Health benefits costs have been on the rise in recent years and are predicted to continue trending in that direction this year. Employers anticipate they may experience a 5% increase in health plan premiums this year, according to a Willis Towers Watson survey.
How can you prepare for the rising costs as an employer — and how can you best serve your employees? Here are four strategies to reduce benefits costs this year.
Ways to Minimize Health Benefits Spending
1. Alternative Plan Modeling
In an alternative plan, you’ll increase employees’ share of expenses. While often this takes place through premium increases, you run the risk of losing employees to companies with better benefits options. With alternative plan modeling, rather than a traditional health plan, you can come up with a different design approach to your benefits package.
Alternatives might include:
- Consumer-driven health plan models, featuring a high deductible health plan with savings options included
- Self-funding models that are funded and managed by an employer vs. a carrier
- Reference-based pricing models, which are self-funded health plans that include set spending limits on shoppable service offerings
- Level-funding models are self-funded plans where an employer pays a certain amount to a carrier for claims but any leftover is refunded at the end of the year
- Direct contracting includes partnering with doctors and facilities who value a community driven plan and understand the importance of transparency in costs and outcomes
If you’re looking to embark on an alternative benefits plan, feel free to contact me or the rest of our AssuredPartners Cornerstone employee benefits team with questions. AssuredPartners Cornerstone helps you focus on high quality, low cost options to improve employee outcomes and reduce overall costs.
2. Health Care Literacy
Perhaps you have a great employee benefits package — but do employees know how to take advantage of it? When employees feel empowered and educated about their benefits, they’re more likely to save money and improve their well-being. Try giving employees the questions they need to ask to be more informed patients and benefits users, like:
- Can I be treated in an equally effective, yet less expensive, manner?
- How much will this appointment cost?
- When should I visit an emergency room instead of an urgent care facility?
By investing in employee education now, you can potentially save down the road because employees will be healthier and need to spend less on medical expenses overall.
3. Telemedicine Solutions
Telemedicine, or telehealth, options have become increasingly popular since the COVID-19 pandemic began. Only 11% of U.S. consumers utilized telemedicine in 2019 — that number was up to 46% in mid-2021 according to McKinsey and Company.
For employers who are curious about telemedicine offerings, consider providing it to your employees in their benefits package in a limited capacity. This could look like employees seeing their doctor in person for an annual checkup but following up with them in the future in a virtual setting. If employees find that to be helpful, you could expand telehealth offerings down the road.
4. Prescription Drug Policy Revisions
Health plans also offer a significant benefit with prescription drugs, but navigating prescription drug prices can be overwhelming. There is a wide range of brands available for prescription drugs. Most individuals opt for brand-name only, disregarding the savings a generic brand can offer them despite the medication and dosage remaining the same.
It’s important your employees know to ask their doctors for alternative options including generic brands. This more affordable option can decrease prices for everyone. Another way to control this needless spending is to require your employees’ health plans to cover the generic options prior to the more expensive brand names. Additionally, AssuredPartners Cornerstone can work with you and Pharmacy Benefit Managers to help keep your employees’ prescription drug costs down.
How AssuredPartners Cornerstone Can Help
AssuredPartners Cornerstone can help you reduce health care expenses. As employers, you should prioritize maximizing your health benefits plan but ensure it’s affordable. Our skilled team can provide employee benefits administration to offer a plan that benefits the needs of all of your employees.
If you have any questions about how you can reduce health benefits costs and how it affects you or your employees, contact AssuredPartners Cornerstone today.
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