As was the case for most of the last couple decades, the cost of health care continued to climb in 2018. This past year, the average employer-sponsored family plan, according to the Kaiser Family Foundation, approached $20,000, and there's yet another five percent increase expected for 2019.

But the promise of a new year, a fresh start, brings hope. And for employers and HR professionals, the good news is that instead of falling victim to insurer's annually increasing premium rates, they can take this time to identify cost savings in their current health plans. As they look to enact change in the new year, here are five things for employers and HR professionals to consider:

1. You're actually running a health care business.

For most employers, health care is the largest expense after payroll. The vast majority of non-elderly and low-income Americans are on employer-sponsored plans, which means employers play a significant part in shaping our health care system. Employers must take ownership of this responsibility and seriously consider the financial and societal impact of high-cost, low-quality health plans that have created a 20-year-long economic depression for the working and middle class. Fortunately, wise employers have realized that the best way to slash health care costs is to improve benefits.

2. Get to know your employee population better.

Most fully insured plans don't take into consideration unique employee needs. Because of this, employers could be paying for pointless benefits. Rather than pay more for subpar benefits, employers can pay less and give their employees better benefits with a higher coverage value. Younger employees may want family planning services while older employees may want assistance caring for an elderly parent. Through surveys and focus groups, employers can easily gain insight into their employees' needs.

3. Choose a benefits advisor that has your best interest in mind.

Did you know that most benefits brokers make more money the worse job they do? That is, their commissions grow as your health care costs skyrocket. Many benefits brokers receive large bonuses for keeping employers on certain plans even if they aren't the right fit. And each year, with health premiums continuing to climb, health plan commissions likewise increase by 10 to 15 percent.

In addition to doing their own research, employers should seek out highly aligned advisors who will disclose their commissions, bonuses and compensation, and who are proactive about meeting early and often so that employers have time to explore multiple insurance options. The best benefits advisors are able to drop health benefit costs by 20 percent or more not by cost-shifting to employees but by ensuring employees only receive care from the highest value healthcare provider organizations.

4. Your wellness program isn't worth it.

Though they're all the rage, so-called “wellness” programs produce little to no ROI and can be expensive add-ons, costing $100-$150 per employee per month, plus hundreds more if employers offer financial incentives for participation. Of course, these optional expenses are in addition to health insurance costs. By switching to a value-based care model, employers can not only save money, they can have healthier employees with fewer medical expenses. Compared to “wellness” programs, true well-being is impacted much more when proper primary care is in place— i.e., primary care that isn't driven by maximizing volume for a health system.”

5. Effective communication to employees.

No matter how much work an employer puts into developing the perfect plan, it will fail if employees are not made aware of its details. Employers must be sure to clearly communicate with employees how to best take advantage of the new plan, which will prevent them from making frantic calls to HR about not being covered or feeling forced to see providers they are not familiar with. Most employees don't recognize that the only thing that changes is who processes the claim and cuts the check. It's still the employer who is paying the bill and the same doctors who are providing care and guidance. This allays many concerns once people understand this.

With these insights in mind, employers can make well-informed decisions that set the stage for savings, and an improved employee experience, for 2019 and beyond.

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Dave Chase is co-founder of Health Rosetta, which accelerates adoption of simple, practical, non-partisan fixes to our health care system.

Instant Insights /

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