This time of year, a large number of employers find themselves contemplating their employee benefits packages as they approach open enrollment and the beginning of a new plan year. The goal for most companies is to lower costs and improve employees’ overall health — something that is far too often easier said than done.
As health care premium increases continue to surpass the rate of inflation, both employers and employees are suffering. Health care costs have risen to the level that employers are forced to closely examine their benefits offerings. Unfortunately, their concerns are not limited to just costs.
At most companies, employee benefits programs look very different from how they did five years ago. Even if the plan offerings have not changed, employee cost sharing is probably different, administration is likely more complex and insurance carriers may have changed. Every year, as employers react to increasing costs and complexity, somewhere along the line, the benefits program can drift from its original intent.
Health care costs have risen almost 10 percent annually since 1998. Employers cannot afford the rising costs and employees cannot take much more cost shifting. Some companies have been forced to cut benefit plans or reduce costs in other areas of the company. Proactive companies are scrutinizing health care costs in the same manner they scrutinize any other business expense. They are being strategic in their offerings and demanding employee accountability within the health care cost equation.
“Add to this the current state of the economy and it’s no wonder recent studies show a rise in stress-related illnesses that result in more health care usage and, ultimately, increased health care costs,” says Amy Broadbent, the vice president of JRG Advisors, the management company for ChamberChoice. “Trying to combat this vicious cycle is difficult.”
Smart Business spoke with Broadbent about employee benefits and ways to lower health care costs while improving employees’ health.
How can employers help offset rising health care costs?
Employers must be more creative than ever as double-digit increases are predicted to continue. Projections indicate employers will continually contribute less toward health care premiums, but they need to find a way to support a reasonable portion of these costs in order to retain quality employees and attract new employees. Strategic planning and the implementation of cost-containment strategies are more important than ever.
