7 Ways to Lower Healthcare Benefit Costs Without Decreasing Coverage
With the increasing cost of healthcare premiums, HR professionals must continually look for ways to cut costs in ways other than shifting the full increase to employees.
Many employees are already feeling a stretch in their pocketbooks from increases in their share of benefit costs over the past few years.
#1 - Preventive Care Visits - The first way companies can actually save money is to cover preventive care visits at 100%. While this may seem like it would increase costs, in the long run, companies will save costs because employees and dependents will go to well-check visits and doctors will be able to head off serious issues ahead of time, rather than after a condition has fully developed.
#2 - Shop Around - In today's competitive market, all companies are looking for ways to increase customer retention and this includes benefit companies. If a benefit contract (including medical, dental, vision, disability, and life insurance) is up for renewal, start shopping around and getting quotes. Companies may find someone else who is willing to beat the current rate or may find the current provider willing to offer discounts to retain the contract.
#3 & #4 - Obtain a separate Prescription Plan and Require Mail-Order Maintenance Prescriptions - rather than having the company's HMO or PPO plan handle prescriptions, companies can also choose a separate plan that only handles prescriptions (such as those offered by Medco or Caremark for example). These plans can reduce the cost of medications by offering volume discounts and different formulary options. Employees can also benefit from the mail order services for maintenance medications, which can reduce their copays when compared to filling a monthly prescription at a local drugstore (and reduce costs by forcing generic choices approved by the prescription plan).
#5 - Doctor Visits by Phone - companies can also purchase plans that allow employees and dependents to speak with a doctor via the phone, rather than in-person. They can call a toll-free number, complete a health history, and then receive medical advice for common, non-life threatening conditions. The patient still gets the medical information needed, but at a much lower cost than a visit in the office (or even worse, at urgent care or the emergency room).
#6 - Conduct an Audit of Covered Dependents - this solution can be difficult to manage as employee reactions may not be positive, but it can also save a company money. Basically a company informs employees that they must provide documentation showing that each spouse and/or child on the employee's benefit plan, truly is related and meets the company's guidelines. For example, if the company's plan only allows spouses and blood-related children on the plan, they could discover that an employee has added a domestic partner or the partner's child to the plan. Employees, especially those who have something to hide, may have strong negative reactions to this audit and try to convince everyone that the company doesn't trust employees. However, if the audit is explained ahead of time and benefits to employees are also explained, most will be understanding.
#7 - Offer financial incentives for healthy behavior - with this option, companies can offer discounts, such as gym reimbursements for a certain number of visits per month, or lower premium costs for non-smokers compared to smokers for example. The company can try to shape healthy decision making by providing financial benefits to employees and their families.
All of these options can provide ways to decrease benefit costs without making substantial cuts to the coverage that companies are offering to employees. They just require a bit of creative thinking and strong communication strategies with employees as they are implemented.
Adapted from article by Kris Dunn