Rising health care costs are putting more and more pressure on employers every year. Providing a desirable plan has become an enormous expense, but companies still need to offer health insurance benefits to stay competitive and recruit.
“Health insurance is no longer an employee benefit; it’s a cost of doing business,” says Albert Ertel, COO of Alliant Health Plans. “You have employers trying to find a balance between what they can afford and what the employees desire.”
Smart Business learned more from Ertel about how employers can find that balance.
What options do they have to keep the costs manageable while also offering a quality benefits program?
One of the mistakes employers make is looking at their health plans on a year-to-year basis instead of using a long-term, multi-year approach. There used to be 10 to 15 insurance companies employers could get quotes from that would compete for their business. There are only a handful of competitors in the business now, and options tend to be homogenous. Companies don’t look at the true cost of changing carriers.
What should employers look for in a health insurance carrier?
They should look at the price point and the availability of services. One universal truth is that health care is local. Looking at the provider directory may not provide solutions. Look for a company that wants to work with you over the long haul. This opens the door to develop that multi-year or long-term approach. Too many people just say, ‘Here’s the low rate this year; it’s time to move.’ Disruption adds to the cost of changing carriers. Once you change carriers four or five times, you’ve gone full circle and not accomplished anything positive for your employees.
In the real estate market everyone looks at location, location, location. In the health insurance business, people have a tendency to be very short-sighted and look at rate, rate and rate. Health insurance is a product for which you truly get what you pay.
Besides price, what should employers consider when looking at health insurance?
The basics are the price, the benefits and the network that employers have a tendency to focus on. After those three factors, you should consider the true level of customer service, level of employee education, hands-on service and no-cost, value-added services guiding people to healthier decisions. If you only compare the basics, you’ll have a tough time differentiating one carrier from another. Although employees aren’t involved in the decision of where to buy coverage, every employer out there knows that a benefit is no longer a benefit if it’s a ‘hassle.’ I’m talking about picking up a telephone and talking to a person. You need a focused point of contact — those touch points that are truly hands-on, truly person-to-person.
Employers want to do the right thing for their employees. But the amount of information most employees know about their health insurance is printed on their ID card. That’s about as in-depth as they go until they need it.
How can employers educate their employees about their health insurance?
Let’s ask the right question: What do my employees really need versus what do they want? Most employers rarely ask. Now you’re providing value, so give them the opportunity to learn about what they’ve got. The annual enrollment period is a great time to educate and inform employees about their benefits. Unfortunately, a lot of employers just get an application filled out. But what does a new application mean to an employee and his or her family?
One idea that works well is to invite the employees’ spouses in for these meetings. Why? Seventy-seven percent of health care decisions are made by women. So involve the spouses.
What is the benefit of educating employees about the plan?
The biggest benefit is truly imparting the knowledge of the cost of medical care and the value of the insurance plan the employer is providing to them. Most employees don’t understand how much it costs. All they know is how much is being taken out of their check.
The other thing they know about the cost of their health insurance is the co-pay. If their doctor’s visit only costs them $20, then why is the company taking so much money out of their account? You have to help them understand their cost is only the tip of the iceberg.
What are some of the factors contributing to high costs?
When you look at the process of pricing health insurance for a company, you look at the demographics of the group: age, sex, family participation in the group, the plan design they are interested in, where they are located, the health of the group, whether it’s through claims experience or health histories. Then the bargaining starts. The risk is determined and benefits may be modified.
How can employers marginalize those factors?
I’m a big believer in personal responsibility. People want to work for employers that take the time, not just in an enrollment meeting, but with a truly educational total approach to employment and benefits. Large or small, the companies people want to work for are ones that give employees the tools to make their own decisions. If you give people responsibility, eight out of 10 of those people are going to rise to that occasion and many exceed it.
In the health insurance business, the best way to bring down costs is by being healthy. That is why preventive care and wellness programs are so important and need to be considered.
Albert Ertel is COO of Alliant Health Plans. Reach him at (706) 629-8848 or firstname.lastname@example.org.