13 employer tips: Getting more value from your employee health insurance

If you’re an employer, you’re likely struggling mightily to hold down the escalating costs of employee health care.

Call it a perfect storm. Just as the scarce labor market is making it easier for workers to selectively choose employers, employer-sponsored medical and pharmaceutical benefits are slated to rise another 5% in price this year for the sixth consecutive year. In fact, the average American is expected to rack up $14,800 (including premiums) in healthcare costs in 2019 — and employers will cover some 70% of that.

Competition for talent aside, that trend is “unaffordable and unsustainable over the long term," advises Brian Marcotte, CEO of the nonprofit National Business Group on Health. "We may be at a tipping point in terms of cost-sharing with employees," he recently told SHRM. This year, he notes, the number of employers offering CDHPs (traditional healthcare insurance policies) as a sole option will drop from 39% to 30%, "reflecting a move by employers to add more choice back into the mix.”

One of the most effective solutions for spiraling insurance costs is to offer voluntary benefits in conjunction with high-deductible health plans (HDHPs). By using group buying power to offer workers manageable prices on extra healthcare policies such as accident, cancer or disability insurance, employers create a win-win scenario. Workers can choose to cover themselves for a greater range of medical contingencies without their employers trying to bear the weight of unprecedented healthcare expenses.

Some other ways for employers to contain healthcare insurance costs? Consider the following suggestions when shopping for providers, evaluating offerings and establishing best practices at your company.

  • Conduct a health care claims utilization analysis to better identify the top health concerns of your workforce — then select offerings accordingly.
  • Offer employee wellness programs that encourage physical, emotional, social and financial health. To date, the most common chronic conditions affecting the workforce are diabetes, musculoskeletal issues and mental/behavioral health issues. “If you enroll people in a metabolic syndrome or prediabetes program, help them lose 4% to 5% body weight and decrease their chances of developing diabetes by 80% over six years, that’s the kind of program that can make people’s lives better — but also has an opportunity to save the company money over several years,” writes Alan Kohll in Forbes.
  • Consider offering HSAs in conjunction with HDHPs. HSAs, which can be rolled over from year to year, allow workers to stash away tax-free money for miscellaneous healthcare expenses.
  • Look for insurance models that connect doctor and hospital payments to evidence-based outcomes. The most cost-effective models home in on efficient care that focuses on preventing complications or recurrences, according to a Willis Towers Watson study.
  • Seek providers that offer bundled-payment approaches and combine pre- and post-procedural care into one negotiated (often cheaper) price.
  • Require prior authorization on specialist treatments to help confirm they’re medically necessary.
  • To help control usage of expensive specialty drugs, steer coverage toward cheaper biosimilar drugs that can be administered at home or at doctor’s offices instead of hospitals.
  • Contract for telemedicine through which employees can get 24-7 evaluations, diagnoses and/or treatment at minimal cost. Such interactions can solve for 70% of all conditions that would otherwise necessitate office visits, according to Benefits Pro.
  • Arrange for 24-hour nurse advice lines through which employees can get free answers to health-related questions and head off visits to pricey urgent care clinics or emergency rooms.
  • Implement a rewards program through which employees are incentivized to choose cost-effective procedures and/or facilities.
  • Optimize data and anecdotal employee feedback to draw meaningful conclusions about the ROI of your current healthcare arrangements and policies.
  • Consider investing in a health care guidance platform that can help you and your employees compare vendor prices and access other meaningful data about healthcare options.
  • Larger firms of more than 100 employees may wish to consider self-funding their basic health care policy using a broker and a third-party administrator.

Finally, don’t hesitate to shop around for optimal value when it comes to your benefits vendors. A company like Ochs can help you get the most for your money when it comes to voluntary benefits such as emergency insurance, disability insurance and critical illness insurance. Call us at 651-665-3789 to learn more.