With Ohio health insurance premiums on average increasing by 4% from 2021 to 2022, organizations need to start exploring different strategies for reducing costs.
Here are some of the most effective ways employers can reduce health care costs.
Top Ways Organizations Can Lower Health Insurance Costs
There are many ways for employers to reduce health insurance costs, ranging from health insurance plan changes to benefits programs focused on health and well-being. Since every business is different and employees have different needs, it’s important to consider what strategies make sense for your organization.
For more thoughts from ERC President Kelly Keefe, check out our article on .
Implement Wellness Programs That Promote Healthy Employee Lifestyles
When it comes to insurance costs, much of the cost is tied to the health of your employees — the healthier they are, the lower the monthly health insurance premiums will be. However, it’s ultimately up to the individual to commit to a healthier lifestyle.
Although the responsibility lies with employees, employers can still play a significant role in fostering an organizational culture of wellness.
One of the biggest hurdles for people looking to adopt a healthier lifestyle is finding the resources and support to get started. Working with a company like ERChealth can help provide the guidance your employees need to reach their personal goals.
Clients of ERChealth have access to the following resources:
- Suite of reward programs — Reward employees and covered spouses for participating in programs focused on health and overall well-being.
- Dedicated wellness consultants — Wellness consultants provide support and guidance in developing wellness plans, setting goals, and tracking progress.
- Anthem health guides — Health Guides can help employees stay on top of exams, tests, or preventive screenings, compare costs of health care services, find in-network doctors, and much more.
- ERChealth app — Employees can access wellness programming, peer challenges, and education modules all from within the app.
- Aggregate biometric report & evaluation — By collecting and analyzing biometric data, organizations can get a much clearer picture of the overall health of their employees.
For organizations, the biggest challenge is often motivating employees to take part in the wellness program. Often, one effective way to encourage participation is through incentives like a rewards program.
ERChealth offers a wide variety of programs that employers can use to reward employees and their spouses for participation, including:
- Health Assessment — A report created for each individual employee to receive a snapshot of their health.
- Be Active Program — Members can earn monthly rewards for getting physically active.
- Diabetes Risk Quiz — Helping members understand if they are at risk for developing diabetes and providing the support needed to reclaim their health.
- Future Moms — Get rewarded for enrolling to receive the information, tools, and resources you need for a healthy pregnancy, delivery, and baby.
- ConditionCare Disease Management — A complimentary program for the management of certain chronic health conditions, including asthma, COPD, coronary artery disease (CAD), diabetes, and heart failure.
- Well-Being Coach — A program designed for individuals interested in improving their health and wellness, with optional coaching for those interested in losing weight or tobacco cessation.
Do Workplace Wellness Programs Reduce Medical Costs?
While a workplace wellness program may not directly reduce medical costs, it does address one element of it — high-risk factors.
High-risk factors are characteristics or behaviors that increase a person’s likelihood of developing a serious or chronic illness or of being injured. These factors include a person’s age, gender, family medical history, lifestyle habits, and certain medical conditions.
Since insurance companies assign rates based on an individual’s overall health, encouraging a healthy lifestyle can have significant savings benefits. If an employee were to have high-risk factors such as smoking, diabetes, or obesity, they would be more costly to insure than someone considered low-risk. On the other hand, if a person has few or no known risk factors, their premiums may be lower because the insurance company expects to pay less for their health care.
Having a workplace wellness program in place offers employees the resources and guidance they need to pursue a healthy lifestyle. Over time, health care costs can decrease as employees move into lower-risk categories.
According to a study by the CDC, “well-implemented workplace health programs could lead to 25% savings on absenteeism, health care costs, and workers’ compensation and disability management claims costs.”
Wellness and Health Screenings
Screenings are critical elements of a thriving culture built on health and wellness. Early screening is one of the best ways to catch diseases and high-risk factors before they become more serious. With these early detection programs, employers can assist employees in keeping risk factors and premiums low.
Review Benefit Packages and Make Changes as Needed
Another effective way of reducing employer health care costs is to review benefits packages yearly and make appropriate changes as necessary. Having a set cadence for analyzing your current benefits and how employees are engaging with the benefits will provide crucial insight into areas you can adjust to save money.
Compare Insurance Plans
An easy first step in the review process is to start by comparing your current company insurance plan against other options in the marketplace. It’s common for insurance providers to update rates throughout the year, which could impact employer health care costs or the rates that employees pay.
When comparing your plan with others, you’ll want to consider items that affect the company’s cost and employees’ costs. Elements such as deductibles, co-pays, network coverage, and out-of-pocket costs could all impact how much your staff pays for healthcare coverage.
One insurance option that often comes with a lower monthly payment for employers and employees is a high-deductible health plan. These health plans are a great way to save money thanks to the reduced premium price. Some high-deductible plans also have the option of setting up a tax-free HSA account to help pay for medical expenses.
However, it’s important to note that while the monthly costs are cheaper, the out-of-pocket expenses for a high-deductible plan are usually higher than a normal policy.
