3 creative ways to cut costs in your benefits plan
Making the most out of your plan’s cost-cutting potential requires a bit of strategizing, but the results are worth it.
There are many savings opportunities hiding in your benefits plan, but you can only unlock them if you’re working with an advisor who knows what to look for. Status-quo benefits plans are designed to offer patients health care options that get brokers and insurance companies paid more, but they do so by providing your employees with inferior health care at a greater cost to you. Making the most out of your plan’s cost-cutting potential requires a bit of creative thinking and strategizing with your advisor, but the results are worth it.
Related: Creative plan design: Overcoming the obstacles
Here are a few innovative ways you can save money on your benefits plan without sacrificing quality:
1. Explore high-tech options
Don’t assume that a health care tool or treatment is more expensive just because it seems futuristic. Advancing technology in the health care industry is making it easier to prevent, diagnose, and treat ailments and illnesses, and that can mean big savings for your business. Perhaps the fastest growing trend in high-tech health care benefits is the use of telemedicine, which enables patients to receive medical consultations over the phone or a video conference (and has the potential to save U.S. employers up to $6 billion a year, according to a Towers Watson study).
But your company’s wellness program can also use technology to help your employees keep track of their own health. Simply encouraging or incentivizing the use of health-based apps can help your employees make more informed lifestyle choices, potentially reducing doctor’s visits associated with smoking habits (which can cost employers up to $50 billion annually, according to UPMC), poor diet, and lack of exercise.
2. Implement a wellness program
The numbers support the mantra that prevention really is the best medicine. A 2012 Gallup study revealed that employees with higher-ranked “well-being” had 41 and 62 percent lower health care costs than those who were “struggling” or “suffering,” respectively. And if you want your employees spending less time at the doctor’s office or recovering from surgery, a company-wide wellness program can pay off for you, too.
While preventative care can’t eliminate all doctor’s visits, providing incentives for your employees to make better choices for their health can reduce trips to the hospital, sick days, and lost productivity. In fact, a study published in the Journal of Health Affairs found that businesses saved an average of $3.27 in health care costs per dollar invested in wellness programs.
3. Offer the option of a health savings account
Health savings accounts, or HSAs, are becoming an increasingly popular way for employees to gain more control over their health care while reducing costs for employers. A 2011 study by Employee and Account Holder surveys revealed how employees’ health care habits changed when they started contributing their own income toward an HSA:
- 28 percent opted for lower-priced prescription drugs
- 54 percent set aside more money for health care coverage than before they had an HSA
- 18 percent made healthier lifestyle choices
- 31 percent planned their health care better throughout the year
The more informed choices that employees make when they contribute to an HSA mean that they’ll be more careful not only with their money, but also yours.
By offering options like better technology, wellness programs, and HSAs, your benefits plan can provide your employees with great health care without unnecessary costs to you. The right advisor will think outside the box to explore every available savings opportunity, keeping your workforce healthy and happy while providing you with funds you can use to help your business grow where it’s needed most.
Jim Blachek flipped his traditional brokerage model in 2017 to focus solely on consulting and building value based health plans. In 2019 he co-founded a consulting only firm Dynamic Benefit Solutions and founded Local Script a transparent pharmacy and marketing organization focused on reducing employer and employee costs while supporting the local community.
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