Cost Containment Strategies
More than ever companies are looking to lower their rising health care costs and improve their employees’ overall health. When human resources professionals look toward the future they are evaluating strategies to help manage both short- and long-term costs. Arizona Benefit Consultants offers a variety of strategies to mitigate and manage these expenses. Effective strategies will combine a creative approach to plan design alongside a benefits centric company culture.
Traditional Plans VS Consumer Driven Health Plans (CDHP)
Traditional plans such as PPOs and HMOs can be creatively utilized within an overall benefits package, but they leave the insurance provider in the driver’s seat. Consumer Driven Health Plans such as Health Savings Accounts (HSA) and high deductible plans can provide significant cost savings for both you and your employees by putting the employees in the driver’s seat.
Healthcare Reimbursement Arrangements
An excellent midway point between fully insured and partial self funding. The employer assumes less risk, but for lower potential savings.
Defined Contribution Plans
More and more employers are encouraging the efficient use of health care by offering Defined Contribution medical plan arrangements. By fixing employer contributions at a certain level, rather than promising a specific benefit regardless of cost, employers stabilize their operational cash flow while continuing to offer a valuable benefit to employees. Employees use that money to buy or help pay for a health insurance plan they select for themselves.
Instead of having employees pay a copayment of $10 or $15, require them to pay a percentage of their health care expenses (known as coinsurance). This may make your employees more aware of their health care expenses.
Preventive Care Benefits
Encourage employee use of preventive care benefits, including appropriate screenings and vaccinations. Emphasize that these services are at no cost to employees.
Catering to Individualized Needs
Offer voluntary benefit options that meet personal and family needs such as homeowners, automobile and group life insurance. Also, offer discounts on vision, dental, massage therapy, chiropractic care, health club memberships and weight-control programs.
Choosing the right medical benefit offering is only a piece of the puzzle when it comes to containing your costs. It is important to also look at your funding methodology and determine if it is meeting your goals. Funding Options range from fully insured (transferring all risk) to partial self-funding (accepting small risk) and additional strategies within the funding paradigm. The alternative funding landscape offers opportunities for employers to evaluate their risk tolerance, plan strategies and ultimately cost savings as they consider the various levels for funding their employee benefit plans.
Why Should You Self-Fund?
In the presence of rising health care costs, self-funding is becoming more attractive to more employers. Arizona Benefit Consultants has the necessary experience to help most companies switch to a self-funded model, including those with as few as 20 employees.
Align Your Goals
Weave business goals with health goals and devise a way for individuals or departments to lose weight, start exercising and/or stop engaging in unhealthy habits. Use marketing techniques that will motivate employees to take action.
Analyze Dependent Coverage
Pay close attention to the spouses and dependents that employees enroll for benefits. Some companies require employees to pay higher premiums if their spouse can obtain health coverage through his or her employer. Conduct an eligibility audit to validate that dependents are legal dependents and remove ineligible dependents from the plan. Some plans are also starting to charge more for dependent coverage.
Many businesses are choosing to re-evaluate their overall benefits strategy in light of health care reform and other developments.
Rewards for Good Health
You can offer financial incentives and discounted rates to employees who have healthy habits and lifestyles or those who participate in wellness programs at work. Penalize workers with higher premiums for engaging in unhealthy activities, such as smoking.
On-site Health Centers
Offer on-site health centers and staff health coaches to provide advice on personal health needs and make seeking care more cost-effective and convenient.
By executing a comprehensive strategy you ensure making the right choices in plan design, benefit offerings and contributions. Implementing these health strategies and professional vendor management can help reduce costs and promote a healthier workforce.