Employers are facing ever-increasing challenges in controlling costs while attempting to offer competitive benefits. A recent study indicates that healthcare costs will continue to grow faster than inflation at a rate of over 4%.
While there’s no silver bullet in combating rising healthcare costs, there are a variety of factors that can be identified. Knowing what’s driving up your healthcare costs can help in finding ways to control these costs without gutting your benefits offerings. These include the rising costs of procedures, especially among specialists, the increasing cost and quantity of prescription medications being dispensed, the advent of newer and more refined technological aids, patient inclination to seek out rapid care, and more. But what can we accomplish with this information?
Understanding where these excess costs are coming from will allow you and your benefits advisers to identify specific coverages or elements of a plan that can be reduced or eliminated. Often the amount you save will be significant enough that some of that money can go back into the benefits system for other, less costly services. It’s certainly a strategy of balance, and of finding ways to make your dollars go as far as they can for the company and those who work within it. Four of the key benefits choices to control costs include:
1. Level-funding company healthcare costs.
2. Provide a proactive wellness initiative.
3. Use a flexible contribution arrangement (FSA).
4. Use deductible exposure mitigation vehicles (HRAs).
Does your executive team and/or HR department understand these strategies and what they offer your organization? Are you aware of which ones you’re already using? Do you know which aspects of your benefits program prove least and most effective in terms of dollars spent? These are critical questions that should be asked and answered frequently. To learn more about benefits challenges and strategies to combat them, contact Chelten Consulting Group.