These days, there may be enough evidence to support the idea that we're in a "new normal" of healthcare in our country. Health plan initiatives over the past decade have resulted in greater consumer knowledge, growing prevalence of patient-centered care philosophies at the provider level, and increasing acceptance of insurance plans with higher up-front deductibles that incent shopping around for affordable care. Oh yes—there’s that “Affordable Care Act” thing too.
Despite our best efforts, healthcare spending is still projected to grow at an overall average of 5.8% per year for the next ten years, according to a recent CMS publication. Not to mention, if the Cadillac tax stays as it is written today (that is, the Affordable Care Act’s non-deductible tax on high-cost employer sponsored health coverage taking effect in 2018), the years between 2020-2025 could bring unpleasant surprises to employers as healthcare trends outpace inflation. Said differently: Even if you avoid the tax in its initial years, it may come knocking shortly thereafter.
As an employer, there are only so many cost-reducing levers you can pull with your health plan design or contribution structure before your employees revolt. So whether you’re ready to or not, you need to be thinking creatively about your overall benefits program and exploring strategies that can limit cost in areas other than your health plan so you can more easily absorb future healthcare costs.
The future is now. Here are three smart ways to save on benefits today so you’re better prepared for costs to come:
1. Voluntary Benefits
There is a full spread of voluntary benefits available in the market today, from those that help employees pay for what their insurance doesn’t (critical illness, accident, and hospital indemnity), to those that provide longer-term financial security (voluntary disability and life insurance policies), to still others that are simply nice-to-haves (ID theft protection, legal services, and pet insurance).
Replacing employer-paid programs with voluntary options reduces your company's overall cost. Even if your employees may have to pay slightly more for unique options, in most cases they will definitely appreciate the fact that you’ve given them access to greater variety. Freedom of choice is a beautiful thing.
2. Total Mind and Body Wellness
Chronic stress is a precursor to many chronic diseases, and employees battle with all kinds of stressors—financial, family, and yes, medical—every day. Look to offer benefits that can help employees manage these stressors. Many carriers offer Employee Assistance Programs (EAPs) at no cost to complement their insurance offering and help employees deal with any number of personal problems. Other carriers now offer financial planning services at no additional cost as well.
Health risk assessments and biometric screenings are great tools to help employees find their health baseline and track year-to-year changes, but they’re point-in-time assessments. In most cases, they do little to inspire long-term behavior change on their own. Consider offering a support network of coaches that are available to help employees change their mindset and make lasting adjustments to their lifestyles.
Many of these benefits can be offered to each employee for an annual cost equal to or less than a preventive physical at the doctor’s office. It’s a small up-front investment that has the potential to reduce higher health-related costs down the road.
3. Benefits Technology
If you’re an employer working to manage your HR with paper forms, email-based requests, and manila-folder records circa 1990, it may be time to think about investing in some HR technology.
Installing a comprehensive benefits and HR tool can easily make you more productive by helping manage your records and allowing employees to make their own personnel updates to benefits enrollment. Plus, depending on the provider’s support, benefits experts can help you get the exact benefits your employees want. Put your time back into the HR initiatives that are important to senior management.
As with a well-designed health and wellness program, this is a small up-front investment that sets you up for future cost-savings. In this case, you’ll profit from increased efficiency over and over and over.
Back in 2010, most employers looked at the Affordable Care Act’s requirements and thought, “We’ve got time, we’ve got time.” Now, looking back on how that time flew by, we’ll be at 2020 before we know it. There’s no better time than today to start setting yourself up for success with benefits, preparing for the changes to come over the next decade, and hey, saving a little bit of money while you’re at it.