Evaluate Your Options
The first step to identifying ways to save money is to look at your current, traditional insurance plans and seek ways to reduce costs. Many employees prefer traditional plan options above all else, but that doesn’t mean that you have to bear the burden of the rising costs. Look for savings by considering new insurance plans or moving to a different insurance provider altogether.
Switch to a Different Plan
Many employers believe that the key to providing affordable health insurance to their employees is to offer many different plans and tiers of coverage. However, more options aren’t always better. Many employees will default to choosing the most expensive PPO plan believing it to be the “best” for their needs, inadvertently costing themselves and the company more money than is necessary.
Consider offering other plan types beyond your standard Preferred Partner Organization (PPO) plans, as these are generally the most expensive option since they allow employees to visit any healthcare provider of their choosing. By comparison, Exclusive Provider Organization (EPO) and Health Maintenance Organization (HMO) plans pass savings along to you by creating a set list of healthcare providers for employees to use.
Move To a Different Insurance Provider
A pitfall that many employers find themselves falling into is sticking with a health insurance provider just because they have worked with that company in previous years. This may be due to the company having rates that were once the best on the market, or could just be for convenience. Keep in mind, however, that you could be losing money by sticking with the same company year after year.
It is always worth checking to see if another insurance provider can offer you a better rate for health insurance. Most companies do increase their prices from year to year. You’ll want to look for providers that keep the increases to a minimum or otherwise offer deals or competitive plan options that may be better than what your current provider offers.
Consider Health Insurance Alternatives
With the many tiers of health insurance typically offered by employers, many young and healthy employees have become overinsured. In many cases, this causes both the employee and their employers to annually overpay for health insurance. On the other hand, these same employees might choose to enroll in less expensive tiers of insurance if they were made aware of health insurance alternatives that could act as insurance supplements.
Alternatives or supplements to traditional health insurance can save you and your employees money in the long run. This is because most alternatives allow employees to enroll in the lowest tier of employer-offered insurance, which they can then supplement by private enrollment in another program. Consider offering your employees memberships in health savings accounts, medical cost-sharing programs, or subscription-based health insurance programs.
Health Savings Account (HSA)
When given the opportunity, many employees will opt to enroll in a high deductible insurance plan that offers a lower monthly rate in exchange for a high annual deductible. These programs tend to be the least expensive option for many employers, making them a great opportunity to save money on health insurance. High deductible insurance plans can be made more attractive by offering employees the chance to participate in a health savings account (HSA).
High deductible insurance can leave many employees feeling vulnerable to unexpected medical expenses that may crop up, given that they will be responsible for paying a larger percentage. Having access to a health savings account can allow your employees to allocate funds monthly towards anticipated healthcare expenses, giving them the added reassurance that they will have a pool of money waiting should a catastrophe strike.
Medical Cost-Sharing Programs
Medical cost-sharing programs are voluntary programs that do not replace employer-sponsored health insurance but offer employees alternatives to the more expensive tiers of insurance. With this program, employees choose to be enrolled in a system of peer-to-peer sharing. Individuals contribute monthly to a shared pool of funds that are available to members of the program should they encounter an unforeseen medical expense.
Specifically, your employees would contribute money to the cost-sharing program at a set monthly rate. A predetermined portion of those funds would be set aside for their personal use, much like a general health savings plan. Any funds contributed above that would go into the general pool, which employees can draw from if disaster strikes and their medical expenses exceed the funds they’ve saved.
Subscription-Based Health Programs
In a world where we can customize our television and movie purchases through the many subscription streaming platforms available, why not do the same for healthcare? With subscription-based health programs, employees can subscribe to a medical plan that includes a set network of doctors, dentists, mental health providers, and much more.
These programs cost the employee a small monthly fee, though the expense is generally much lower than the cost of most monthly insurance plans. This can give employees the chance to choose a less expensive tier of employer-funded insurance, or may even allow them to choose to forgo the employer plans altogether. This alone makes it worth your time to offer membership information on these programs to your employees.
Start a Wellness Program
The reality of healthcare is that individuals who are healthy and well will need less care and therefore will need less health insurance coverage. One of the best ways that you can promote a healthy workforce is to create wellness programs for employees to participate in. Company wellness programs often provide incentives for making healthy lifestyle choices like seeking preventative care services, exercising, eating healthy, and participating in self-care.
Do a Health Risk Assessment
Any good wellness program needs to start with an assessment of the needs of your employees. You can do this assessment by polling employees anonymously, looking at national averages, or even getting an aggregate report of how your employees use your current health plan from your insurance provider. This information will all be anonymous and won’t identify individual employees, but will give you a good overview of all employees’ health needs.
Some of the most common risks identified in employer wellness programs relate to issues like stress, weight loss and exercise, or overall nutrition and diet. Smoking cessation programs are also common, as are vaccination drives. Overall, you’ll want to look at your particular employees to decide what the greatest needs of your company are in terms of overall wellness.
Develop Goals
Once you’ve identified the health risks faced by your employees, you’ll want to set goals to be reached to help improve their overall wellness. You’ll want these goals to be specific so that you can measure how well your program works to improve the concerns you’ve identified. This can be as simple as stating you want to reduce a problem by a certain percentage annually or increase employee participation by a certain amount.
Be sure to also include goals identified by the employees themselves, as this will help to improve their participation and commitment to the program. The goal is to have employees who are excited to take steps towards improving their overall health, rather than feeling like they are being forced to do so by their employers. Remember that employees who are eager to improve their overall wellness will cost your company less money for healthcare in the long run.
Provide Incentives for Success
It’s no secret that people are driven to improve if there’s a perceived reward to be won. Consider how you will incentivize people to meet the goals you have set and how you will advertise those rewards. Goods and physical prizes, gift cards and monetary prizes, group celebrations, and awards are all common incentives used in wellness programs to push employees towards success.
Over time, the need for these rewards should lessen as the healthy behaviors you promote become part of your employees’ everyday routines. Building a company-wide culture of wellness will take time, but will absolutely pay off in the long run. A healthier workforce means less dependence on employer-sponsored health insurance plans over time, which means extra savings for you as the employer.
Educate Your Employees About Health Insurance Options
Educate Employees Before Open Enrollment
Before open enrollment begins, be sure to explain in full to your employees what each of the health plan options entails. Many employers make the mistake of only discussing this information whenever an employee is first hired. Unfortunately, new employees are often inundated with information in their first days of employment, and this information may not stick.
Simply providing your employees with a list of options is not enough. Many individuals will default to the most expensive traditional plans simply because that is what they are most familiar with. If you want your alternative options to succeed, find ways to fully explain how they work in simple terms that anyone can understand. Emphasize the ways in which these programs benefit the employees and avoid any discussions that center on benefits to you as the employer.
Offer Year-Round Education
Don’t stop with the education programs after open enrollment is finished. Use the rest of the year to further your employees’ education surrounding health, wellness, and planning for the future. Many health insurance plans and programs have representatives available to host one-on-one or group sessions with employees to discuss concerns or questions.
Scheduling education events throughout the year will keep this information fresh in your employees’ minds. These information sessions can easily be included as part of your company’s overall wellness program and can be used to create a broader company culture of health and self-care.
Saving money on providing health insurance to your employees doesn’t have to come at the sacrifice of quality and coverage. Consider plan options, health insurance alternatives, and wellness programs you can create to benefit your employees while also cutting costs. Schedule a free consultation with the employee benefits experts at Health Compass Consulting today to discuss ways you can save money on employee health insurance.
