Most employers nod their heads in agreement with their trustedconsultant, but are they up to speed with the strategies beingpresented? (Image: Shutterstock)

The employee benefits landscape is getting noisy.

The headlines are everywhere about American health care costsskyrocketing. According to SHRM, the cost of employer-sponsored healthcare benefits is expected to average approximately $15,000 peremployee in 2019.

The American enterprise wants to return it's attention toincreasing market share, building profitability and retainingdestination employer status. With the rising cost of executing aneffective total rewards program and benefits consisting of 30 percent of the average totalcompensation budget, companies are focusing on internalexpenditures now more than ever.

This has led to multiple explanations and possible solutionsfrom every direction imaginable. The current administration'spoliticization of health care is center-stage, but revolution isalso coming from the market.

The $69 billion Aetna-CVS merger has resulted in ambitiousplans to bolster CVS' primary health “Minute Clinic” to helppatients focus on managing common chronic conditions and accessingprimary care outside of the facility setting.

Aon's plan to purchase rival broker Willis Towers Watson wentpublic but was quickly dismissed as market speculation. That couldhave had a tremendous impact on the way companies are deliveredoutside consultation for their benefits operations.

Benefits professionals everywhere are joining the health careconversation with provocative new tactics and promises ofbreakthrough savings. Most employers nod their heads in agreementwith their trusted consultant, but are they up to speed with thestrategies being presented?

I've created a concise list of benefits strategies that aregaining popularity and improving the performance of company benefitplans…and budgets.

Reference-based pricing (RBP)

This health insurance technique is for firms that are typicallyof a size that could sustain a self-funded plan. It involvesunseating the traditional insurance carrier or provider network andnegotiating covered services for a plan directly with the healthsystem. Companies set an indexed limit on the amount a RBP planwill pay for certain health care services.

These plans are attractive to employers because it eliminatesthe costly fees associated with gaining access to an insurer'sprovider network and the administrative fees associated with themajor carriers.

Without the correct execution an RBP plan can put employeefinancial stability at risk as a result of balance billing. Thereare now several vendors on the market that specialize in supportingRBP plans by assuming fiduciary responsibility away from theemployer and negotiating balance bills on behalf ofparticipants.

Value-based care

Currently, the American health care compensation model is basedlargely on volume of service or fee for service. This has createdthe unintended consequence of encouraging providers to treat asmany patients as possible rather than placing a priority on the health outcomes of theirpatients.

Value-based care has emerged as an alternative and potentialreplacement for fee-for-service reimbursement based on quality ofhealth outcomes rather than quantity of services provided. This iscurrently being discussed in Congress as theyhave made strides towards regulating the path towards VBC.

Negotiating a value based care contract with a health system canbe complex and involve council, HR and an experienced healthinsurance consultant to effectively pilot in the best interest of acompany's employees.

Direct primary care

Direct primary care is when a patient eliminates the co-payinsurance model and a relationship is formed with a provider(s) asa means for patients to save money on their primary care services.This can also include other clinical services such as laboratorytesting, wellness screenings and consultation.

Several vendors in the market have emerged with compellingarrangements such as monthly subscriptions in exchange forunlimited access to care, reduced wait times and comprehensivephysical exams.

This model of care of could have excellent results on the healthof an employee population with a laser focus on preventative careand avoidance of preventable conditions. A disadvantage is thatthis kind of arrangement typically does not involve coordination ofspecialty care, hospital care or prescriptions.

Honorable mentions

Employee wellness: There are several strategiesinvolved in promoting Wellness in the workplace which involvesactively promoting employee health, disease prevention and healthylifestyle. An effective employee wellness program has been shown toincrease employee engagement, morale and reduce preventable claims.A solid Wellness program is especially important in a self-fundedenvironment where employee claims directly impact an employer'sbottom line.

Student loan repayment program: With studentloan debt breaching the $1T mark in the United States, employersare beginning to see financial wellness and support as critical tomaintaining a productive and focused work force. A student loanrepayment program works similarly to a 401(k) where an employersponsors a plan to assist employees with the repayment of theirstudent loans. This is currently being discussing in Washington forpossible legislative support.

The universe of employee benefits can be a daunting space fullof regulation, conflicting strategy and potential pitfalls. Inorder to accomplish the goals of your benefits program it'sessential to partner with a consultant you can trust.

Jonathan Mentor is a benefits accountexecutive for Foa& Son Corporation, as well as a volunteer memberof the communications committee for the Insurance Brokers Associationof New York.

Read more: 

• 5 benefit trends to watch in 2019
• Value-based insurance design: the latestbright-and-shiny
• 5 technology and data trends affecting employeebenefits