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Friday, Mar 29, 2024

Healthcare Cost Containment Solutions Can be Made Now

It’s no secret that health care benefits have become one of the largest, fastest growing and most significant expenses for American companies. With no end in sight to crippling increases, many companies are seeking more innovative and effective strategies to keep costs in check. While traditional strategies, like cost shifting to employees and increasing co-pays, deductibles, or lifetime limits, are used by most employers through 2007, industry experts say innovative approaches may be the best way to control rising costs in the long run. Key trends reported by health care consulting firm Watson Wyatt Worldwide provide insight into what employers are doing to realize these long-range goals. A growing number of companies are utilizing the following cost-containment ideas: 1. Incentives for healthy behaviors: More companies are offering financial incentives to employees who have healthy lifestyle behaviors or participate in wellness, fitness and weight reduction programs. 2. “Full coverage” for preventive care benefits: Employers are covering preventive medical care and not subjecting them to a deductible. Included in these fully- paid benefits are vaccinations, exams and screenings for early diagnosis and intervention in breast, colon, and cervical cancers. 3. Wellness programs including health coaches/onsite health centers: A growing number of employers offer access to health coaches, nurse hotlines, and health advocates. Individualized advice is provided to workers on personal health care needs to educate employees about the best care and what questions to ask their providers. Many health insurance carriers’ websites provide extensive online tools to support healthy lifestyles and change behavior. 4. Consumer-driven health plans. Consumer-driven health plans such as Health savings accounts (HSAs) and health reimbursement accounts (HRAs) continue to grow in popularity. 5. Voluntary benefits (paid by the employee) to meet individual needs: Companies are offering a variety of benefits such as: homeowners, automobile, long-term care insurance, supplemental life, pet insurance, and Section 529 programs. 6. Web-based personal health care management: Employers are providing online tools to help employees evaluate and estimate their health care expenses and needs. Employers interested in offering wellness programs must consider a variety of legal issues before implementing them in their organization. Depending on the nature of the program and the incentives, wellness programs may call into play the Employment Retirement Income Security Act (ERISA), the American with Disabilities Act (ADA) and IRS tax considerations. The good news is that wellness programs can be designed with relatively little legal risk. Employers need to be sensitive to their company culture to minimize resistance to new programs. Human resource professionals need to know what employees like and what their hot buttons are. Companies like Dole Foods are finding that employees’ initial resistance to new programs have not prevented them from participating in innovative options, according to Jennifer Grossman, Vice-President of Dole Foods, and the Director of the Dole Nutrition Institute. One year after launching their wellness program, Dole saw a 31% drop in claims paid, coupled with a 19% reduction in the amount of the overall claims paid. Health insurance premium audits are emerging as another cost containment measure. It’s only natural to analyze health insurance, one of any company’s largest expenses. Common Sense Tips In an episode of the Drew Carey show, Drew’s dog needed a hip replacement but Drew could not afford it so he claimed the animal was his gay husband to get coverage under his employers’ medical plan. More and more employers are auditing their health plans and requiring employees to prove eligibility. – Regularly audit medical invoices to make sure that only eligible and dependents are being paid for. At any given time, 10 percent of dependent members are ineligible according to HR Best Practices, a third party healthcare administrator. – Encourage generic prescription drug utilization instead of brand name drugs when appropriate. Prescriptions account for up to 21 percent of the premium dollar and for many, prescription costs are at the top of the list when considering health plans. – Educate employees about convenient 24-hour nurse help lines which can be useful to determine if a visit to the emergency room or even the primary care doctor is necessary. – Consider financial rewards for employees that enroll on their spouse’s medical plan. Require proof of coverage to be sure the employee is actually covered, though. – Conducting regular audits of the healthcare bills. One audit reflected more than $200,000 in recoveries related to several erroneous claim payments made in conjunction with a Medicare-eligible case. – Direct employees injured on the job to the industrial medical center or occupational care center for treatment rather than to their primary care physician. In today’s business environment, no firm can afford to stand on the sidelines and ignore active management of their health insurance program. Barbara C. Oberman is the CEO of Barbara C. Oberman Insurance Services, Inc. in Calabasas, a professional employee benefits insurance brokerage and consulting firm. She is also secretary of the Consultants Association for the Natural Products Industry. Reach her at [email protected].

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