Reducing Employee Health Care Costs In 2023
A strong health benefits package is key to attracting and retaining top employees. In fact, a study from the Employee Benefit Research Institute showed that 60% of employees say health insurance is the most important benefit to them. Another survey found that 57% of employees consider their health benefits to be a key reason they stay at their current workplace.
But, it can be hard to offer competitive benefits without breaking the bank, especially when you are a small or medium-sized business. Luckily, you can implement a few strategies to strike a balance.
Keep reading to learn our top tips for reducing health care costs in 2023.
Related: Xcellent Life Across America Initiative
The Importance of Balancing Health Care Costs
When choosing a health plan, you might be tempted to pick the cheapest one. However, choosing one that offers the best value, not just the lowest cost, is critical.
Cheaper plans may save you money on premiums. But they may not provide the coverage your employees need. Employees need to know they can access the kind of care they need, where and when it is needed.
If they can’t get adequate care, you will face higher turnover and loss of talent. These kinds of problems affect smaller businesses disproportionately more than larger businesses. Therefore, it’s important that you strike a balance between the cost of your employees’ healthcare and the coverage it offers.
Choose Your Health Plan Wisely
When choosing a health plan, you need to consider your options carefully. Various factors will affect which one will be the best balance between costs and the care your employees need.
Consider What Your Employees Want and Need
Everyone needs some level of healthcare coverage. However, the level and kind of coverage each individual needs will vary from person to person. Some people need more, and others need less.
This is something that you need to consider when picking out a plan. Consider options that will give a little flexibility. Some employees may prefer a generally more affordable plan with higher deductibles over a plan with low deductibles but more options. Meanwhile, for some, the inverse may be true. This is why offering a few different options is key.
Think About the Total Cost of Care
It can be very difficult to determine the cost of care that is ultimately necessary. This is because a few factors can determine healthcare’s overall cost.
For example, preventative care seems almost like an unnecessary cost. After all, most people seeking preventative care are perfectly healthy. However, chronic diseases that would have been avoidable through preventative care end up resulting in 75 percent of America’s healthcare spending. Avoiding preventative now can result in costly treatments later.
This is why thinking about the total cost of care is important. It views the situation from multiple different angles.
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To cut costs, some companies choose to self-fund health insurance. This way, they can save on premiums, savings, and assessments. In addition, there might be exemptions from state requirements. However, self-funding comes with many risks due to the inability to predict the costs of claims.
Level funding is a less costly option that involves an employer paying monthly premiums. Like self-funding, this is a cheaper insurance option. However, unlike self-funding, level-funding is more stable and prevents the employer from dealing with larger claims.
There are more administrative requirements than traditional plans. However, level funding may be a great option if you choose a good partner and have the resources to do so.
Related: Real-time Human Diagnostics (RtHD) Will Transform Healthcare
Consider Integrated Benefits
Many employers try to offer various benefits, including medical, pharmacy, dental, and employee assistance. But managing multiple plans can be a burden and add to your costs. Integrating your benefits can save money, streamline processes, and provide better care for your employees.
If you opt for integrated benefits, make sure to pay careful attention to the plan. The structure, pricing, and possible hidden costs of each component can make a difference in your costs. Be sure to fully understand what kind of plan you are choosing before signing up.
Search Out Plans with Low-Cost Services
During the COVID-19 pandemic, rates of use for virtual care jumped dramatically. Since then, the use of telehealth services has remained high because of the convenience they offer. Many options don’t even require an appointment. Services such as these cost less than conventional care.
Access to convenient, low-cost options increases the chances that people will seek care when it’s needed. Earlier care can help treat conditions that are still more treatable and less severe. This usually translates into lower-cost solutions.
The services your employees choose to access can directly impact your costs. If employees have easier access to low-cost services, it is more likely that they will opt for low-cost plans that have high-deductible HSAs.
These kinds of plans have lower premiums for those that are fully insured. Employers that self-insure or choose level-funding will have lower claim costs.
Encourage a Healthy Culture
Healthy people seek healthcare less often than less healthy people. This automatically saves you money on premiums. In addition, healthy employees are also more likely to choose a lower-cost plan during onboarding or open enrollment. Therefore, encouraging your employees to become and stay healthy is key to reducing your healthcare costs.
One easy way is to choose a health plan that fully covers preventative services. You should also encourage your employees to use these services. Staying up to date on immunizations, preventative screenings, and follow-up care can help keep employees healthy.
It’s also critical to encourage wellness in the workplace. Reduce exposure to hazards on the job. These could be hazardous substances that can lead to disease. But it can also be improper posture which can lead to injury.
Related: OnRamp Healthcare Conference
Consider Xcellent Life’s App
Educating your employees about ways they can improve their health doesn’t have to be difficult. An easy way to know where to start is to see how your employees are currently approaching their health.
Xcellent Life’s app is a simple way to gather analytics that provides personalized insight into your employees’ well-being. You can help them figure out where they can improve and make a plan to do so.
As a benefit, using our app won’t add a huge chunk to your budget. It’s a cost-effective way to gain insights to tailor your health plan better and encourage a healthier culture in the workplace.
Work Towards Reducing Health Care Costs in 2023
Affordable healthcare is key to keeping employees happy, healthy, and productive. By taking steps towards reducing health care costs and balancing quality, you’ll be able to offer health benefits your employees need while maintaining a positive experience.
Wondering how Xcellent Life fits into your healthcare costs and offerings? Get in touch for answers to all of your questions!