How are a bonsai tree and benefits management the same?
It might seem silly to compare a tiny, carefully maintained plant to benefits management — but the truth is they both require two very important things: constant attention and careful trimming.
Just as bonsai masters carefully trim their trees, benefits managers must carefully "trim" their benefits, ensuring that costs remain manageable and employees stay happy.
Cutting costs without cutting benefits is no easy task. There are a thousand different approaches you could take — but these three strategies strike a nice balance between long-term cost management, benefits satisfaction, and employee retention.
1. Do a full replacement HDHP, but offer a seeded HSA too.
Although switching to HDHP-only is a great strategy for cost containment, it can be a daunting transition.
Employees tend to describe HDHPs in negative terms, using adjectives like “risky” and “disappointing." Studies have also shown that employees on HDHPs are twice as likely to avoid medical care as those on a PPO.
When they're forced to switch to a HDHP, employees often feel like something is being taken away from them. The best way to combat this feeling is by offering something in return. When one door closes (your old, familiar PPO plans), another opens (a brand new HSA).
Your employees can only have an HSA if they have a HDHP. Make this a central part of your OE communications by explaining the various advantages of having an HSA and how it can save them money overall.
Better yet? Seed each employee's account with however much you can, at least for the first year. Not only is it a sign of good faith — it will help get your employees started on the right foot so they continue to engage with their HSA in the future.
2. Keep employees out of expensive care settings.
There's no better way to reduce your healthcare costs than by targeting the areas that are busting your budget in the first place. Yes, premiums are increasing each year — but why? The underlying cause is often a small handful of cost drivers.
Every company's claims composition is different, but here are a few that might be relevant:
Unnecessary ER visits
Imaging (MRIs, CT scans, X-rays, ultrasounds might even account for 30-40% of your total spend)
Common cost drivers like these can't be eliminated. Employees will always need these kinds of care. But they can be mitigated by keeping employees out of the most expensive care settings.
In practice, this means:
Urgent care instead of the ER, when appropriate
Freestanding imaging centers instead of hospitals imaging centers
Telemedicine consultations instead of in-person doctor's office visits
Ambulatory surgery centers (ASCs) instead of hospitals, when appropriate
It's one thing to buy into this strategy in theory — but it's a whole other ball game to actually put it into practice. This requires real behavior change from your employees.
If this is something you're interested in learning more about, check out how Amino does it via personalized guidance. (If an employee needs hernia surgery, for example, Amino will automatically guide them to in-network ASCs rather than hospitals.)
3. Help employees find high quality, low cost providers.
No matter what types of plans you offer or which insurance provider you work with, one thing is always true: healthcare costs vary wildly — even within network.
One of the most common employee misconceptions about healthcare costs is that if they stay in-network, they don't have to worry about cost. This might have been true 10 years ago. But today, providers within the same network often charge wildly different prices for similar care.
If you offer a HDHP, the burden of this cost variation might be on your employees — until they hit their deductible, at least. But if you offer a PPO (or if your HDHP employees exceed their deductible), the cost of going to an expensive doctor directly affects your bottom line.
This is why it's so important to offer employees the resources they need to find high quality, low cost providers who accept their insurance.
It requires upfront investment in tools or services that integrate directly with your health plans to offer this personalized guidance. But in the long-run, it will pay off in the form of cost reduction, employee retention, and overall benefits satisfaction.