It is no surprise that health care in America is rapidly changing which makes reducing employee healthcare costs a constant task of HR Departments.
Educate Employees About True Cost
With insurance premiums increasing by leaps and bounds, employers and health care organizations are looking for innovative ways to reduce, or at least stabilize, costs. Most experts agree that any savings generated from the managed care movement have long since evaporated and the biggest opportunity lies in consumer-directed health care.
Employees Sheltered from Real Cost
With current health care systems, consumers are often sheltered from the real value of health care. Many employees think the average prescription drug and doctor visit costs little more than the amount of their $20 co-pay. But employers and health insurers know these services cost a great deal more. The rising cost of health care services, coupled with the lack of incentives for employees to use health care prudently, brings us to where we are today.
Over the past year, defined contribution health care plans have sparked much attention about the need for consumer education. Under a “consumer-directed” model of health coverage, employees are given a significant amount of responsibility for financial decision-making. While employees still have coverage for catastrophic events, they may only have a set amount of funds to use towards day-to-day expenses, generally excluding preventative care. Thus, when a consumer-directed approach is being considered, it’s important to outline a strategy for educating employees.
What Can Employers Do in Reducing Employee Healthcare Costs?
The answer really depends on the size and resources of the company. Larger companies, which may be self-funded, have a greater stake in the outcome of an educational effort. These companies may be able to hire third-party providers to develop and implement programs for employee education. Most companies however, may not have the extra time or resources to commit to a full-scale education effort.
Employers will undoubtedly benefit from lower premiums in the future by making employees aware of true health care costs. Employees who realize the impact of rising health costs on themselves and their employers are more likely to use health resources efficiently. In the long run, cost-effective consumerism can produce savings that not only flow directly back to the employer, but to the consumer as well. And saving money in these economic times is something no one can refuse.
Reducing employee healthcare costs can be an overwhelming job you might want to get some help with all this. An HR Outsourcer can help. See some options here.
