Work with your provider
Work with your health insurance provider to decide what the best options to your budget will be. Negotiating rates with insurers isn’t usually effective, as insurers aren’t offering massive discounts because of the economic downturn. The option you usually have is a different plan with reduced coverage.
One option is cost shifting to save the company money while increasing the cost to employees. But altering plans and shifting costs to employees isn’t solving the problem of high premiums. A Hewitt Associates LLC executives’ survey shows that participants found cost shifting didn’t bring out desired behavior changes in employees and that an emphasis on health at the workplace is needed.
Another money-saving health care option is risk sharing.
“The key is to design the risk sharing among the employer, the employee and the insurance carrier, based on the employer’s risk tolerance,” says Dell Kubler, vice president of Swerdlin Benefits Co. “Health actuaries can quantify these risks by costing alternative risk-sharing scenarios. New market tools provide the opportunity to lower health insurance premiums and reduce an employer’s overall health care budget.”
A third option is a health savings account, which takes money out of an employee’s check pretax and the employer has the option of adding money to the account, as well. If the employee switches jobs, he or she will take this health savings plan to the new position and the employer will retract its contribution from the fund.
“Health savings accounts are typically more beneficial to a person purchasing single insurance and not for an entire family,” says Staycee A. Benjamin, program manager of employer consulting and worksite wellness for Kaiser Permanente of Georgia. “This isn’t the most receptive form of insurance for most lifestyles.”
While health promotion — or wellness — programs aren’t usually at the top of the list when contemplating short-term health insurance savings, a program will have positive results in the short term with the best outcomes in one to three years. Companies that effectively promote health see immediate savings in premiums of 10 to 13 percent with the potential of reducing future medical costs. The investment has a $3 to $6 payback on the dollar.
Your best bet to cut costs will be a two-prong approach. Change your health plan for instant budget relief and initiate a health promotion plan.
“If you have 70 percent or more participation from your employees [in a wellness program], your insurance rates will drop,” Benjamin says. “You need to make health care goals that help you today and in the future. Moving furniture around to disguise the real problem isn’t a solution.”
Regardless of the plan you choose, to save now and in the future, you must have healthier employees.
Design your health awareness plan with consideration of the number of employees that will be participating. A smaller company of 50 employees or less shouldn’t invest more than $25 per employee initially, but should focus on raising awareness by providing educational material that emphasizes preventive care, proper nutrition and health-related Web sites.
A midsized company of 300 or more employees should invest about $90 per person. Providing educational tools, focusing on the population’s main areas of concern and taking a competitive, fun approach is effective. A large company with a willingness to invest about $240 per employee can have a comprehensive program that includes education, financial incentives, inclusion of spouses and perks like gym memberships.
Your insurance provider may have free online health risk assessment surveys. By surveying your employees you can determine ways to meet the company’s and employees’ financial needs. Ask questions about physical activity, stress management, tobacco use and general disease risk factors.
“A health assessment will measure blood pressure, body mass index and glucose levels as well as surveying employees’ health concerns,” Akahoshi says. “Make sure employees know all health information is confidential as some show concern about job loss once they comply.”
Discussing what your insurance company provides to you at no cost or at reduced rates is a great first step. Many employers are unaware of fringe benefits included in their plans. If the insurance provider doesn’t offer what you need for free, it should be able to direct you to an organization or local hospital program that does.
