Are Rising Healthcare Costs Negatively Impacting Your Company?
When is the last time you reviewed the group healthcare benefits you offer your employees? For most employers, group healthcare is the single largest expense. But, if you take the time, you may just discover that changing up benefits can yield a huge savings for your company, and give your employees better healthcare options. Rising healthcare costs can be costly if left unchecked.
Alternatives to Combat Rising Healthcare Costs
The National Business Group on Health’s annual survey found that employers rank the cost of “specialty pharmaceuticals” as the top element that drives cost increases. These pricey new treatments – in the thousands or tens of thousands of dollars per treatment – are for conditions like diabetes, asthma, and immune disorders.
Some employers try to combat the high cost of pharma by managing where patients receive these high-priced medicines since cost of treatment can vary depending on where it is administered. Other employers offer high-deductible plans to try to control costs across the board.
Consumer-driven healthcare enables employees to use a health savings account (HSA) and fill it with tax-deductible savings. There are limits on the amount of contributions that can be made annually for individual and family coverage, but HSA balances carry over from year to year. Plus, withdrawals are tax-free if use for qualified medical expenses.
Offering options like HSAs to employees is a cost-cutting measure for employers, and a major benefit for employees, who can control how and when their group healthcare benefits are used.
Group Health Insurance Plans That Save Employers Money
There are many options for group health insurance, so it’s natural to have concerns that you aren’t making the right choice for your business, employees, or bottom line. But there are health insurance plans that can reduce your costs, two in particular:
- Level-funded health insurance: Also known as partial self-funding, the level-funded health insurance plan allows healthcare expenses to be spread evenly over 12 months. Because of this perk, group health insurance costs are a predictable expense. What if there are overage claims? Stop-gap coverage saves the day. Plus, if the premium you have paid into your fund is unused by the year’s end, you get a company refund.
- Self-funded employee health insurance. Instead of paying a monthly premium as with traditional group healthcare plans, in a self-funded employee health insurance plan the employer pays for employee claims as they are incurred. If you have an especially healthy year, that’s a boon for your company. If an employee develops a serious illness and the medical costs to go along with it, the risk, of course, is there. However, knowing that you must reserve funds in the budget to manage claims means that, if you overbudget for claims, you’ll have a surplus of funds. That’s always nice to see, and the smart thing to do is roll those funds right back into your health plan for even more of a cushion, or provide perks like an on-site fitness center or nutritious meal options to keep your employees healthy.
Give Your Employees Healthcare They Understand
To explain the excellent benefits offered to your employees, you must understand the benefits that your company gets first. Take the time to figure out what’s really working within your business when it comes to group healthcare, and where things could be improved. Contact The Benefits Group today to align yourself with a dedicated Michigan employee benefits expert.