It stands to reason that employees who are able to better manage their health are less likely to work while sick, be absent, or find themselves on the disability claim roll. In a time of unprecedented health care cost-cutting measures, employers have much to gain by thinking beyond the cost of health premiums. How can brokers help them shore up the health offering and manage the total cost of health?

In order to hold down major medical costs, more employers are offering health plans with high out-of-pocket costs. This shifts fiscal responsibility to the employee, who has to meet a deductible before the health plan picks up the cost of care. This is on top of the premiums already paid, and could include contributions to health savings accounts.

For some employees, too high a deductible or insufficient education about their coverage can impede access to care. The fiscal responsibility forces employees to consider certain factors before seeking medical care: “Is it urgent enough for me to seek care?” “Can we afford it?”

The point of putting decision making in the hands of the consumer was to allow them to consider the costs and benefits of pursuing appropriate medical care. While that has worked well for some, there’s no doubt that many adults wind up delaying care, whether it’s because they need to pay the electric bill or they are unable (real or perceived) to take time off from work to see the doctor.

A recent study by The Commonwealth Fund suggests that 31 million people — nearly double those found in a previous study just two years ago — aged 19 to 64 “had such high out-of-pocket costs or deductibles relative to their incomes that they were underinsured.” Forty-four percent of adults with private insurance and a deductible of $3,000 or more say that they did not get needed care because of cost.Delayed care took the form of not going to the doctor when sick, not filling a prescription, skipping a test or treatment, or not seeing a specialist.

Real impact

Delaying care can become costly in a multitude of ways. Back conditions exacerbate, insidious diseases like cancer go undetected, depression goes untreated, and diabetes goes unmanaged. Disability carriers see this when a condition is so severe that the employee can’t work. Before an employee even hits the disability claim roll, the employer is faced with productivity challenges like presenteeism (working while sick) and intermittent absence.

Employees who work when they’re sick have substandard performance, which impacts productivity. According to a 2013 study from the Integrated Benefits Institute, the retail industry, which has large portions of its population working part-time and thus not participating in benefits programs, is particularly vulnerable to presenteeism. It is actually the largest contributor of lost work time in the retail space, accounting for 18% more lost work days than actual sick days.

The real cost of absence can be staggering and is often significantly higher than simply the wages paid to absent workers (for example, consider the impact to a team when a crucial member is out). According to cost estimation reports generated by the Integrated Benefits Institute’s Absence Cost Estimator Tool, a management company of 5,000 employees sees just under $12 million in total cost of absences each year (69% attributable to wage replacement and 31% to productivity loss), and nearly 25,000 lost workdays, 85% of which are due to illnesses and injuries. This can be improved upon as even a 1% improvement in health management would result in savings of $117,000 and 259 fewer missed workdays.

Employers possess the ability to drive improvements by making sure their employees are aware of their total health benefits and helping them to understand the upside of managing their health proactively. There are many ways to do this:

  • Encourage employees to utilize their health benefits services like disease management and health advocacy programs, which can help answer clinical questions and provide administrative guidance.
  • Foster participation in wellness programs that are designed for the population’s medical issues.
  • Create a plan to routinely remind employees of the plan’s preventive care screenings.

As a trusted partner for your clients, help put them on a path to total health management by having them look at their benefits package from multiple angles.

  • Is the health deductible achievable relative to their employees’ earnings?
  • Does the HSA contribution complement the group’s medical utilization (e.g., is it enough)?
  • Is there a separate deductible for prescription drugs?
  • Do they offer voluntary plans like accident insurance or critical illness insurance that would help employees cover out-of-pocket costs?

Let’s not let these problems go unsolved. No one, except perhaps new mothers, wants to receive checks from their disability carrier. Brokers are strategically positioned to encourage employers to commit to a more productive workforce by asking the right questions, extending the benefits discussion beyond health insurance, and pulling the levers needed to create a better plan for total health.

Dumont is assistant vice president of Product Development at Sun Life where she oversees the suite of Group and Voluntary Life, Disability, Accident and Critical Illness insurance products and drives the company's integrated approach to disability management and employee benefits solutions.

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