Four Critical Strategies in Combating Rising Benefits Costs

employee benefits graphicEmployers 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.

Cadillac Tax Still 45 Months Out, but Impact Already Here

shutterstock_174966584 - CopyAs the Cadillac tax draws closer to assessment, many businesses are growing more cautious regarding employee HSA contributions. Since 2014, HSA enrollment has increased 10.7%, according to new survey data from United Benefit Advisors. This large-scale survey of employer-sponsored health plans found that overall enrollment in HSAs is increasing, while employer contributions are not.

The Cadillac tax comes into effect January 1, 2020, but is already demonstrating significant influence on employee benefits planning Рparticularly with regard to HSA. Looking at HSA performance by industry, the UBA survey finds:

  • Government employers offer the most generous contributions at an average $834 for singles and $1,636 for families.
  • Families and individuals in the hospitality and foodservice industries received less than $200 in employer contributions.
  • While most industries have seen steady growth in HSA enrollment, the utilities sector not only has the lowest enrollment at 3.2%, but is also the only industry to see a decline in enrollment from three years ago.

To learn more about benefits compliance and solutions, contact us.