The Five Most Important Features of a Modern Benefit Program

All of us know that the greatest problem with medical insurance today is what it costs. More to the point, it’s the relentless double digit increase in that cost over the last five to ten years that has employers scrambling to find ways to control expenditures while offering a benefit program that attracts and retains a high quality workforce.

How did we get here? Well, first, America has a creative and innovative health delivery system that outperforms any other on this planet. Yes, there is some inefficiency in the system, but without the billions of dollars spent on research and development annually we would not have the innovations that keep us living longer, healthier, and happier lives. That focus on innovation and positive results costs a lot.

Second, we have trained a generation of health care consumers to believe that a doctor visit costs fifteen dollars and a name brand drug costs twenty-five dollars. Employers’ generosity from ten and twenty years ago is coming back to haunt us. We offered extremely generous benefit plans because we thought we could afford them. Now that the party is over, employees are having trouble getting used to the real cost of healthcare.

Third, American health care consumers are unwittingly taking advantage of the system. Because of our great wealth in this country, we can eat as much as we want without worrying about how much it costs and, apparently, how healthy it is for us. Our activity level is drastically curtailed by easy access to all manner of transit. And when we choose to engage in activities, much of it occurs on some form of motorized vehicle. We ride instead of walk and call it exercise. Then, when our lifestyle lands us in a health crisis, we have a medical industry that props us back up and gets us back on our feet with no waiting lines. Why watch what we eat when we have Lipitor?

All of this feeds the spiral of increasing health insurance costs. We have now reached a point where owners and benefits managers know that something must change. We simply cannot continue to afford what we have paid for in the past.

So what are the most important elements of a benefit program that will help ease the spiral of insurance costs and still attract, motivate, and retain employees? We have a lot of experience in seeing what is working and what is not. And, for our clients who are taking these proactive steps to modernize their benefit plans in our challenging world, the results are starting to show. Not only in significantly improved medical renewals, but in increased levels of employee appreciation and involvement.

Here are five key features of benefit programs for high performing employers.

Consumer engagement

One thing is certain; as employers, we cannot do it alone. We need our employees on our side if we are going to get control of steadily increasing health insurance premiums.

Employees will need to become more careful consumers of health care services. They will need to become participants in the cost aspects of their own health care. The cost of doctor visits, brand versus generic prescriptions, and emergency room visits are the easy parts of the equation. When we start actually talking with our physician about the trade offs of alternative medical strategies, about pricing, and preventative measures, then the system is beginning to work. By allowing doctors to be doctors again patient engagement creates better health outcomes, reduces costs, and improves our health overall.

If that is going to happen, then we must engage our employees in the process. They need to be able to view the true costs of health insurance and allowed to exercise some of their own judgments about their coverage. Some of our clients have gone so far as to form benefits committees comprised of interested employees. Those employees sit in on medical renewal meetings and become part of decision making.

Employees need to become financially involved in their healthcare decisions, from making decisions about the costs of alternative medical plan choices to brand name or generic prescriptions, to cost tradeoffs in medical facilities. When employees have a financial stake in their medical care and understand that there are alternatives over which they have control, health utilization decreases. And the annual medical renewal looks a lot better.

So, how can we encourage our employees to be better consumers and to become part of the process? We need to give them choices.

Choice

One of the most astounding successes for our clients’ benefit plans happened about six or seven years ago when a few employers started to offer two or more medical plans from which employees could choose. Starting with a basic plan provided by the employer at a set cost, employees were free to elect a richer plan and pay the cost differential out of their paychecks.

We were a little concerned, at first, that employees would view the choice suspiciously. Maybe they would not understand and make bad choices. Or perhaps they would resent being involved in what had, historically, been an employer caretaking decision.

Nothing could have been further from the truth. Employees embraced the concept and felt empowered by the opportunity to get involved. With employee choice came greater employee appreciation for the entire benefit plan. Employee involvement through choice created greater appreciation.