Does an HRA (Health Reimbursem*nt Arrangement) Make Sense for Your Business?
An HRA can be an excellent option for employers looking for an affordable and flexible way to provide health benefits to employees. Not only does it allow companies to better control healthcare costs by setting a budget-friendly allowance, but it also offers the following advantages:
- Allows employers to contribute tax-deferred contributions and offers payroll tax exemptions
- Assists in boosting benefits package without major investment on the employer’s part
- Offers a lower-risk alternative to other healthcare options
If you’re considering setting up an HRA for your business, it’s important to understand how it works. The following guide will provide insight into the five main steps of the health reimbursem*nt arrangement.
Review Benefit Utilization Data
A standard review process can provide crucial information for determining if current benefits and wellness programs are effectively helping employees live healthier lifestyles. Throughout conversations, team members might reveal that they don’t see the value in a specific benefit. This information allows the employer to evaluate the value of each benefit in their package.
Invest in Technology That Improves Efficiency and Reduces Costs
One popular strategy for reducing employer health care costs is investing in wellness-based technology. While some tech solutions tend to be costly, several affordable options are available, including fitness trackers, online rewards programs, and telemedicine solutions.
Fitness trackers
Fitness trackers are a great way for employees to monitor their fitness goals and provide information on activity levels, heart rate, and step counts. These wearable devices also offer extra motivation for employees by showcasing progress towards specific milestones.
Online Rewards Program
Many people see living a healthy lifestyle as challenging and time-consuming. However, more people are likely to join the program by adding incentives and making the process fun. One way to do this is through an online rewards program.
Organizations can set up an online rewards program that allows employees to collect points or perks based on participation in specific activities. Often, the offer of an extra day of PTO or a free lunch will be enough to encourage participation in your wellness program.
Telemedicine vs. In-Person Medical Visits
Telehealth appointments have become more popular over the last few years. These online medical visits offer an alternative for employees who want to avoid spending additional money to see a doctor in person. They can also be a great way to avoid going to the emergency room for a mild sickness.
Educate Employees About the Cost of Health Care and How They Can Help Control Expenses
One additional way employers can reduce overall costs is by educating employees on the actual cost of care and the implications of their health care decisions. Offering resources and guides on making educated health care decisions, taking advantage of a wellness program, and taking preventive care measures can help team members take a more active role in controlling costs.
Preventive Care Planning
One of the best ways to lower health care costs for employees and employers is through preventive care services. In most instances, preventive services can help detect health issues through screenings and tests before they become significant issues.
Early detection methods often catch diseases and illnesses in the beginning stages when they are easier to treat. Since they require less medical intervention, finding these health concerns early can also mean lower health care costs down the road.
Encourage Healthy Eating Habits and Physical Activities
Another element to educate your staff on is the importance of healthy eating habits and physical activities. Encouraging your team to try healthy alternatives for snacks and lunches can benefit their health and reduce employer health care costs.
Larger employers can support their teams on this initiative by offering a cafeteria onsite. Fresh food options prepared daily will allow employees to eat a healthy meal without running out for a fast food alternative during their lunch break. However, a cafeteria isn’t the only way to help your employees eat healthier.
In fact, even adding a vending machine with healthier options like fruits, energy bars, and nuts can be a great way to support a culture focused on health and wellness. Organizations can also include a healthy eating newsletter or access to a nutritionist as part of their wellness program.
Physical activities can also be a great way to keep staff active and on their way to a healthier lifestyle. Try offering to create a recreational team for your company that allows employees to play a sport like volleyball or softball. These teams are a great way to encourage physical activity and can help foster relationships within the organization.
You may also consider adding a few other fun physical activity options, such as:
- On-site gym or fitness center
- Yoga
- Walking/running club
- Gym
Promote Work/Life Balance
While every employer wants their employees to be engaged with work, it shouldn’t jeopardize their health or personal life. Promoting a culture that values work/life balance can help reduce employee stress.
In fact, a study conducted by the Cleveland Clinic found that employees who couldn’t disconnect from work and worked more than 55 hours had a higher risk of strokes and coronary artery disease. Therefore, by encouraging your employees to maintain a healthy work/life balance, you’re limiting the risk of increased health care expenses.
Provide Resources and Support for Mental Health
Even though mental health has always been prevalent, it hasn’t gotten much attention in the business world until recently. A recent study by Mind Share Partners, Qualtrics, and SAP found that nearly 42% of global employees had declined mental health since the COVID-19 pandemic began.
In a survey of the top Northeast Ohio employers, 95% of organizations have an EAP (employee assistance program) to support employees’ mental health and wellbeing, and provide resources and support to help them resolve any issues they may be having.
As more people talk about their battles with depression and other mental health issues, many employers are starting to look at new ways to support their staff.
Offering additional resources and making counseling available to team members is a great way to create a safe environment for employees. Focusing on mental health can also have a positive impact on the productivity of your team.
