2007 and beyond Featured

8:00pm EDT October 28, 2006
Advances in health care, treatments and education are developing each day and are saving the lives of numerous patients. While these advances are amazing and life-changing, they are costly. On average, health care coverage costs about $8,000 per employee.

The common goal for executives is to deliver sufficient health care and benefits while keeping annual costs affordable, says Rick Galardini, president and CEO of HRH/Affinity Marketing Group. There are approaches executives can take to reduce costs for both the company and the employee. It is important to find a health care provider that provides both health care coverage as well as health improvement tools, says Galardini.

Smart Business spoke with Galardini about future benefit packages and how employers can get the best package while saving money.

What changes will employees see in benefit packages in the future?
There will be more risk sharing among the insurance company, the employer and employees. There will be more financial participation on the part of the employee. The design of the packages may change over time, but the core concept of providing employees with adequate health care remains the same.

For employers to continue to provide a benefits package, deductibles and co-pays will increase in most cases. These costs have been very minimal in the past, but recently the costs of these payments are affecting the pocketbooks of employees.

Employers must be cautious when purchasing a health care package that saves the company money. These savings often are paid for by employees when medical care is necessary. In the case of a medical emergency or long-lasting illness, compensation may not be provided by the insurance provider until a large deductible of sums is satisfied.

How can an employer communicate all the information necessary when benefit packages change?
To effectively communicate benefits changes to employees, experts should be utilized or a staff employee should be properly trained to explain what the package includes. A third party typically is brought in to explain coverage and provide tools so employees can take advantage of all programs offered.

These trained experts should communicate changes to employees directly. One part of the communication process that is often overlooked is communicating with an employee’s dependents. These people are also covered by the benefits package and should be addressed by the benefits provider directly.

How will these changes benefit companies?
Employers should have lesser health care costs. However, it is not that simple. Employers must look at the overall picture and the chain reaction their decision on a health care package may cause.

It is likely employees will pick up the costs that the employer is saving when they pay their premiums for the coverage. Employers should be cautious of other effects to which changes in health care may lead. If an employee’s co-pay is too costly for a visit when an employee is feeling a bit under the weather, then employers risk unhealthy employees coming in to working in the facility. This can potentially lead to a decrease in productivity and other sick employees — and it can affect morale.

How can executives cut benefit costs but maintain sufficient coverage?
Information needs to be provided to employees so they can make informed decisions about the health care for which they are paying. A package needs to be introduced transparently. This means providing all the tools and information needed to make informed decisions, such as where to go to seek medical treatment, who to go to, and the reputation and record of the physician or pharmacy. A benefits company should provide literature, interactive programs and Web sites for employees.

Wellness programs are being offered to employees as part of benefits packages. If employees area healthier, overall health claims are reduced. There is a huge movement in the health care community to initiate wellness programs and education, in order to keep employees healthy as a way to reduce the costs of medical coverage. Profiles are used in this program to identify employees’ needs and health risks. After a profile is completed, health care providers offer suggestions, education materials and tools to help an employee with health risks.

How should an employer select a benefits package?
An employer should look for a provider who is selling the best package for their employees’ needs. These needs should be determined by employee surveys and employee input. The package should also be based on the annual disposable income of the employees.

One should not only purchase the best policy but also the educational tools that help employees get healthy or maintain their health. If you want the best employees for your business, you need to offer better packages and coverage than your competitor.

RICK GALARDINI is the president and CEO of HRH/Affinity Marketing Group. Reach him at rick.galardini@hrh.com.