Insurance as an investment Featured

7:00pm EDT February 23, 2010

Often, employers view their health benefit program simply as a cost, without considering the potential benefits that come with a quality program.

“Many employers think of health plans as a necessary evil,” says Greg Mercer, vice president of sales, marketing and business development for Kaiser Permanente.

However, it can be valuable to take a fresh look at the benefits as well as the costs. Instead of merely calculating what you’re spending, look at what you’re getting back. Good benefits help attract and keep high-performing workers. Employees consistently rate health insurance among the highest-valued job-based benefits. Turnover is costly, and competition for qualified workers can be stiff.

“Many employers recognize that in order to be competitive at attracting talent, they need to have a health plan that provides reasonable benefits to a happier work force,” says Mercer.

Health insurance can also enhance productivity. Improved health means reduced absences and higher-capacity performance while on the job. Benefits help boost employee satisfaction and morale, which contribute to productivity as well as loyalty.

Finally, health benefits improve your staff’s quality of life. Simply put, offering benefits that contribute to better health is a good thing to do. By showing that it cares about its employees, the company builds its image as a good corporate citizen.

With these benefits in mind, consider a well-designed benefits package an investment in your staff and your company.

Smart Business spoke with Mercer about how to select a high-performance health plan that meets your company’s needs.

What should employers look for in a health plan?

An employer should be looking for more than a spreadsheet, which is frequently all that they get. A broker or consultant will come to them and say, ‘This is what’s covered and this is the cost.’

However, there’s a lot more to it than that. Not only should employers make sure that the financial protection is there, but they also ought to care about how the care is going to be delivered and what sort of support is provided to help employees stay healthier.

Whether you hire a benefits consultant or investigate on your own, use these tips to guide you through the process of creating a partnership that works:

  • Make quality a priority. Quality-conscious carriers will have processes in place for measuring and encouraging performance improvements like increasing the use of appropriate preventive screenings. Ask for evidence that physicians routinely apply a lifestyle-intervention approach with patients, including recommending healthy behavior changes and tracking a patient’s progress. Use due diligence: Check credentials and interview client references that have a work force population similar to yours.
  • Fit the plan to your people. A good health plan can help you determine what is driving your health-related costs and help you find ways to manage them. That way, the programs you offer will target health needs of relevance to your employee population. Some vendors administer a health risk assessment to identify which behaviors to target for greatest impact, or you may want to survey employees on their wellness interests and goals. Find out from health insurance carriers what wellness programs they offer, and how they measure the success of their programs.
  • Think long-term. Health improvement doesn’t happen overnight, but health and wellness initiatives started now can position your company for savings in the future. If you think of health improvement and wellness as a short-term cost-containment strategy, you may be disappointed with the pace of your results. But over the long haul, benefit plans and wellness programs can have a positive impact on your organization’s cost trends and premiums.

How can employers help their benefit plan succeed?

The success of your health benefits program depends largely on employees’ understanding it and using it wisely. Even if your health benefits package is no-frills, you should communicate its value to your employees.

It amazes me that some employers never share how much they are paying for their insurance. Employees don’t realize how much it costs. They see the tip of the iceberg; they see the 10 or 20 percent that they are asked to pay, and they think that’s an awful lot, but that’s just a fraction of the whole cost. As a minimum initial step, it doesn’t hurt to share with employees how much the employer is putting into their health insurance. It can help them gain perspective on why that employer may not always have a lot left over for other things, like pay increases.

In addition, in your role as company health promoter, don’t forget to encourage employees to use the important preventive services that are most likely included in your coverage. Basic services like screenings and immunizations can yield significant results. In that respect, the money you spend for prevention is an investment in the future health of your employees and your business. Your insurance broker or carrier may have ongoing promotional campaigns that you can tap into — reminders about mammography screenings during Breast Cancer Awareness Month, for instance — and may be able to provide turnkey materials for your use.

Finding a value-adding health care vendor with whom you can establish a stable, mutually rewarding partnership can be good for your workers’ health and your company’s bottom line.

Greg Mercer is vice president of sales, marketing and business development for Kaiser Permanente. Reach him at (216) 621-5600 or