How to Manage Health Insurance as an Employer
Employers are often in a tough position of deciding how to provide good benefits to employees while keeping costs under control.
One area where that is a particular struggle is in offering health insurance. This is an expense that only seems to increase over time, but a benefit that most employees want and expect.
Higher Prices on the Way
According to the article, “Health Insurance Premiums Likely to Rise in 2015”, many insurance providers are expected to raise their prices. This doesn't come as much of a surprise to most managers. It does fuel their concerns on how to continue to offer the benefit to employees while staying within budget.
With the Affordable Care Act, most businesses don't have a choice about whether to offer health insurance, so it is up to them on how to fit it in the budget. Many managers are already crunching the numbers and looking at options.
Cutting Costs or Benefits
Management has very few options for dealing with the rising costs. According to analysts, more companies are pushing the cost of health insurance onto employees. Increasing employee contributions is one option, which 18 percent of companies planned to do for 2014 with more expected to move in that direction for 2015.
In fact, nearly half of employers expect to increase the deductibles or copayments in the plans they choose to lessen the cost of coverage. The issue for management becomes how they are going to sell these changes to the employees.
Requiring employees to contribute more is not without its consequences. Most employees are not happy with the increase of health insurance costs for them, especially when they have had to contribute very little in the past.
Managers must find creative ways to get employees on board with the changes. They may offer rewards for employees who participate in wellness programs. They can also provide free health screenings with employees that do well receiving a deduction in health coverage costs.
Another option is to offer a health savings plan where employees can put pre-tax dollars to help cover the cost of the premiums and deductibles. Some employers even contribute to the plan. In fact, one study showed that 66 percent of employers surveyed planned to offer this type of benefit to workers.
Employers can also look at changing the type of coverage they offer. The most popular health insurance is the PPO or preferred provider network. However, it is also one of the most expensive. Switching to an HMO can be more affordable to both employer and employee.
Managers can offer both options to employees, letting them know they will be paying more for the PPO coverage. This allows the employee to decide whether coverage or cost is more important.
Managing the costs of health insurance benefits is an ongoing task for many managers. It is often challenging to balance budgeting concerns with worries over employee response. By being creative with your solution, you can meet the challenges and keep employees satisfied with their benefits package.
Joyce Morse is an author who writes on a variety of topics, including human resources and health insurance.