Managing Employee Benefits Keeps Getting More Complex
What's new in the world of employee benefits? A shows family coverage premiums increased an average of nine percent this year. This increase drove costs to almost $5,429 for single coverage and $15,073 for family coverage.
This survey is at odds with a Mercer survey, however, which found significantly smaller increases. No matter how much your benefits costs are increasing, there are several areas your company can target to reduce costs.
Controlling Prescription Costs
Managing your pharmacy spend is an area where business owners can reduce costs. Another recent survey by Midwest Business Group on Health in Chicago found that one quarter of employers had little understanding of their “specialty” pharmacy options and slightly more than half understood these options only moderately.
Specialty pharmacy consists of drugs prescribed by specialists in diseases like hepatitis C, cancer, rheumatoid arthritis, and multiple sclerosis. These drugs can run from $1,600 per month to up to $300,000 per year and currently comprise 24 percent of some employers' prescription drug-related costs.
Costs for these specialty drugs continue to rise each year. To manage this cost, employers now can turn to specialty pharmacies, which discount the drugs and provide special shipping and handling. They also provide patient education and proactive management, which helps ensure patients correctly administer their medications to avoid overuse and drug-related complications.
An Ounce of Prevention
Adding voluntary benefits like wellness initiatives and gym memberships can also help reduce employee benefits costs over time, many experts believe. Strong employee assistance programs (EAPs) can help employees faced with life challenges like financial concerns, aging parents, and children run wild. EAPs can help reduce medical costs if employees turn to counseling and other EAP programs -- rather than wait until the stress toll makes them ill.
Educating Employees to Shop Around
Encourage your employees to “shop around” for medical care. The greater the percentage employees pay in copayments and deductibles, the more inclined they will be to ask doctors what procedures cost at their facilities.
In one town, according to an article in The Healthcare Blog, the cost of an MRI varied by 650 percent. The patient, your employee, is not trained to negotiate medical bills, and they may not even know where to begin to learn what procedures cost. The nonprofit Robert Wood Johnson Foundation, however, hopes to change that. It recently released a database that allows consumers to research the cost and quality of healthcare in their region.
No matter what challenges in benefits administration you face as an employer, better communication is the key, both within your organization and with the broker you select to assist you. Many organizations, including health carriers, are uncertain about what future federal regulations hold in store. No matter how federal health care eventually plays out, however, health care costs in America are still predicted to climb.
Working with brokers who can leverage their clients with carriers, and who can help you better portray your employees’ aggregate group health correctly to an underwriter, is imperative in these turbulent times.
