There are many moving parts to reducing health care costs, but one expert believes employers should focus on five benefits strategies for 2011.
"Employers are not only struggling to comply with new health care regulations, but they are also looking for every possible way to save money on rapidly rising benefit costs," explains Jeff Slay, founder and CEO of Neovia Integrated Insurance Services, a California-based consulting firm.
"Company leaders need to identify real world solutions that allow them to offer a compassionate approach to health care for employees, while aggressively managing the bottom line," he adds.
In Slay’s words, employers should consider the following:
Understand why costs are rising: Advances in medical treatment and technology are contributing factors to rising costs, along with employee lifestyle choices and inefficiencies of care. Cost shifting from the uninsured and underinsured to private payers has also had a major impact on health expenditures.
Look at the impact of health care reform: Companies will have to understand all the new provisions set forth by PPACA and make sure they are in compliance with the new regulations.
Though costs related to health care reform are expected to rise 10% in 2011, employers will likely reduce that to 6% through health plan changes.
Know how your benefits compare to peer companies: To stay ahead of the curve, employers must understand how other companies similar in size and industry are spending their health care dollars. Do they pay for 100% of employee benefit costs? 50% or less?
If you’re providing a different level of coverage than your peers, it could be time to reexamine benefit levels with an expert consultant.
Be aware of the wellness impact: More than 75% of health care costs are spent treating chronic conditions, from which nearly half of all Americans suffer. Respecting health privacy concerns, employers should analyze claims data to help develop awareness programs and encourage wellness among employees—like smoking cessation or weight loss.
More than half of all health care costs are directly related to personal lifestyle choices, so incentivizing healthy employees can drastically reduce overall health expenditures and create a healthier, happier workforce.
Fixing the broken health care system requires a three-pronged approach: Employers must comprehend the enormous value of the wellness impact; use sophisticated financial modeling and analytics to make wise benefit decisions; and advocate for employees and dependents as they navigate often complex benefit issues.
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