices, the unfairness, the inequities that might exist in our workforces, particularly around who shows up healthy and strong—mentally physically and emotionally—to bring their best selves and do their best every day.”

This article compiles advice shared on the recent webinar, How Benefit Programs Can Eliminate Health and Pay Disparities. Watch the full webinar here.