Health insurance cost increases are an unfortunate fact of our modern work environment. And there is a direct connection between the rise in claims/usage and increase of insurance premiums for both businesses and their employees.
There are many factors that influence employer health plan costs. Contracts with provider networks, increases in prescription drug costs, general cost-of-living increases and the recent pandemic have all contributed to higher costs. In addition, the general health and wellness of a company’s employees is also an important factor.
Smart Business spoke with Scott Helmer, associate director, marketing and communications at FirstLine Benefits about employer health care benefits and ways to reduce costs for both employers and employees.
How can employers lower their health plan costs?
Companies can help lower costs by becoming catalysts in preventive health engagement and by promoting healthy habits. Changes companies can make include simple things like offering healthier food/beverage options in workplace kitchens and cafeterias or encouraging breaks where employees move around (walks with co-workers). Many companies utilize incentives to prompt their employees to take a more proactive role in managing their own health: i.e., health screenings or increasing levels of exercise.
Another way of engaging with your employees is for the company to provide health-related kits that help employees improve certain aspects of their health, either as part of their standard benefits or as stand-alone offerings. This approach provides the dual benefits of tangibly supporting your company’s desire to help employees take a proactive approach to managing their own health goals, as well as the unexpected delight of receiving a package of these items. Asking someone to take steps to change habits is an entry-level way of trying to empower; sending actual items that support healthy habits takes the dedication to employee support to a new level.
As an employer, expressing support for employees results in greater employee loyalty and engagement. Absenteeism also declines when employees feel their employer truly cares and supports them in meaningful ways. These factors may help lower health care costs, plus add value in higher employee retention.
How do employers report the changes to have their plan costs reduced?
Incentive programs aimed at preventive screenings, which may catch disease early when it may be easier — and less costly — to treat, can be used to leverage reductions in coverage rates. Any reportable data can be used to start conversations with your company’s health plan provider. Asking employees to share wearable device data can also be used to help support improved healthy habits. As a tradeoff to get this data, incentives that lower the employee’s health insurance costs provide a win-win for both employee and employer.
How can employers encourage employee health choices that lower costs?
Cash or other reward incentives have been a helpful tool in motivating employees to take more responsibility in managing their health. While these have proven to be effective, there are other ways to help get people on improved health paths, such as empowering employees with tools and/or services to help set new health behaviors. Many employers have added to their benefits offering things like mental health services and chiropractor or acupuncture coverage. Select targeting of specific health-related topics can include providing your employees with items to help them maintain or improve their health. This could include food scales for portion control or resistance bands for exercise, which can help give people the nudge they need to start — and stick with — healthy habits.
Solving health care cost issues is a sensitive and complicated topic. There is no one lever an employer can pull to enact major shifts to their health plan costs. Finding solutions requires a willingness to pursue many tactics — experimenting with emerging and evolving behavioral strategies that help your employees take control of their own health journeys. ●
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