A recent KeyBank survey of middle-market companies, with $20 million to $4 billion in revenues, asked responders to identify expenses which, if changed, would have the biggest impact on their businesses. Fifty percent identified employee health care costs as number one.
Respondents were then asked which expenses they expected would substantially increase in the next six months ”” and employee health care ranked number one again.
With the ongoing congressional gridlock over the Affordable Care Act, it”™s no surprise the future of health care in this country is weighing heavily on the minds of businesses and consumers alike. Coupled with a tightening job market where competitive benefits are essential for acquiring and retaining talent, it”™s only natural that employers foresee rising health care costs impacting their bottom lines.
What can employers do to offer competitive benefits packages while effectively managing plan costs? Having a trusted benefits advisor is a good first step.
An employee benefits consultant should do more than quote insurance plans and try to reduce premiums. He or she should work in partnership with clients to implement long-term, tailored benefits strategies that address the total cost of human capital, relieve administrative burden and offer robust employee benefits with a focus on wellness and driving healthy behaviors. A proactive benefits consultant will also keep clients “in the know” of ever-changing health care industry trends and compliance requirements.
Here are some ways an independent benefits consultant can bring value to employers.
HELP CLIENTS UNDERSTAND AND EFFECTIVELY MANAGE PRESCRIPTION DRUG PLANS PRICING, ONE OF THE KEY DRIVERS OF HEALTH CARE EXPENSES
Pharmacy expenses are, by far, the highest trending area of employee benefits today. The price of prescription drugs and the amount of specialty drugs available for treatment have exploded in the last few decades. In the mid-1990s there were less than 30 specialty drugs on the market; by 2015 there were 300, and that number increases each year. With many medications costing in the tens of thousands of dollars or more for a single course of treatment, it”™s no wonder plan costs have skyrocketed.
Being educated on how the Pharmaceutical Benefits Managers (PBMs) price brand and generic drugs, what preferred and nonpreferred tiers mean and how discounts, rebates and formularies work is essential for negotiating the best plan pricing for your employees and company. A trusted, independent benefits consultant can work with employers and PBMs to carve out prescription drug plans for better control and pricing.
MAKE WELLNESS PROGRAMS A FOCUS IN EMPLOYEE BENEFITS PACKAGES
There is a large body of scientific evidence that shows 50 percent to 80 percent of illnesses treated today are the result of lifestyle choices ”” what we eat, drink, smoke and how much physical activity we engage in ”” or not. The more employers can do to encourage healthier choices in their workforce, the more they can drive health care savings for their employees and businesses.
A trusted benefits consultant can help a company develop wellness incentives that drive healthy lifestyle decisions ”” like joining a gym, engaging in quality weight loss programs, getting regular health screenings, flu shots and other preventative services. Company leaders can also be counseled on how they can build a healthy workplace culture by modeling healthy behavior themselves, such as being physically fit and maintaining good nutritional habits.
Even something as simple as replacing donuts with fresh fruit at breakfast meetings and offering walking and weight loss programs during lunch can make
a difference.
HELP EMPLOYERS STAY ABREAST OF EVER-CHANGING REGULATORY REQUIREMENTS AND THEIR IMPACT TO THE BUSINESS
One thing that is clear about the ACA is that it will remain in effect for at least the foreseeable future, so employers must continue to comply with its regulations. Helping a business manage compliance requirements and understand the business impact of new and proposed changes is an important value that a benefits consultant brings to the table. For example, Key Insurance & Benefits Services hosts regular webinars and workshops on a variety of regulatory issues and works one on one with clients to design and implement effective strategies to managing compliance processes and costs.
Clearly, the future of health care reform is uncertain and that uncertainty is a cause for concern for businesses and consumers alike. With relatively little control over rising medical and insurance costs, business owners and executives can still make smart, cost-effective decisions on their employee benefits packages. Partnering with a knowledgeable, independent and proactive benefits consultant for guidance and representation with benefits providers is an essential starting point.
Matthew Fair is vice president, benefits consulting in the Norwalk office of Key Insurance & Benefits Services, a licensed insurance broker and agent and subsidiary of KeyBank. His team serves more than 200 business clients in Connecticut and the New York metro area. He can be reached at 203-854-3419 and matt.fair@key.insurance.
