How to control healthcare costs continues to dominate discussions among benefit administrators, chief financial
officers, CEOs, insurance brokers and health benefit companies. Whenever you lower your costs, your employees often react by thinking they will receive fewer benefits.
Offering a choice of plans, having a sensible contribution strategy and providing employee education can take costs down and satisfy employees.
Choice, choice, choice
Offering an option in benefit plans, choice in network access and choice in monthly costs are some of the best ways to help keep medical care costs affordable. Whether you've 20 employees or 1,000, look for a health benefits company that can offer you several plans for employees to choose from.
Typically, employers offer almost no choice in health benefit plans. Successful benefit administrators recognize that every employee has unique medical care needs. Why not offer employees 3 or 4 plans to choose from?
The level of benefits employees choose will relate straight to just how much they utilize health care services and what they are able to afford.
Most health benefit companies offer the following kinds of plans.
Traditional HMO
Lowest-cost plan, all care is coordinated with a primary care physician; employee must stay in network
Open access
A somewhat higher-priced plan allowing the employee the freedom to selfrefer to specialists in the network. More freedom equals a greater cost.
Point of Service (POS)
A less affordable plan for most, with more freedom; employee can access HMO benefits/network and/or pay higher co-insurance and choose any doctor
Preferred Provider Organization plan (PPO)
Greatest freedom, highest cost; total network access and out-of-network benefit, self-refer to specialist
Creating a contribution strategy
Given that you have chose to partner with a carrier that may offer your employees the choices they need, how do you stay within your company's budget? The solution is simple - be fair and consistent by implementing a definite contribution strategy that matches your company's budget. This process may be accomplished in two easy steps.
1. Determine what dollar amount per employee your organization can afford.
2. Select a carrier that can offer you four plans that'll satisfy your employees'healthcare needs.
Here's a typical example of how a defined contributions strategy could work for you (based on a health benefits budget of $180 per employee, per month).
In the example in the chart above, your company accomplished two extremely important goals: You controlled your company's costs
and you offered your employees choices.
With a defined contributions strategy, your employees are in charge of evaluating what they want and simply how much they're prepared to pay.
A choice of plans with a definite contribution strategy is two-thirds of the employer's cost saving equation. By the addition of employee education, you can visit a change in behavior that will lead to significant savings. The more informed employees are about the true cost of health care and how their choices directly affect their pocketbook, the much more likely they're to become "partners" in controlling costs.
Most health benefit carriers provide members having an Explanation of Benefits for all claims processed, which contains the price of services. Web-based tools offer plan information and are user-friendly. At workshops and mandatory open enrollment educational meetings, employees can speak directly with a carrier representative.
As medical health insurance premiums continue to increase and more employers face very difficult decisions, offering a choice of plans can keep your employees happy and satisfy your bottom line.
Author Bio
CATHY AGUIRRE, vice president of account services for VISTA, has a lot more than 18 years of experience in managed care marketing. Aguirre provides leadership for every one of VISTA's commercial accounts, including Broward County government, The School Board of Broward County, Broward Sheriff's Office, Miami-Dade Government, Sears, Walgreen's and United Airlines. Reach her at (954) 965-3471 or cathy.aguirre@vistahealthplan.com
officers, CEOs, insurance brokers and health benefit companies. Whenever you lower your costs, your employees often react by thinking they will receive fewer benefits.
Offering a choice of plans, having a sensible contribution strategy and providing employee education can take costs down and satisfy employees.
Choice, choice, choice
Offering an option in benefit plans, choice in network access and choice in monthly costs are some of the best ways to help keep medical care costs affordable. Whether you've 20 employees or 1,000, look for a health benefits company that can offer you several plans for employees to choose from.
Typically, employers offer almost no choice in health benefit plans. Successful benefit administrators recognize that every employee has unique medical care needs. Why not offer employees 3 or 4 plans to choose from?
The level of benefits employees choose will relate straight to just how much they utilize health care services and what they are able to afford.
Most health benefit companies offer the following kinds of plans.
Traditional HMO
Lowest-cost plan, all care is coordinated with a primary care physician; employee must stay in network
Open access
A somewhat higher-priced plan allowing the employee the freedom to selfrefer to specialists in the network. More freedom equals a greater cost.
Point of Service (POS)
A less affordable plan for most, with more freedom; employee can access HMO benefits/network and/or pay higher co-insurance and choose any doctor
Preferred Provider Organization plan (PPO)
Greatest freedom, highest cost; total network access and out-of-network benefit, self-refer to specialist
Creating a contribution strategy
Given that you have chose to partner with a carrier that may offer your employees the choices they need, how do you stay within your company's budget? The solution is simple - be fair and consistent by implementing a definite contribution strategy that matches your company's budget. This process may be accomplished in two easy steps.
1. Determine what dollar amount per employee your organization can afford.
2. Select a carrier that can offer you four plans that'll satisfy your employees'healthcare needs.
Here's a typical example of how a defined contributions strategy could work for you (based on a health benefits budget of $180 per employee, per month).
In the example in the chart above, your company accomplished two extremely important goals: You controlled your company's costs
and you offered your employees choices.
With a defined contributions strategy, your employees are in charge of evaluating what they want and simply how much they're prepared to pay.
A choice of plans with a definite contribution strategy is two-thirds of the employer's cost saving equation. By the addition of employee education, you can visit a change in behavior that will lead to significant savings. The more informed employees are about the true cost of health care and how their choices directly affect their pocketbook, the much more likely they're to become "partners" in controlling costs.
Most health benefit carriers provide members having an Explanation of Benefits for all claims processed, which contains the price of services. Web-based tools offer plan information and are user-friendly. At workshops and mandatory open enrollment educational meetings, employees can speak directly with a carrier representative.
As medical health insurance premiums continue to increase and more employers face very difficult decisions, offering a choice of plans can keep your employees happy and satisfy your bottom line.
Author Bio
CATHY AGUIRRE, vice president of account services for VISTA, has a lot more than 18 years of experience in managed care marketing. Aguirre provides leadership for every one of VISTA's commercial accounts, including Broward County government, The School Board of Broward County, Broward Sheriff's Office, Miami-Dade Government, Sears, Walgreen's and United Airlines. Reach her at (954) 965-3471 or cathy.aguirre@vistahealthplan.com
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