Health care costs have been trending upward over the past few years. As a business owner, you know that the costs associated with your employee benefits package are a line-item, which continues to increase with little to no return for the investment. With the uncertainty of COVID-19 on the workplace and its effects on the economy, now is the perfect time to review your benefits program and see where you can make positive changes.
Here are five ways you can address these rising costs in 2021:
- Really dig into your healthcare costs. As you operate your business, you continuously look for ways to lower your expenses on everything from paperclips to your COGS. So why don’t you do the same with your employee benefits costs? Take the time to look at everything: your insurance premiums, employee use, wellness initiatives…EVERYTHING. You may discover that your employees aren’t using their preventive care benefits. Or you’ve been offering a smoking cessation plan, and none of your employees smoke. Or maybe your employees’ risk tolerance has changed. You won’t know these things unless you really dig deep into your healthcare benefits and take the time to review your findings with your employee benefits advisor.
- Embrace technology. Healthcare usage has changed. The use of virtual health, including the ever-evolving “telemedicine” trend, has made access to healthcare easier…and cheaper. These methods have improved the ways your employee use their healthcare benefits without the costs of in-person visits. Further, the use of personal wellness apps, individual healthcare apps (think glucose monitoring via app), and online portal coordination among a panel of healthcare professionals are becoming more and more popular during this age of COVID – and these changes are likely to be around for a while.
- Consider alternative plan options. Not all healthcare plans are created equal. What works for one group may not work for another. Also, trends change. For example, no so long ago, PPO’s were all the rage. Now High Deductible Health Plans (HDHPs) are becoming more popular. This trend highlights your employees’ consumerism and a more proactive approach to managing their healthcare options. Also, HSA’s, FSA’s, and HRA’s can help shift the costs of healthcare to your employees’ control. It’s important to review your plans with your employee benefits advisor to find the plans (and the tools and resources) that serve you and your employees best.
- Require active enrollment. Many employers allow employees to enroll in their annual benefits plan passively. Employees who do not actively participate in the employee benefits selection simply renew “as is” or with whatever you as the employee provides. But if employees are required to participate in Annual Enrollment actively, this forces them to review benefit options. Employees are required to check the benefit options available to them and their lifestyles, and to make decisions that will save them money…and their employers as well.
- Change the funding structure. One drastic change in lowering healthcare benefits costs is to review the funding structure of your benefits offerings. Electing a plan that is 100% funded by insurance is the most costly. Self-funded plans, however, are trending and deserve some review. In a self-funded plan, the employer does not pay premiums; instead, it delivers a mix of fixed and variable costs associated with the healthcare plan. The employer assumes the risk of the healthcare plan but also has much more control and freedom in plan designs.
Don’t let your 2021 Annual Enrollment come and go without truly reviewing your healthcare benefits costs. Contact a Davis Dyer Max, Inc advisor for more help to review your options to make this employee expense bring some benefit to your bottom line.