Over the past few years, health care costs have stabilized. While there is still medical cost inflation to consider, which runs at about 6% annually, the cost increases aren’t usually budget busters.
And yet, that doesn’t mean that this is a topic to ignore. For many employers, health care costs are the second largest overhead cost, after payroll. It is a smart practice to be on the lookout for strategies to help manage costs on an ongoing basis.
So what’s an employer to do?
For smaller employers, addressing health care costs can be frustrating, as they have less options available to control them. It may be nerve-wracking to take on the risk of being self-insured, a more common choice for larger employers. But that doesn’t mean there aren’t approaches that even smaller employers can consider. All employers can, and should, take an aggressive approach to managing health care costs.
Here are a few options to consider:
- Invest in well-being programs. Well-being programs establish a culture of health and prevention. Establish a meaningful budget to offer a comprehensive program. While 83% of employers offer a wellness program, only 13% of those programs are comprehensive.
- Select your health insurance consultant carefully. Health insurance is complicated. There is no doubt about it. It’s important to select your health insurance consultant with care. A broker who shows up annually to tell you your new rates, may not be working in your best interest. Look for a partner who offers creative approaches and innovative ideas for managing costs.
- Ask for data and analyze it. Small employers may not be able to get meaningful data, but large employers have access to lots of data. Working with your well-being and health insurance consultant, analyze the data for actionable solutions. These may include pharmacy benefit strategies, identifying gaps in care programs and health coaching offerings.
Taking action on managing health care costs is a worthwhile, financially beneficial step. Invest the time to identify and implement creative approaches that will pay off both in the short-term and the long-term.