U.S. employers are continuing to struggle with rising health care costs, and in an effort to limit spending, many are shifting more costs to employees. Others are emphasizing wellness initiatives or controlling costs through health savings accounts and reimbursement arrangements.
How can your company approach implementing an optimal health care plan for its employees? Start by asking your carrier or consultant what options are available. This will help guide you through the process so you aren’t blindsided by unpredictable costs in the future, says Randy Narowitz, CEO of Total Health Care.
“The biggest area of concern we are hearing from the employers today is they can’t manage or predict the cost of the health care benefits,” says Narowitz. “Having predictable, manageable cost increases is a real value to employers.”
Smart Business spoke with Narowitz about the kind of questions employers should ask when choosing a plan, what type of relationship you should expect with your carrier and how to realize cost savings.
What factors should companies consider when analyzing their employee benefits?
Employers are evaluating their health care plans annually. Typically, you start with the plan design that you offer today. Then the decision-maker for the employer decides if the company can maintain, improve or cut back on the benefits.
It’s important to evaluate alternatives in terms of cost and the product offerings. There are a variety of ways to differentiate carriers: size and strength of the provider network, plan design flexibility and premiums.
What questions should an employer ask a carrier when choosing a plan?
If you are using the benefits as a tool to attract or retain employees, then you want to evaluate the quality of the benefits and compare them to what else is out there in the marketplace. Features such as co-pays and deductibles are factors in the decision-making process and can be tweaked to be competitive. Also, access to care and a strong provider network are important components to consider.
If you are cost sensitive, then you want to ask about how to optimize the benefits at the lowest possible premiums. You want to analyze the tradeoff between the premium costs and the benefits.
What can a company expect from its relationship with its carrier?
The carrier must be well versed on all of the alternatives available, understand your needs and find the best match for you.
Most employers use the services of a consultant or broker to assist them in the decision-making process. A consultant’s role can vary significantly.
At one extreme, the consultant is your exclusive liaison to the carrier. The consultant represents several health care plan options, helping the employer work its way through differentiating which products are best for its business. The consultants may also take the lead on administrative tasks including open enrollment, employee education, compliance and communications with the carrier,
At the other extreme, a consultant’s role is limited to the selection process.You can expect your representative to be able to differentiate the plans and the products depending on how you prioritize your decision-making criteria.
As an employer, you should expect your representative to be able to navigate through the decision-making process on your behalf.
Also, health care reform is upon us and is impacting employers significantly. With recent health care initiatives, it’s very important for the employer to be updated. Your plan representative, carrier and consultant need to be able to educate you about the latest changes associated with health care reform.
How can companies save money when they are looking for a carrier?
The primary decision about cost involves how much of the financial burden you want to shift to the employees. Shifting the financial burden to employees by raising co-pays and deductibles, and having them pay a portion of the premium are ways to reduce and control your health care costs.
Savings associated with prescription drug costs can be achieved by raising co-pays or by restricting access to branded drugs when generics are available. Employees are very sensitive about changing medications, but there is a real opportunity to save money when you make these adjustments. Contracting with a restricted network, such an HMO, and introducing wellness initiatives can also reduce costs.
What information should employers provide to employees?
If you change a plan design in any way, it is important that the changes be communicated clearly. If the product has complexity in terms of network participation, this needs to be simplified and communicated clearly, as well.
Employees are very resistant to a change in their health care benefits. If you are planning to reduce benefits or shift costs to the employees make a significant commitment up front to educate your employees.
Simplify the message and commit the time and resources to help them understand the changes before the new contract year begins.
Randy Narowitz is Chief Executive Officer of Total Health Care USA, a leading Michigan managed care provider. Narowitz is an influential figure in the health care industry. He has worked to bring the issues of health care quality and delivery to the forefront of both the local and national health care agendas. Total Health Care USA is NCQA Accredited and serves members in Wayne, Oakland, Macomb and Genesee counties.
Insights Health Care is brought to you by Total Health Care