An executive order that was signed by President Donald Trump on 24th June has made history, with impending benefits for businesses and individuals alike. The official order is destined to give American consumers more information about the cost and quality of health-care services. This will allow consumers to make better choices with more apparent price comparisons. Ultimately this enables consumers to save money. Businesses looking to provide their workers with a cost-effective, employee benefits plan will benefit greatly.
In this article by Pacific Prime, we will discuss how corporate businesses can contain the cost of providing employee benefits while ensuring they can meet the needs of their employees.
Cost containment for businesses
Cost containment is the business practice of maintaining expense levels to prevent unnecessary spending. This practice helps to reduce expenses to improve profitability without long-term damage to the company. On the subject of employee benefit plans, companies can employ several cost-containment measures that are fundamental to keeping premiums low.
The rise in premiums for businesses
When it comes to health insurance, both individual clients and companies can always expect that their insurance premiums will rise. A rise in premiums may occur due to frequent claims by employees or single claims that are significant in cost. However, premiums are also affected by health insurance inflation, and many other factors, for example, the costly technology that helps in the diagnosis and treatment of health conditions, which is passed on to claimants.
Cost containment policies
Since always, employers and managers try to find a perfect balance between competitive benefits packages and manageable costs. However, decision-makers may sometimes lack the knowledge and expertise of the insurance industry, hence why engaging with an insurance broker such as Pacific Prime will make the whole process simpler and more manageable.
We have provided some measures that businesses can implement to contain health insurance costs for their employees:
Introducing co-payments
Co-payment is a cost-sharing technique and refers to how health plan costs are shared between the employees and employer. Companies can offer comprehensive health plans for their employees but are not bearing the full cost of it. Employees would pay a flat fee at the time of the service with the remaining cost covered by the employer.
Limiting cover to specific hospitals with lower treatment costs
It may be ideal to select the hospitals that you know will offer the best care for your employees. Choosing healthcare providers in your plan that do not charge extortionate prices may reduce insurance premiums in the long run. Generally, the costs are lower when you go for in-network medical specialists because insurance companies contract lower rates with an in-network provider.
Adjusting benefits to target only those who need them
As the needs of the workforce grow, businesses will need to move towards employee benefits plans that have components designed to make their company attractive to current and potential employees alike. This also means turning to more flexible plans to better cater to the desires of the workforce. That way employees can choose the benefits they want the most from the employee benefits package: be it health insurance, retirement scheme or a wellness program.
Moreover, flexible plans allow decision-makers such as a business's Human Resource department, to revise certain benefits and potentially lower costs. Additionally, to ease the financial burden to the business, employers can consider individualizing healthcare benefits.
Introducing a wellness program
Happiness is essential in the workplace as it lowers the rate in which employees are off sick. A well-thought wellness program increases employee engagement and at the same by providing a rich culture of health, which has the potential to decrease a company's healthcare costs. Healthy employees see doctors less and take less sick leave days off. They also perform better, and ultimately, are more stable and yield better results for the employer overall.
Use of technological tools
The 21st century has been witnessing many technological trends. There are many advances, influencing the way employees view their benefits. On the other hand, technology helps businesses reduce expenses like administrative costs relating to employee health insurance plans.
Employees can access online employee benefits portals that provide them with information and details of their employee benefits plans. Having this in place means HR managers can focus on other aspects of the business such as training and recruitment.
Further to cutting down costs is the use of 'virtual healthcare' platforms on devices that give employees direct access to the answers to all non-emergency questions. Employees can get immediate access to a medical specialist by a video-conference. This means employees can get help without visiting a clinic.
Utilizing chatbots and AI
Chatbots are a feature that allows policyholders to ask questions and even make health claims. They speed up customer service processes, which usually take a long time and is heavy on resources.
The rise of artificial intelligence has been playing a large role in helping businesses to cut down cost and reduce fraud relating to false health claims. Fraud is costly to companies and impedes the growth and profitability of businesses.
How Pacific Prime can help your business contain health insurance costs?
As one of the world's leading employee benefits insurance brokerage firm, Pacific Prime can help you design and implement a suitable group health insurance and employee benefits plan for your business.
Over a 17 year period, we have designed a unique broker framework model that is designed, to be consultative, competitive, and comprehensive.
For more information about our global health insurance and finding out the latest in the insurance world, visit Pacific Prime's website and access the Prime Guides page for more resources such as reports and health insurance guides.
Contact our team today for more information!
