At many organizations, health care insurance coverage is a key benefit to attract and retain employees. Particularly in the current landscape, where the cost of health care services are increasingly on the rise, employers must ensure that they offer benefits that adapt to their industry and culture while keeping costs under control.
Today, we'll take a closer look at the causes of this health care cost increase, and how Triton Benefits & HR Solutions can enable you to design the ideal benefits package for your organization.
Why are health care costs increasing?
According to our own Triton Benefits Toolkit, "Mitigating Health Care Costs," overall spending on health care services from 1996 to 2015 increased by almost $1 trillion. At the same time, the typical premium for individuals rose 3%, and the premium for family coverage increased by 5%, according to the Kaiser Family Foundation.
There are few reasons behind this sharp rise in health care costs, including:
- Considerably increasing prescription drug prices.
- Rise in the frequency of chronic conditions.
- An aging population, which is using health care services much more often.
- Low health literacy.
How can employers address these needs?
Rising health care costs put significant stress on staff members, particularly as the price of not only services but insurance coverage premiums continue to rise. What's more, as these costs increase, it also puts a strain on employer benefit plans to absorb some of this financial burden and support their workers.
"With the growing epidemic of poor health and the overall impact of health care reform, many employers are looking at both short- and long-term strategies to manage costs, which include making plan design changes, focusing on employee well-being and education, and implementing additional benefits offerings," our Triton Benefits Toolkit noted.
There are a few key approaches that employers should consider with their benefits plans, such as:
- Offering different types of health plan designs, including self-funded, level-funded, high deductible health plans, reference-based pricing and/or direct primary care.
- Helping to reduce the cost of prescription drugs by encouraging the use of generic medications and/or offering a mail-order program.
- Encouraging utilization of telemedicine and nurse advice lines to reduce doctor office visits, enable patient cost savings and improve access to specialist services.
- Leveraging case management services, such as those for large case management, disease case management or wellness case management.
These strategies only scratch the surface here, and there are additional steps your business should take to ensure these approaches are successful. To find out more about how to implement these strategies within your employee benefits plan design, download your Benefits Toolkit today.