Not everyone likes change, especially when it comes to health care. However, with health care's rising costs and the tough economic climate, more of those expenses are shifting to employees, says Sheryl Kovach, president and CEO of Kandor Group, a human resources consulting firm in Houston.
"Companies aren't doing as well as they once were, and one of the largest costs for employers is labor," Kovach says. "When you consider everything an employer invests in its work force, the costs now have to be allocated in different ways."
A major challenge in communicating a new cost-sharing model is helping employees understand the true costs of health care, says Mark Sherman, adviser of FirstPerson, an employee benefits firm in Indianapolis. Unlike other consumer items, health care costs are far from transparent. Employees rarely understand what employers are actually paying; thus, frustration can build when they are asked to take on a greater portion of the costs.
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"We can get online and figure out in about 20 seconds what a big-screen TV, car or refrigerator will cost, but there's not good online access to find out what health care is really going to cost for a certain expense I now have to pay." Sherman says. "It's frustrating for the employees."
To help employees understand these costs, an employer should openly share how health care costs affect the business. For instance, if employee benefits cost a company $5 million, the employer should outline that figure along with how the costs are divided among the organization to the employees.
"When you start talking in significant terms, then employees understand," Sherman says. "They may not like it, but they at least understand the employees and employer are fighting this battle together. If all the employees hear is their costs are going up by 20 percent, they don't know what that means to the company."
Kovach recommends employers also provide models of what competitors and even companies within other industries are doing in terms of benefits. Often, employees' morale takes a hit when costs are shifted onto them. The employees think their employer is the only one shifting a higher burden to them, but that is not the case.
"It certainly does help manage employee retention, and it helps ease that immediate feeling some employees have in thinking that just their company is shifting the costs." Kovach says. "This helps boil down the reality that this is an effort on the employer's part to preserve sustainability. To survive as a business, the employer has to shift the costs."
Once the new cost-sharing model has been implemented, the employer should monitor the general attitude of the new structure, which can be achieved through employee surveys, Kovach says. Every 30, 60 and 90 days, the employer should send out a satisfaction survey, gauging employees' perceptions and allowing the employer to address any immediate concerns.
"Take the temperature and see what the employee climate is like," Kovach says. "That way, you can be proactive to some extent if there's a declining morale, and you can find other creative ways to address that."
Sherman believes continuous communication is especially important because benefits are too often ignored for the majority of the year. During open enrollment season, the benefits buzz is strong, and any potential issues are frequently addressed, but communication soon fizzles after enrollment ends.
"We have to get out of the mentality that benefits are something we talk about once, and then we're done for the rest of the year," Sherman says. "We need to make sure employees have the right tools, education, people to call and the right access to resources, so they can be good consumers and understand their options. Otherwise, they get steered down the path."
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