How Many Companies Are Cutting Costs
Rising employee benefit premiums are on the top of most employers list of growing concerns. The bad news is that premiums are only expected to increase. The good news is that there are steps employers can take to help alleviate that burden and keep employees satisfied.
Many employers have switched to plans with higher deductibles, which results in lower costs. However, even with higher deductibles, employers are still slapped with a relatively high premium. To make up for this, employers have shifted some of the burden to the employees and are requiring them to be responsible for a larger portion of the premium. While this may put less strain on the profitability of the employer, it does not solve the problem entirely and can make for some very disgruntled employees.
One solution to this problem is what is referred to as “consumer- directed benefit options.” One such example is an HSA, or a Health Savings Account. An HSA is combined with a high deductible health plan. It is essentially a fund that allows employees, as well as employers, to save money tax-free to be used for health care expenses. The money in the account belongs solely to the employee and is portable. In other words, they may take it with them when they change jobs or retire. As such, the employer has the option to contribute to the employees account, or they may choose not to contribute. By combining the premium benefits of a high deductible health plan with the funding advantages of a HSA, employers are experiencing lower health care costs and encouraging employees to make better decisions about their health care.
HSAs are a great way to cut healthcare costs, but many companies are not stopping there. One more type of “consumer-directed benefit option” can be found in the form of wellness programs and incentives. As most employers know, unhealthy employees result in higher premiums because they are perceived as a greater risk. Many companies are taking their employees’ health into their own hands. They are doing so by offering their employees incentives to participate in wellness programs and prevention methods. Incentives are usually offered in the form of a reduction in the percentage of an employees contribution towards their premium, a gift certificate, or a deposit into their health savings account. Incentives may be given for a range of things such as participation in risk assessments, wellness screenings, and one-on-one counseling. Since these programs are voluntary, they are not based on results, but rather participation. Some companies even go as far as to penalize employees with chronic conditions who refuse to participate. However, they must proceed with caution due to federal laws dictating exactly how far they can go.
HSAs and wellness programs are just one was to save your company and employees money. For more information on creative ways to reduce your healthcare costs, please contact our office.
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