4 Tips to Reduce Benefits Costs While Increasing Value

The rising costs associated with providing healthcare benefits is one of the biggest concerns for today’s employers, and for good reason. According to Kiplinger, 2019 marks the sixth year in a row of significant healthcare cost increases — and healthcare costs are up a whopping 5% this year over last year. The costs are projected to rise again which can have employers wondering where they can make cuts to keep healthcare costs in line with revenue. These four tips will help you reduce the overall cost of healthcare for your business through simple suggestions such as expanding flexible contributions without a negative impact to your staff members.

 

Educate Your Employees about Flexible Contributions with HDHP

High-deductible healthcare plans (HDHP) may be poorly understood by staff members and even HR teams, but this relatively new option for healthcare can be a boon for both staff members and the organization. The reduced upfront costs associated with this type of plan can dramatically reduce the cost of healthcare for the organization, and it can also encourage staff members to be more active participants in their care. With an HDHP, members are more likely to understand the costs associated with their healthcare and take steps to use the plan only as needed to maintain excellent health.

 

Be Selective with Design of Your Pharmacy Plan

High-value pharmacy is one of the largest drivers of cost into your plan, along with the expected items such as the cost of cancer treatments and kidney disease. While it’s difficult to control the costs of long-term illnesses, you can help reduce the costs associated with medications. Encourage staff members to look at generics instead of specialty drugs, Adjusting the formulaic of your pharmacy plan can provide you with significant savings, by shifting the tiers of medication that are available as part of the plan. This shift can help staff members improve their overall health levels by actively reviewing their current and future medications.

 

Maintain Value by Staying with Medical Carriers for Several Years

While conventional wisdom may encourage human resources teams to review medical carriers each year with an eye towards getting the best possible solution, you might actually improve your costs by staying with the same medical carrier for several years. If you’re able to negotiate a longer-term contract, it could encourage your carrier to offer reduced costs based on a longer contract term. Plus, many carriers will reward loyalty, matching or even exceeding the terms offered by competitors. When you work closely with your healthcare provider team, encouraging this type of open and honest conversation will improve the overall business relationship and keep costs under control. It is much easier and less expensive for healthcare carriers to retain clients each year, giving them an added incentive to create longer relationships.

 

 

Encourage Staff to Take Part in Wellness Programs

While all of these suggestions will help reduce the costs of your overall healthcare, perhaps the best option is to encourage staff to take part in incredibly proactive wellness programs. These programs can help manage long-term illnesses such as diabetes and heart disease, with active check-ins on a regular basis that will help employees stay alert for any changes in their overall wellness. This type of program is also a great recommendation for staff with other challenges such as weight control and smoking, as the regular awareness of the dangers of their condition can help encourage positive change for the future.

 

This type of disciplined wellness program helps employees stay in touch with the benefits of improving their health, creating a positive correlation between wellness and the costs associated with their healthcare. This proactive approach provides staff members with ongoing touchpoints with encouraging interventions and education. Many organizations are seeing success with this type of approach.

 

Creating a positive environment for your staff members starts with offering exceptional benefits, and health benefits are highly valued by staff members. When you want to learn more about keeping costs under control while still providing your employees with high-value healthcare benefits, contact the professionals at SMD at 510-895-4800 for more information about our healthcare solutions. You can also download our free guide to benefits today: “A Small Small Business Tool for Employee Benefits Contributions.”