Most importantly, when employees were given the opportunity to choose between alternative health plans, with different benefit levels, and with cost tradeoffs in their take home pay, they became responsible for making healthcare decisions for themselves and their families. It has been gratifying to see how quickly employees have stepped up to the challenge this has entailed. Further, it has made them partners in the critical process of helping all of us to get control of our health care spending.

Since that success, our clients have expanded the range of choices far beyond the medical plan. Dental plans, disability insurance, life insurance coverage, even identity theft protection and pre-paid legal have been added to the menu. Employees have come to understand that it is their responsibility to design a plan which fits their specific needs. Each employee has his or her tailor made plan that is right for them and their family. And it is a plan that is available at our clients’ places of business and not likely to be available at the next employer down the road.

Of course, for all of those choices to be available and for the employees to truly appreciate what they have, you have to figure out to tell them about it.

Communication

Explaining the various elements of the benefit plan and helping employees make the right choices requires communication. Large corporations have vast human resources departments charged with creating a communication package to explain the benefit plan for employee enrollment purposes. Most of the process takes part on the Internet.

For smaller employers, a higher touch communications program is required. We feel that a combination of group employee meetings followed by individual enrollment meetings is essential to helping people to make the best decisions. The process needs to be repeated at least annually in order to communicate changes and additions to the plan, help employees tailor the choices to their specific situations, and enroll their decisions.

Meetings conducted by speakers and enrollers, not on the employer’s payroll, are uniquely capable of helping employees to self-design a benefit program specific to their needs. Making the employee benefit plan work to its fullest by facilitating employees’ benefit choice decisions has proven to be a most fulfilling part of the services we provide.

When an effective communications plan is in place, there is the opportunity to introduce additional features of a modern benefit plan; like, how we can live healthier lives.

Wellness and prevention

We just have to get healthier in America. Our eating and drinking habits, sedentary lifestyles, and stressed out routines are taking a heavy toll on our health. And we are paying an ever greater price tag in our health insurance premiums.

The return on investment to implement wellness and prevention programs in the workplace is well established and it’s always positive. Large corporations have calculated to the penny the financial return from wellness programs which help employees to lead healthier lifestyles. It’s not just lower health care costs which have been measured. Absenteeism is reduced and productivity is increased dramatically from the implementation of wellness programs.

If it pays off for large corporations, will it work for you? It has been shown that nearly eighty percent of health claims during our employment years are preventable through healthier living. Consider the cost in lost productivity, not to mention potentially increased insurance premiums, of one quadruple bypass surgery in your employee group. Especially if that procedure were preventable through wellness initiatives available through your business, the financial payoff for engaging your employees in living healthier lives would surpass the return on investment calculations in the large corporations.

Where can you find the tools to implement a wellness and prevention program? All of the medical insurance companies provide a wealth of packaged programs to support your efforts. Many are free of charge or available at low cost. Examples include health assessment questionnaires to help your employees to focus on their risk areas. Smoking cessation programs, health club discounts, flu shot programs, and healthy living support programs and more are provided by all of the insurance carriers. You just have to ask.

You will need a cheerleader in your organization to coordinate the program. I know that everyone is already wearing a number of hats and here is another one. The wellness coordinator needs to have a cheery personality, some organization skills, and a genuine caring attitude toward the welfare of the employees. Then all he or she needs to do is to access the host of programs already available through your health insurance provider, organize a plan for the year, and get started. We stand ready to support that plan by sharing successes which we have observed within businesses just like yours.

Cost effective

Can a modern benefit plan engage employees in the plan, provide employee choices, implement a communication system, add employee wellness features and still be cost effective? You bet it can!

Way back when our clients first started the initial step of offering choices between two or more medical plans, the short term goal was cost containment. When that experience resulted in not only reduced costs, but below trend medical renewals as well, employers saw the potential to phenomenally enhance the benefit plan while controlling costs.

That has been our experience and we believe there is still a lot more to come.