Employee benefits are an essential element of compensation in American business. Health insurance, the most substantial of these benefits, has seen a significant cost increase over the last few years. With the passage of the Affordable Care Act (ACA), providing health coverage has become more cumbersome to manage. Whether your company is required to provide coverage or elects to do so, there are several methods to manage the impact.
1. Institute wellness programs, education, and incentives.
There is a trend toward promoting employee health through employer-sponsored programs for nutrition counseling, regular exercise, team fitness, smoking cessation, and weight loss. A key to success is to set achievable goals and provide reasonable employee incentives.
These programs, frequently recognized by insurers, may lower your premium costs. They can also generate a healthier workforce, leading to better work attendance and productivity.
2. Consider Health Savings Accounts (HSA) and High Deductible Health Insurance (HDHI) plans.
Health Savings Accounts in concert with High Deductible Health Insurance (HDHI) plans generally result in significant savings on premiums. Some employers choose to use these savings to fund a portion or all of employees’ Health Savings Accounts. If the employee population is large enough, HDHI plans may be offered alongside a more traditional Preferred Provider Option plan so that employees have a menu of cost and underwriting options.
3. Reward non-tobacco users or penalize those who do.
However you cut it, health insurance premiums in today’s market are measurably lower for employees who do not smoke. You can offer a discount for employees who do not use tobacco, or institute disincentives for those who do; however you position it, the portion of the premium cost for those who agree to abstain from tobacco can be differentiated. Ultimately, non-users pay less, as does the company.
4. Educate on emergency room alternatives.
Urgent care and non-hospital based clinical facilities translate to a greater availability of cost effective alternatives to the traditional emergency room. By some measures, the underlying cost for using an emergency room is at least six to seven times greater than a doctor or clinic visit (with the spread anticipated to grow). Claims experience impacts the cost of premiums. Educating employees about their urgent care options can have residual benefits to the sponsor as well as participants.
5. Make the most of the relationship with your risk management advisor.
Brokers and advisors should seek alternative quotes and assist you in reviewing viable options. Do not allow your advisor to present you with the quoted increase 30 days before contract renewal; make sure your consultant is actively reviewing your options in the marketplace well in advance.
With healthcare costs projected to continue upward, managing your benefits budget is more critical than ever. Consider these emerging trends in today’s marketplace to maintain a stable cost for an important employee benefit.
Timothy C. Hilbert can be reached at Email or 215.441.4600.