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With an unpredictable labor market and even tighter budgets, it's more important than ever to protect the cost and quality of employee benefit plans to attract and retain employees.
For non-profit organizations, the dynamics are demanding when you consider the board of directors, donors, the mission, and often government oversight.
Non-profit HR teams can do this, but it must be done with precision of a surgeon because they're usually understaffed, overworked, and juggling competing priorities.
Here are three ideas about what to tell the non-profit HR teams.
1. Look at all things pharmacy.
With 70% of employers anticipating pharmacy cost increases in the coming year, it's no surprise that pharmacy remains the fastest growing health care expense and a major profit center for many carriers.
To help manage these rising costs, employers can take several proactive steps.
Ongoing employee education is critical; monthly sessions can help employees better understand their benefits and make smarter choices, such as using coupon programs, cost-transparency tools, and generic alternatives.
Employers may also see savings by narrowing pharmacy networks, as limiting options to a single network can reduce overall spend.
For larger organizations, carving out pharmacy benefits can be an effective strategy, provided PBM contracts are carefully evaluated and compared on an apples-to-apples basis.
Another meaningful opportunity lies in limiting first-time prescription fills, a 90-day supply that proves ineffective results in unnecessary waste and cost.
Finally, implementing strong clinical programs, such as prior authorization, step therapy, diabetes management and coupon assistance, can significantly control spending, though success often depends on brokers actively advocating for these solutions on the employer's behalf.
2. Consider self-funding or level funding.
Even for smaller employers, these funding models can provide much needed data on claim drivers and extra fees that carriers charge to ensure profitability.
To curb costs, employers should look at a consortium, captive arrangements and level-funded plans, while relying on their broker to make strategic recommendations.
3. Think about wellness as stewardship for employees.
For employers looking to maximize investment in employees, there's often much more return on investment if employees receive medical care for a condition than join a wellness challenge.
Nonprofit organizations are mission driven.
Stewardship of employee health is no different and should be approached strategically, balancing the need to manage costs while advocating for access to the highest quality care to improve the overall health of employee populations.
Kate Hubben is a vice president at NFP.
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