Any organization that provides health care coverage for its employees has felt the sting of rising health care costs.
Depending on the size of the organization, and the census of employees, those annual increases can be very high.
I’ve been in organizations that increases have been as low as 5% and as high as 20% in a single year.
So what can organizations do to help control these rising costs?
It is important to negotiate with health care vendors on an annual basis to ensure that they are providing the best coverage for the lowest cost.
It is also important to get bids from more than one vendor so there are comparisons to look at.
With the current health care reform debate going on, insurance carriers are interested in controlling cost increases and want to provide the least expensive option possible.
2. Increase Deductibles
When looking at vendor proposals, look at deductibles and play with different scenarios to see how a change in deductibles would lower the monthly costs.
For example, by increasing deductibles from $250 to $500 a month, how much would that bring the premium down?
While this is not for every organization, some may want to explore self-funding.
My organization is currently looking to transition to a self-funded program.
What it means is we take on a much higher deductible, which greatly lowers the monthly premium.
We take that difference in premium and put it in a fund to cover the costs of the deductible per employee.
We will use an outside administrator to manage the claims for employees.
The employee coverage will stay the same but this self-funded model will save our organization tens of thousands of dollars per year.
Again, this model is not for every organization but for those who it can work for, it can save significant dollars in annual health care premiums.
It is critical that organizations educate employees on the cost of insurance premiums. Employees need to understand the benefit they receive and the cost of providing that benefit.
The “sticker shock” effect is very valuable in helping employees appreciate the true cost of health insurance.
5. Share Costs
If your organization is not doing this already, have employees share the premium cost of insurance.
Most organizations ask employees to pay a percentage of the monthly premium.
This helps employees take ownership of the cost of health insurance.
6. Health Risk Assessment
A health risk assessment is another valuable tool that can be used to educate employees.
My husband and I had a health risk assessment done in the last year and it was eye-opening to get a “score” on our health and healthy lifestyle.
While we scored pretty well, there were still things we learned that influenced some behavior changes in our health choices.
7. Wellness Program
Developing a wellness program can also positively influence employee lifestyle changes which can result in lower health care costs.
A wellness program can help employees learn how to participate in their own healthy lifestyle.
This could include education on disease prevention, a health coach, an on-site health center, or something as simple as developing a lunchtime walking program.
The goal is to get employees up and moving and understanding how lifestyle choices can affect their health.
For example, I quit smoking years ago and was greatly concerned with gaining weight. Around the same time, my employer started a lunchtime walking program.
The program made it easy for me to walk away from one bad habit and form a new good habit. I have been walking consistently ever since.
It will be interesting to see how health care reform changes the cost of health care and the way we Americans view healthy lifestyles.
But at the end of the day, it is each of our individual responsibilities to make healthy lifestyle choices.
Unfortunately, not everyone has the option of being healthy; some people get sick with illnesses well beyond their control.
I believe it is for those people that health insurance is important.
But imagine how health care costs could drop if those of us who could control our health would take ownership and responsibility to maintain a healthy lifestyle.