In today’s world, it is crucial for employers to manage current health care costs and develop a strategy to combat rising costs.

Amid increased insurer premiums expected in 2015 to fund the Affordable Care Act many are quick to pin these costs on the program itself. In truth, when we look at the big picture of what is driving up health care costs, the chief culprit is not Obamacare. Research shows that three quarters of health care costs are related to the lifestyle choices of human beings, not heredity or the environment — or government legislation and regulations.

So what are the keys to keeping a lid on health care costs while providing great employee benefits? It takes employee education, program automation and wellness integration — coupled with a proactive health benefits planning process. After all, we, the end users of health care, are in fact in control of the associated costs.

The importance of education and program integration

By way of example, consider the case of Potomac Companies’ recent work with a prominent government contractor in the D.C. metro area, with approximately 250 employees and 180 plan participants.

The problem

Five years ago, the company’s health care costs were soaring due to high utilization, large claimants and extremely rich programs that were very highly subsidized by the company, at a level far exceeding the industry standard. As a result, the company was spiraling and struggling to keep up, while employees remained blissfully unaware as to how to more cost-effectively and proactively manage their health care needs and associated expenses.

The solution

Enter Potomac Companies, my employee benefit brokerage and consulting firm, also based in the D.C. metro area. Upon review of their client company’s large health care expenditures and soaring subsidies with little to no employee awareness or integration, Potomac Companies assisted the HR department to develop and implement a company-wide, top-down wellness program to promote accountability with buy-in and consistency across all of its locations.

Additionally, Potomac Companies initiated a highly-supported health savings account that included a high employer contribution, integrated with the wellness program and associated incentives. First year participation was 84%, which is dramatically higher than the industry average.

The results

Shortly after making these changes, the results became overwhelmingly apparent. In the two years following the launch of the HSA program, the company had experienced a substantial reduction in expected claim activity, a total decrease of 47%.

In addition to the demonstrated cost savings, the company also realized several other key benefits, namely healthier, more informed, productive and accountable employees who had gained a greater understanding of the wealth of options available to them — without having to worry about forfeiting great health care. Potomac Companies’ educational process was critical as well, focused on changing the mindset of employees, to ensure they understood the new plan design and details, and did not feel as though they were leaving anything behind.

In the years since, the company has also achieved recognition for its wellness program and its impacts as one of the healthiest employers in the Washington, D.C. area.

Appelbaum is the founder and president of Potomac Companies, Inc., one of the premier full-service employee benefit brokerage and consulting firms in the Washington, D.C. region. Reach him at

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