Many small to mid-size companies rely on their benefits plan to help them attract and keep good employees.
Yet, often employers struggle to pay the increased costs of their plans in a low-growth economy.
Sometimes, we’ve found that just a few simple changes can provide a small to midsize company the ability to compete effectively for good employees, while providing them with coverage that is effective.
And it doesn’t have to cost a lot.
Managing costs is important because health plan inflationary trends are about 9 to 11% -- well above regular inflation. Some of the highest cost inflation comes in specialty drugs used to treat very serious illnesses, such as HIV, Hepatitis C, and cancer.
A cost-effective, well-managed benefits plan is possible for virtually any size of company.
Two of the keys to success for developing plans that work for both employees and employers are:
Consumerism – This means harnessing the employee’s sense of financial self-interest in saving money. Health care is a unique industry where the consumer is usually not the one paying for the products or services procured. As a result, many employees feel detached from their benefits plan – they think of it as free money, and they are willing to spend as much as they can. The plan needs to be designed in a way that they feel a commitment to managing costs.
Sharing costs – One of the most powerful engines for building consumerism into your benefits plan is in having the employee shoulder some of the cost. Employees see real money coming out of their bank account or credit card, which will be the lever that helps the company manage the overall costs of the plan. Companies often believe that sharing premiums is an optimal way to leverage consumerism.
The result of a well-designed benefits plan is that your company is seen as a good employer that looks after its employees, particularly when life’s harshest surprises arrive, perhaps in the form of medical costs that would destroy them financially.