The nation’s largest employers don’t anticipate finding cost-relief any time soon when it comes to health and benefits coverage. But they have been listening more and waking up to ideas from their brokers that could help them turn the cost curve in the long run.
Regardless of how the U.S. Supreme Court rules on the Patient Protection and Affordable Care Act, many of the reform strategies launched by employers and the insurance industry will move forward, according to Rebecca Knoll Lawrence, J.D., assistant vice president, National Legal and Research Group for Willis North America, Human Capital Practice. (The decision had not been handed down as of IJ Magazine’s deadline.)
Group plan premium increases are nothing new — health costs have been going up for decades.
Also, the cost of compliance with federal healthcare reform is just one factor driving up costs for employers.
But employers today seem to have a new appreciation that the rising costs need to be addressed and that there are ways to do this. Reality is creating a new and more attentive employer audience when it comes to considering health and benefit options, Lawrence says.
“For the first time in the last year or two, we’ve had an awakened audience that says, ‘Oh, I see where thinking about benefits as a whole can be beneficial,” she says.
It’s not just about the insurance premium or an employer’s self insured plan, she says. Employers must examine their benefits strategy as a whole and think about how other methods of cost control can help the bottom line.
In today’s healthcare environment, employers need to look at wellness programs, bonus structures, vacation plans, and employee assistance plans as ways to counterbalance rising healthcare costs, Lawrence says.
Willis has long advocated that employers explore health and benefits features that impact overall cost, but interest in these cost control options has accelerated as employers have been coming to terms with the compliance mandates under the federal healthcare reform act.
“We (Willis) have always been pushing other methods of cost control and thinking about benefits as whole, but what I think we have experienced is a lot more interest and engagement when we talk about these issues,” she says. “Brokers need to be thinking about all of those aspects and not just about the bottom line healthcare costs.”
There are a lot of other ways to head-off rising premiums, she says.
“Enhance the operation of the benefit plan, but also move money from one area to another to stabilize the whole offering of benefits, and non-health perks that a company can provide,” she says. Push really hard on the strategic planning, and work more on a nitty-gritty level with employers that now see how such planning can impact their company, she says.
Experience and resources in the health and benefits sector will play a big role moving forward regardless of the Supreme Court ruling, Lawrence says.
“If an employer wants to look at healthcare reform after the Supreme Court decision and figure out what impact it’s going to have on them, how they can plan, and how they can move forward, then they need to bring in expertise from a number of areas,” she says.
Employers, in particular large employers, will need analytics and benchmarking to see what their competitors are doing, she says. They will need to look at market trends and legal requirements as well as HR trends. Most important, she says, employers “need to find someone that can bring all of that expertise to them.”
The need for heightened expertise may leave small employers at a disadvantage, Lawrence says.
“Large employers have certain needs, certain healthcare goals, certain financial penalties … They have slightly different concerns than small employers.”
Small employers may end up getting neglected in a post-reform healthcare world, Lawrence says.
“The impact of healthcare reform could be even-more harsh on a small employer because they may not have resources to guide them through reform compliance concerns. Instead, small employers may make decisions that result in negative employee morale. Small employers are also generally less inclined to consider a total rewards strategy for their employees,” she says. For that reason, the role of insurance agents and brokers will become increasing important.
“It behooves small employers to make sure they are working closely with their broker, working closer with their outside counsel, and effectively using tax advisors to determine what needs to be done with regard to healthcare reform and resulting plan changes.”
Fully-insured small employers can rely to a certain extent on their carriers.
“Those carriers have to comply with federal and state law,” Lawrence says. “So a small employer is going to receive some benefit just by placing fully insured benefits because they can rely somewhat on the insurance carrier. But a small employer is still going to need to look at healthcare reform requirements, what kind of employee growth is projected, and the resulting plan design pricing for next year.”
Whatever they do, no matter their size, employers can’t do nothing.
“Small employers should definitely not sit back and think that everything is fine and that all they need to do is place the insurance,” she says. “Even a small employer needs to think about total rewards and how benefits and compensation and company perks work together to attract employees and provide a total rewards package that makes sense for the company.”
In the end, employers must decide what’s most important to them when it comes to health and benefits coverage.
“They need to take a comprehensive, holistic approach and look at their vacation plan and voluntary benefits. Perhaps the employer may want to incorporate more non-employer sponsored benefits that employees would appreciate, but at the same time do not cost the company money on the front end.”