Two-thirds of companies are ‘very concerned’ about controlling healthcare costs, a recent Society for Human Resource Management survey found. And for good reason: 73% of them noted an increase in total healthcare costs in the last year.
Businesses of all sizes across the country are looking to benefit advisers to provide smart recommendations to manage this price increase. They’re interested in innovative solutions that do not take anything away from employees, but that have a lessened negative impact on their bottom lines. So as the cost of providing health benefits to employees continues to escalate — and there is no end in sight — what can insurance consultants do to help clients make smart decisions?
To reduce costs, there has been a large increase in businesses implementing high deductible health plans. But, it is important to note that there are other strategies that can integrate with this type of plan to provide additional savings.
First, it is important to communicate to organizational leadership that they must teach their employees how to become smart healthcare consumers. That begins with employees having a clear understanding of the care that they need. They can then research how to receive that care at the appropriate price point. Promoting educated decision-making by training staffers to utilize price transparency tools can help save on costs. Advisers can also collaborate with clients to ensure employees are not only comparing general medical costs, but are also being proactive in researching other ways to save — specifically when it comes to prescription medications, which continue to increase in price by nearly 14% annually. Educating employees about cost-effective options, such as therapeutic equivalents or over-the-counter brands, can save both the employer and the employee money.
Second, advisers may consider recommending a wellness program, but it should be a program that works for their specific client. A free gym membership is great, but how are you going to encourage employees to take advantage of it? Perhaps staffers respond well to in-office speakers discussing ways to stay active or heart-healthy cooking demonstrations. The wellness program has to be targeted and should be re-evaluated and adjusted each year based on an analysis of cost-savings. But remember, wellness programs are a long-term investment. If appropriately executed over an extended period of time, workplace wellness programs work. Employees are healthier and a RAND report found that more than 60% of businesses that implemented programs experienced reduced healthcare costs.
Finally, benefit plans are not one-size-fits-all, and simply because a program worked one year does not mean that it will work the next. Too often, benefit advisers adopt a short-term mindset and will renew programs without appropriate evaluation. Instead, it is essential that advisers work with HR professionals to determine what makes sense in the long-term based on a business’ strategic goals or growth plans. Significant cost-savings can be found on an annual basis if programs — such as funding arrangements, plan alignments and prescription analysis — are appropriately reviewed.
As benefit advisers, we should never be a simple middle man between clients and insurance carriers. Healthcare in 2017 is complicated and it is often the largest single expenditure for businesses each year. It is our job to be a strategic partner who always keeps their best interest — including the health of their employees and the health of their bottom line — in mind.
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