Posted by Roger Howell on Thu, Jun 25, 2009 @ 11:39 AM
The recent recession has prompted many employers to audit operating costs, reduce hours, lay off employees and slash employee benefit costs. The cost of employer paid health insurance has been put under the microscope by CEOs, CFO's and Human Resource executives around the country. Millions of employees rely on their employers for funding at least a portion of their health insurance coverage and many are concerned the recent downturn in our economy will increase out of pocket medical costs and paycheck premium deductions. So, what is an employer to do? How does a business owner or CEO satisfy budget constraints caused by economic pressure and still manage to preserve employee morale?
Here are a few tips for controlling health insurance costs for your company and your employees during a tough economic period:
1.) Communicate your need to reduce or control costs to your workforce as clearly as possible and well in advance of any benefit changes or premium increases.
2.) Take a hard look at carriers, provider networks, coverage levels and premium contributions before making any final adjustments in your health plan. Will the cost savings generated by increasing deductibles and co-pays be offset by productivity losses, negative morale or increased turnover?
3.) Ask carriers if they can offer your company reduced group premiums if you are willing to "bundle" multiple benefit plans such as health, dental, vision, life and disability.
4.) Take advantage of Flexible Benefit Plans (Section 125/ IRS) by allowing your employees to payroll deduct health premiums and fund medical expenses and eligible over the counter items on a pre- tax basis.
5) Consider implementing a Health Reimbursement Arrangement (HRA). This option allows employers to purchase a lower premium, high deductible PPO or HMO from the insurance carrier and self-fund all or a portion of the up front deductible.
6) Convert certain "non essential" benefits to voluntary, employee paid alternatives.
7) Access web-based HR technology to reduce paperwork and labor costs.
8.) Educate employees regarding the advantages and cost savings associated with purchasing generic and mail order prescription drugs.
9.) Encourage employees to avoid the emergency room for routine services.
10.) Promote wellness and disease management programs offered by your health carrier.
Roger Howell is President and CEO of Howell Benefits located in Wilkes-Barre, Pennsylvania. He is a 31 year veteran of the employee benefits field, consults with hundreds of private/public corporations and non-profit organizations across the country and specializes in providing benefit strategy and solutions. He can be reached at rhowell@howellusa.com
For more information regarding Howell Benefits, log on to http://www.howellusa.com/