The cost of providing health care to employees and their families continues to rise. In 2024, predictions for health care cost inflation are around 5% and 8%. A recent Mercer study revealed that large employers largely avoided shifting additional costs to employees through higher deductibles, copays or out-of-pocket maximums in 2023. So, what other levers do HR leaders, under constant pressure to do more with less, have to pull to help manage health care costs that are rising faster than employee wages?
Benefits administration partners can enable the delivery of solutions to employees that positively impact health care expenses. Evolving beyond enrollment, benefits administration providers have invested in solutions that drive engagement in tools that optimize usage of benefit programs throughout the year. By leveraging scalable data models, advanced levels of system interoperability and emerging technologies, vendors can provide users with highly personalized, engaging experiences that drive meaningfully improved health and financial outcomes.
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There are four ways that leading benefits administration firms can unlock strategies that can help lower health care cost trends and improve outcomes for employees and their families.
- Increasing engagement in programs that improve care and lower costs
Employers are investing in a wide array of care solutions that address specific health conditions and needs, from diabetes to musculoskeletal conditions to mental health. These programs have the ability to improve care while lowering costs and improving patient outcomes. However, to engage the right person with the right solution at the right time means that you need the right communications strategy. Many times, these effective programs are lost in the sea of benefits available to employees, limiting the program's ability to impact all who could benefit from the solution.
Leading benefits administration partners have invested in care panels and a holistic communications approach that personalizes delivery of these solutions when it is most relevant to an employee, driving significantly greater adoption and utilization.
- Improving enrollment through decision support engines
While decision support engines have been around for a decade, many still don't assist employees across all benefit decisions. For example, how do we help employees make a complete health care enrollment including health plan selection, HSA or FSA contribution, and supplemental health? How do I determine whether I should enroll myself and dependents on my plan? Should I consider choosing my spouse or domestic partner's plan? What if I can't afford to say yes to all of the suggested decisions? Making the most of each benefits dollar, whether it's spent or saved, is the essence of health care cost management.
Leading benefits administration vendors continue to innovate in the area of decision support. For example, we've found from our own decision support tool at Benefitfocus that employees are able to optimize their enrollment and savings decisions with personalized, data-driven benefits. We saw nearly 50% engagement with the tool in the first open enrollment season, with 26% higher high deductible health plan enrollments.
The most sophisticated tools allow employees to include their claims history to help drive them to the best available options, can consider trade-offs to help an employee optimize their deductions within a budget, and continuously improve the enrollment experience to drive greater trust in the quality of the guidance. There is still a lot of opportunity to help employees consider a total enrollment approach, including retirement savings contributions, for lower costs and improved outcomes.
- Integrating health care navigation tools into the employee experience
Life happens. Having the right health plan matters just as much as selecting the right care provider for your needs. Whether it's a referral from a primary care physician, a friend's recommendation, or a quick web search, employees tend to select a doctor based on convenience.
Garner Health research shows us that the biggest driver of health care costs and outcomes is which doctor a patient sees. Leading benefits administration platforms integrate care navigation with quality and performance metrics directly into the employee experience to help find the highest quality providers at lower costs. Leading benefits administration platforms integrate care navigation with quality and performance metrics directly into the employee experience to help find the highest quality providers at lower costs.
- Providing health analytics platforms to help identify savings opportunities
Related: The prescription for tackling soaring employer-sponsored health care costs
Employers have unprecedented opportunities to use data in smart ways to drive cost savings for their employees. Leading benefits administration vendors provide fully integrated health analytics and insights that analyze holistic employee health care data from inputs like:
- Claims audit and recovery services that identify and retrieve claim overpayments potentially stemming from coding errors and even fraud, reducing overall health care spend,
- Personalized claim history that provides benefits enrollment guidance for employees to select the right benefits, and
- Employee population insights that help employers gauge trends, understand benefits utilization and modify program design.
Employers who partner with a benefits administration vendor that is strategically prioritizing these four avenues to manage rising health care costs will win at improving outcomes for employees and their families while creating a more holistic and integrated experience.
Andrew Frend, President, Benefitfocus, a Voya company.
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