Shopping for group health plans is an important part of your business strategy. By shopping smart and comparing plans, you can investigate ways to make your benefits package stronger and more attractive to current and prospective employees – ideally, while also cutting costs.
It’s likely no surprise that the cost of employee health insurance is a tidy sum – or that premiums continue to increase year after year to match rising costs in health care. You know that shifting a larger portion of the premiums to employees can eventually become a point of dissatisfaction for your workforce, making it harder to attract and retain top talent. On the other hand, if you reduce benefits, employees will be equally unhappy. So what can you do to keep costs manageable?
The good news is that there are ways to implement a solid benefits strategy that doesn’t cost your organization an arm and a leg. Popular cost containment measures include:
- Changing plans or how they are funded
- Encouraging lower-cost services in patient care
- Fostering a healthier workforce
Read on to learn more.
1. Be smart about your plan choice
Choosing the cheapest plan isn’t the best strategy – even though it may save you money up front. If your employees can’t get the care they need, when and where they need it, your organization will pay the price with higher employee turnover and loss of talent.
Rather than shopping for the lowest-cost plan, shop for the best value. That might look different depending on the needs and demographics of your employees. And the strategy will vary depending on the size of your business – what works for large companies might not make sense for small employers or startups. By taking a thoughtful approach, you can strike the right balance between cost and benefit.
Here are some things to consider when weighing your options.
Evaluate what your employees really want and need
All employees want great benefits, but not everyone wants – or needs – the same level of care. Take into account your employee demographics and utilization data in determining what to offer as part of your benefits package. Consider conducting a survey of your employees to gauge what they want. Doing so can also encourage employees to be actively involved in their health care.
Help employees find the right care for them by offering flexible options rather than a one-size-fits-all approach. For example, perhaps offer a high-deductible plan option paired with a health saving account (HSA) for healthy employees who are seeking a lower-cost option. For those with greater medical needs, offer a low-deductible plan with a flexible spending account (FSA). Then make it easy for employees to choose the right plan during open enrollment using a tool like HealthPartners’ Plan for Me, which guides employees to the right option by estimating their individualized costs.
By providing these flexible options, you can meet the needs of your workforce without breaking the bank.
Look at the total cost of care
The price tag on complex medical procedures can be hefty. Discounts might seem like an attractive way to lower your costs. Comparative discounts are important, but we believe there are better ways to reduce the cost of health care.
Our goal at HealthPartners is to find ways to truly lower the total cost of care for each employee, and for your plan as a whole. In other words, we want to reduce the amount and type of care your employees need by keeping them healthier, treating health conditions earlier and increasing the use of lower-cost treatment options.
By focusing on the total cost of care, rather than line-item discounts, we help improve employee health while providing significant cost savings to employers.
Before switching to traditional self-funding, consider level-funding
There’s no doubt that self-insurance has some attractive benefits: no premiums, possible exemptions from state mandates and requirements, and savings on taxes and assessments. But there’s a major drawback to self-funding, and it can be summed up in one word: risk.
There’s simply no way to completely eliminate the unpredictability of claim-related costs.
A level-funded plan limits the risk from big claims while providing the financial benefits of traditional self-funded plans. Level-funding isn’t right for every employer because it has additional administrative requirements compared to fully insured plans. But if you have the proper resources, and the right partner, there are plenty of good reasons to consider level-funding.
Integrate your benefits
Integrating benefits for medical, dental, pharmacy and employee assistance has become increasingly common – and for good reason. Among the advantages of integrated health care plans are a better quality of care for employees, cost savings for employers and an easier process for everyone.
But not all integrated benefits are created equal. For example, the structure of your pharmacy benefits plan can make a significant difference in your costs. Understanding the prescription pricing and possible hidden costs in pharmacy benefit management can lead to educated choices that will pay off over time.
2. Look for plans with low-cost services
Low-cost health services are in high demand. During the COVID-19 pandemic, the use of telehealth skyrocketed. While this was out of necessity, people have come to appreciate the convenience of virtual care for a wide array of health needs.
Other options for low-cost health care include Virtuwell and Doctor on Demand. These two services require no appointments, making it even easier for employees to receive care when they need it.
You may be wondering how the availability of low-cost services impacts employer costs. Here’s how: when employees have access to lower-cost services, they are more likely to choose lower-cost plans with high-deductible HSAs. This translates to lower premiums for fully insured employers and lower claims costs for self-insured and level-funded employers.
Plus, access to low-cost, convenient options can improve the likelihood that employees will seek out and receive care when conditions are less severe and more treatable with lower-cost therapies.
3. Promote a healthy culture
During open enrollment or onboarding, employees choose a health plan based on their anticipated medical needs. If they’re healthy, they’re likely to opt for a lower-cost plan. That’s why finding ways to help your employees get and stay healthy is in the best interest of your company’s bottom line.
Ensuring that employees understand that their plans provide 100% coverage for preventive services is a good start. But there’s much more you can do to encourage healthy living, and it begins in the workplace.
People spend a large portion of their adult lives working. So, it makes sense that the workplace is a prime opportunity to encourage healthy behaviors. According to the Centers for Disease Control and Prevention, employee wellness programs provide benefits such as:
- Increasing healthy behaviors
- Improving health knowledge and developing the skills needed to improve health
- Encouraging employees to get preventive health screenings, immunizations and follow-up care
- Reducing on-the-job exposure to substances and hazards that can cause diseases and injury
HealthPartners makes it easy for you to help employees be active participants in their health. Our Living Well program provides a suite of solutions to meet employees where they are at, and encourages them along their health journey. Employees can take advantage of resources such as health education, lifestyle coaching, and healthy discounts on products and services.
Talk to your broker about options to cut costs and add value
Health insurance should be affordable to both employers and employees – but cost-cutting measures shouldn’t come at the expense of quality or a great experience for you and your employees. HealthPartners offers a range of cost-effective health plans in Minnesota, Wisconsin, Iowa, North Dakota and South Dakota, making it easy to provide your employees the best options for benefits. Learn more by talking to a broker about HealthPartners plans in your area.