A commonality in many workplaces is the rift between employees and management when it comes to health care benefits. Employees usually accuse the company of being too frugal, and management is unable to find a compromise that makes everyone happy. In the end, employees of the company are left feeling like their hands are tied. Luckily, a recent session at the Society for Human Resource Management’s (SHRM) 2010 Annual Conference explained how one company, with fewer than 150 employees, saved around $2 million simply by creating a partnership between the employees and management staff. Together, the company was able cut the soaring costs of medical coverage while still providing excellent benefits to employees and their families. SHRM recommends an ongoing four-stage method to help control health care costs. Through evaluation, education, communication, and motivation, management and employees can work together to keep the costs of health care down.
Evaluation. Health insurance claims are processed by the provider or a third-party administrator, and in most cases, employers do not see the complete picture of how the benefits are being used. By requesting summative claims data, employers are able to see how money is being spent and who it’s going to.
An evaluation of claims data can reveal unnecessary expenses, like miscoded treatments, erroneous charges, and misuse of the system. Employers will also notice ways to cut costs without reducing the benefits, such as when employees are prescribed medicines that are either available over-the-counter or in the formulary. The data will provide insight into the amount of out-of-network care that is being used.
A thorough evaluation gives employers the information needed to better educate their employees on how to use their health benefits efficiently and eliminate unnecessary spending at the same time.
Education. Just as people tend to breeze through owner’s manuals and other instructions, the Explanation of Benefits statements from the insurance provider usually gets the same treatment. Without a complete understanding of how costs are determined and why rates go up, many employees operate under the guise that “if it’s covered, then just tack it on my bill.”
Meeting with small groups of employees is a great way to educate the staff on how the prices of their insurance premiums are related directly to how the employees, as a staff, use the insurance. Higher annual costs equal increased premiums for the following year and lower annual costs result in cheaper rates.
Give cost efficient suggestions to the staff, letting them know how they can help reduce the amount they spend each year. Recommend using only in-network physicians and clinics, and explain how doctors can provide samples of medication before writing expensive prescriptions for drugs that might not work. Since health care plans often cover the families of employees, make sure to host educational sessions where spouses can attend, as well.
Communication. Communicating the positives of cost effective health care coverage should begin at new employee orientation and continue throughout employment. Dedicating a wall or bulletin board to display current usage data and dollar figures is a key component to keeping employees up to speed on the state of their insurance programs. By making this general data known, employees are able to hold themselves accountable and see how the improvements they have made are affecting the system.
Motivation. With a little motivation from management, employees can see that their bosses are serious about reducing the amount they have to pay for insurance. Rewarding the employees when quarterly costs go down with picnics or even a one-month reprieve of premium charges can motivate the staff to continue to work toward more efficient health care usage.
