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Healthcare premium rates are now increasing at a faster pace than employee compensation. According to the 2015 Employer Health Benefits Survey conducted by The Henry J. Kaiser Family Foundation:
- Average annual premiums for employer-sponsored health insurance (family coverage) was up 4 percent over 2014.
- Worker contributions to family coverage increased 2.7 percent from 2014 to 2015.
- Workers’ wages increased just 1.9 percent during the same period.
Compliance costs also hamper profitability. IRS penalties for missing or late ACA paperwork are now more than $3 million for the largest companies. According to one report, 2016 will mark the costliest year yet for ACA compliance. The administrative time spent working on outdated technology will likely be a contributing factor to these costs. A recent survey sponsored by Maestro Health shows that 75 percent of brokers say ACA compliance is among their clients’ top HR/benefits priorities in the next 12 months.
The good news is that new automation-focused products and strategies have emerged to help employers cope with these administrative burdens. These include HR management (HRM), benefits administration, ACA compliance and reporting, wellness, online enrollment and private exchanges.
While it’s uncertain how much money these options can actually help employers save, related data is starting to materialize. The Deloitte Solutions 2015 Survey of U.S. Employers found that employers are optimistic about private exchanges and their potential to decrease costs and simplify benefits administration. In fact, only one in five adopters reported that a private exchange failed to reduce costs.
Clients put money where ROI is
The first generation of health and benefits technology has come and gone, but employers are still seeking cost-control solutions. Ninety-three percent of brokers say benefits restructuring is key for their clients, while 56 percent report that reducing the cost of benefits and administration is a top priority in 2016.
In short, employers are desperate for proven and quantifiable ROI from new solutions. It’s crucial in order to justify the cost and effort of adopting a new technology platform.
These signs are all pointing to the same thing for brokers – the need to partner with vendors that offer solutions that can decrease both hard and soft costs while providing quality service that meets employer and employee needs.
Hard ROI of benefits technology:
Employee health and benefits technology can reduce the hard costs by:
- Reducing the risk of overbuying or selecting the incorrect plan via decision-support tools, designed to right-size plans.
- Using automation to eliminate the need to “staff up” or outsource compliance consultants.
- Avoiding costly errors.
- Eliminating ineligibility and inappropriate billing by upgrading to systems that offer consolidated billing and reconciliation.
- Dodging high out-of-network expenses by switching to platforms that offer people-friendly enrollment tools.
Soft ROI of benefits technology:
These innovative solutions can also ease soft costs by:
- Consolidating vendors.
- Providing faster and more accurate enrollment through automation.
- Reducing employee questions with a simplified, supportive enrollment experience.
- Saving on HR productivity costs with easy and efficient processes.
- Providing relevant data insights with real-time reporting and analysis, which can drive future decisions.
When it comes to fighting rising health care costs, technology is a key player – but it’s also essential to be able to illustrate and defend the ROI of technology to clients.
For more information, download Maestro Health’s comprehensive whitepaper on the ROI of benefits technology.