Navigating Employee Benefit Cost Management

Navigating Employee Benefit Cost Management

According to the U.S. Department of Labor, employers spend more than 30 percent of payroll on employee benefits—and every well-informed employer knows that this number is growing. As health care premiums continue to rise, employers struggle to find creative, strategic ways to control costs while also maintaining competitive benefits to attract and retain the best talent.

Tactics such as changing carriers, slashing benefits, and shifting costs to employees provide only short-term financial results and also negatively impact employees. When you analyze health care costs and utilization, and understand employee needs, it can help you tailor solutions and develop employee incentives that reduce costs and slow increases over time.

Identify & Manage Costs

Respondents to the 2016 UBA Health Plan Survey reported a 65.9% overall annual increase in premiums since the last plan anniversary in 2016. The first step in cost management is identifying your costs. It’s relatively easy to identify your benefit costs, but it’s harder to figure out what’s driving them, and much more complex to manage them. Savvy employers use the most accurate benchmarking data and trends available to correctly evaluate costs, contrast their current plan’s benefits against the competition by region, state, industry, and size. Then, they are able to adjust their strategy accordingly. Armed with this information, employers can better communicate the value of their benefits to their employees.

Encourage Healthy Employees

As employers become more limited in their ability to cut benefits and shift costs to employees, many look to health management programs that help employees stay healthier and educate them about how to use their resources more prudently. To reduce the substantial long-term expenses associated with chronic disease, employees must be encouraged to take advantage of the health package, learn how they use health insurance over time, and the level of chronic disease occurring among them. These techniques and measures not only help you capture savings over an extended period of time, but can lead to improved productivity and more satisfied employees.

Chronic diseases — such as heart disease, stroke, cancer, and diabetes — are among the most prevalent, costly, and preventable of all health problems. Medicaid spending has grown rapidly in recent years and is placing a significant burden on state budgets. It has become increasingly important for employers to understand the financial impact caused by chronic diseases on health care costs, as well as to inform employer decisions on investments in chronic disease prevention and disease management programs.

Seek Help from Experts

Small and midsize businesses throughout the nation are seeking the advice of qualified benefit advisors to help them explore a more proactive and comprehensive benefit planning strategy to counter the soaring costs of health care benefits. Here at Beneflex, we can provide you state-of-the-art tools, including comprehensive national surveys and tailored benchmarking data, wellness programs and personal expertise.

Contact us today to see how we can help you navigate these complex waters!

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