As we approach the busiest open enrollment season of the year, many employer groups are looking for ways to not only help their employees understand their benefit options but also to reduce the cost of providing health insurance to employees.
“With the current state of the economy, employer groups offering heath insurance to employees are asking how they can control costs when it comes time for renewal,” says Steve Chrzanowski, service and support manager for commercial sales at SummaCare, Inc. “Employers are looking for ways to offer comprehensive benefits while keeping costs manageable.”
Smart Business spoke to Chrzanowski about how to leverage the cost of providing health insurance and how to assist employees in making educated benefit decisions.
What things should employers consider when renewing their company’s health insurance benefit package?
Before the renewal date, employers should review their benefit package and decide if it makes sense for their company and employee population. It’s important to consider all aspects of the benefit package and not just the benefits themselves.
Employers should not only decide whether the plan design offers good coverage at affordable rates, but also if employees are satisfied with the associated services they receive. Take into consideration accuracy of payment and handling of claims, the quality of customer service, and the availability of health and wellness programs, value-added services, online tools and more. Make sure premium increases year-over-year are predictable and reasonable.
If an employer is considering a change in benefit design and/or carrier, it should first discuss its options with its account manager, consultant or insurance agent to see what is suitable for its budget and overall goals. There may be a solution with their current carrier they did not know existed.
What cost-saving strategies are employers currently considering at renewal?
To help control costs, many employers are looking at their benefit packages and opting for plans with higher deductibles and coinsurance. They are also looking at their pharmacy benefit and co-pay structure and asking if any new pharmacy management programs can be put in place that are both member-friendly and cost-effective.
Industrywide, many carriers are seeing employers impose a higher employee premium contribution if the employee is a smoker. To avoid this higher contribution, many employers require employees to provide proof of enrollment in a smoking cessation program.
Some employers are now requiring employees to provide documented verification that spouses and dependents do not have other options for health insurance coverage. In these cases, if a spouse of an employee has the ability to take coverage from their employer, the employee’s employer is requiring the spouse to enroll in that plan or the employee may incur a penalty or pay a higher employee contribution for the family plan.
What decisions will employees make during open enrollment?
Open enrollment is a period of time, usually 30 days, in which employees can make changes to their health insurance coverage. It typically occurs during the month prior to renewal or effective date of coverage.
If multiple plan designs are offered, employees should assess their personal health care needs as well as those of their family. Employees should weigh their individual health care utilization against the amount of premium charged and all of the associated out-of-pocket expenses amongst the plans offered. It is a very personal decision, and employees should take their time in choosing the best plan for them.
If employers offer coverage through more than one carrier (insurance company), the employee will need to obtain information about the plans and compare plan designs and value-added services available to them. This includes things like health and wellness programs, online tools and discounts to ancillary services like vision or dental.
What kind of information should employers provide during open enrollment?
Prior to the open enrollment period and renewal date, employers should obtain copies of summary of benefits for all plans offered, the pharmacy rider, a current drug formulary, mail-order pharmacy information, a printed copy of the provider directory as well as information on how to search for a provider online, customer service phone numbers and any value-added benefit information. This can include info on dental and/or vision discount programs, disease management programs, online services and more. The account manager, consultant or insurance agent can provide this information.
How can employers help employees make educated decisions about their benefits?
Besides reviewing benefit designs annually and providing plan materials to employees, employers can request a presentation meeting to review benefits with their carrier. They can also request the carrier come in for scheduled ‘table time’ with their company so employees can ask questions personally.
Regardless of whether an employer is renewing a current contract, making changes in plan design or switching carriers altogether, both the employer and employee need to be well-informed and well-versed on any changes to the offering as well as the benefits in general.
Offering health insurance to employees in today’s economy is a big bonus, and having a good plan offering that employees are happier with will make way for an excellent return on investment in the long run.
