Healthcare costs are rising. Experts are predicting a 5-7% increase by the end of 2022.
Over the last couple of years during the pandemic, most people deferred health care services. Elective treatments like knee surgeries or hip replacements were either postponed by their doctor or hospital or were cancelled by the employee. Combined with the early part of the pandemic when the federal government was paying for all COVID related claims, taking employees off the liability of the insurance company, you now start to see why we’re seeing a humongous increase in consumption of healthcare across the country. Government’s no longer paying for COVID and people are beginning to access care they’d previously put off.
This increase in health insurance premiums is happening at exactly the wrong time, as employers are trying to attract and retain talent in one of the tightest labor markets ever. So, what can you do as an employer who’s looking to balance the rising costs of healthcare with wanting to provide rich benefit programs to attract and retain your staff?
Here are four strategies we think should be considered:
1. Partial Self Funding
Take a fresh look at partial self funding. This is a newer approach in California and they’ve traditionally been limited to larger employers, but they’re now being offered to companies with as low as 25 employees. In these programs, employers and the insurance company agree to share in the basic cost of care and administration, with the opportunity to reduce claims and save money. These are a great option for employers who are interested in being proactive in helping their employees be healthy, stay healthy, and manage their health.
2. Newer Companies in the Marketplace
A new insurance company has come into the marketplace and has really a different approach to offering healthcare; we think it’s what the future of healthcare looks like in this country. It may not be for everybody but for the right employer, this could be a great fit. Learn more about it here.
3. High Deductible Health Plans
HSAs and high deductible health plans, as they are referred to, are currently being used by almost 50% of employees across the nation. On the surface, these plans might seem unattractive in a tight labor market because they come with $4-5K deductibles. But there are a lot of different strategies out there an employer can put in place that can soften those deductibles. They can also put in other benefits to make up the difference, contact us to learn how.
4. Wellness Programs
No matter what industry you’re in, what size your company is, or what demographic you employ, integrating wellness programs is going to impact your population both culturally and physically. In the long run, this is going to provide more opportunities for your company to potentially leverage wellness as a cost savings tool as health plans evolve. Currently, insurance companies are talking about changing health plans to include lower rates if companies include a wellness program. It hasn’t been implemented yet but it’s on the horizon.
Early indications are that we could see increases of up to 20% in both the employer and individual market in the coming year. That’s a huge cost. So, don’t have this conversation at renewal when you’re staring at a 20% rate increase, trying to figure out what to do. Have the conversation now so you’re working with someone you can trust who knows the market well and has a solid strategy going into the renewal.
If you’re interested in some new ideas in healthcare, consult with us today to learn more about how we can make these plans work for you and your budget. Email us at email@example.com or give us a call at (818) 377-7260 today.