The costs of benefits

shelby_o

Does anyone have any big ideas on helping to stem the fast-rising costs of benefits? My company needs to offer solid benefits plans to be competitive, but we are finding it harder and harder every year. 2007 seems to be more of the same...

BarbieW

The annual increases in the cost of employee benefits is one of the biggest challenges facing comp and benefits managers like me. We have taken alot of steps including increasing the employee-paid portion of the premium, increasing copays, implementing prescription drug formularies, and introducing flexible spending accounts. These things have helped, but we do seem to be running out of options!

6241789

We have gone to a HSA and it has helped in offsetting our high deductable.  What I have found is if Broker A cannot find a competitive bid I go to Broker B or C until we find a plan that fits within our budget and one that is good for our employee population.  If you get an aggressive broker it does make the difference in cost.

Curn

As with many things, there is not quick fix.  My suggestion is to take a macro approach versus micro.  Designing a plan/HR policies/communication that specifically addresses the health should eventually have an impact on the rates-varying degree of impact based on demographics of your company.  For example, I worked with a hospital group that did not have a large differential between their office visit co-pays and their ER co-pays.  Employees would take their lunch break and walk over to the ER instead of taking time off and scheduling an appointment with their physician.   As a result, the group's claims experience was astromically high for ER visits and the employee only had to pay an additional $10.00.   Many employer's are designing plans that waive co-pays for preventive care resulting in an incentive  for employees to take care of their health, or implementing mail order prescription drug co-pays for a 90 day supply for maintenance drugs, wellness programs with smoking cessation, fitness memberships, etc.....  Overall, it is my belief that education and awareness are critical in a successful benefits plan.  Helping employees understand the value of all plans (medical, dental, disability, financial planning, vision, personal time off, holiday, compensation, etc...) cohesively is the key.  Pricing is very important but finding a good broker that takes a macro approach will help you achieve solid benefits that are competetive and sustainable.  Hope this is helpful and best of luck to you.

ERISAmaven

I was just reading an article which said that the last resort for employers trying to reduce costs is co-insurance where a beneficiary pays a percentage of the cost of the services being provided rather than a fixed copayment. This way employees know exactly how much their medical care costs and, in theory will make more rational decisions about how much and what kind of care they need. On the down side, a beneficiary might make a decision to not get a test or a treatment based on financial concerns and later become sicker because of lack of treatment or a failure to diagnose.