Health care costs are a growing concern amongst small and large
business owners throughout America. The cost of medicine in the
United States is out of control, with the average CT Scan or MRI
costing thousands of dollars. Simple and complex treatments,
office visits, and procedures are costing employers millions of
dollars while decreasing the profitability of their
organizations. Because of the rising health care costs, employers
are forced to reduce bonuses, reduce spending, and sometimes
layoff employees, which increases stress.
Employers can manage health care costs in a society that is
preparing for major health care renovation by monitoring the
eligibility of spouses and dependents, investigating and
reporting all claims, switching to different policies,
encouraging spousal health insurance, reducing workers
compensation payouts, and developing a legal team to handle
litigation and settlement issues.
Utilizing competitive business strategies that monitor expenses
closely can control health insurance costs. In 2007 the average
employer paid $12,106 in health care costs, with the employee
picking up $3,281 of the bill. Health care costs continue to
rise, causing employers financial distress.
Conduct Family Eligibility Audits
An employee's family is one of the largest health care expenses
businesses deal with, as children and spouses become ill over the
course of their policy. It is commonplace for businesses to spend
millions on an employee's dependent or spouse. Companies can
reduce the amount of money spent on spouses and dependents by
actively investigating all non-employee claims.
In most policies a dependent is defined as someone under 18 or
who is a full time student below a certain age. The new Obamacare
insurance reform requires employers to pay for dependents under
26; however, many current policies set the age at 23 or 24.
Employers can minimize health care costs by ensuring any person
over 18 is a full time non-exempt student. Employers can
encourage employees to set their dependents up with
school-sponsored insurance, which reduces the employers overall
cost. Additionally, employers can alter the policies to remove
unrestrictive verbiage from the documents, such as policies that
do not require older dependents to be in school. Verification of
a dependent's status can be obtained from leading national
clearinghouses and verification services at a fraction of the
price of their health plan.
There are other health insurance loopholes employers can
leverage, such as retiree benefits for dependents as well as
dental and vision services. Limit the scope of retiree health
plans by removing dependent coverage, only providing medical
services to the employee's spouse. Additionally, consider
modifying vision and dental coverage for dependents by limiting
it to essential and preventative services.
Deductibles and Out of Pocket Expenses
Employers can significantly reduce the amount of money they spend
on an employee's health insurance plan by utilizing plans with
high deductibles, which ensure that their workers are protected
in case of major illness or injury. Additionally, deductibles
place most of the annual expenses on the employee, with the
employer serving as backup in case of life threatening illness,
expensive operations, and other expensive procedures, such as CT
Scans or MRIs.
High deductible plans are ideal for small and large businesses
that want to minimize health care costs and risks associated with
high premium traditional plans. Employees are made aware of their
high deductibles and take a proactive approach to their health,
avoiding expensive hospitalizations for otherwise preventable
diseases, such as diabetes.
When employees are aware of the true cost of health care, their
overall demeanor towards a healthy lifestyle improves. They also
are more appreciative of the services and benefits their current
employer offers.
Minimize Health Care Costs by Splitting or Switching Plans
Encourage employees to utilize their spouse's employer paid
health insurance package if it is available. The strategy can be
marketed as providing them with the maximum coverage, pointing
out how their spouses program is a viable alternative. Educate
employees on the open enrollment procedure, fostering
communication within their family regarding the topic.
Employees can save up to $5,000 by switching to their spouse's
insurance, especially if said employee was on a high deductible
policy. Another option is to encourage employees to split their
dependent's coverage amongst both of the health plans,
minimizing financial risk to your business.
It is illegal to demand that employees switch to their spouse's
plan or remove dependents from their policy. Incentive programs
are unethical but may drive lower health care costs in your
organization. Use this method as a last resort, as some employees
may take action against the company. Insurance commissioners
frown upon the incentive or spousal switching program, thus it is
best to encourage the splitting of spouse and employee coverage.
Start a Healthy Living Program
The fastest and most efficient way to decrease health care costs
is by encouraging your employees and management staff to live a
healthy and preventative lifestyle. Preventative care costs far
less than other medical procedures, which reduces the out of
pocket expenses for both the business and employee. Offer awards
or incentive programs for employees who quit smoking, lose
weight, stop drinking, or take a proactive approach to their
health.
Be careful when publicly honoring the employee in front of their
coworkers, as some may be nervous or reserved, these are
sensitive topics after all. Healthy living programs foster a
wholesome lifestyle, in which the employee receives routine
checkups and works to reduce preventable conditions, such as
obesity and high cholesterol. Healthy lifestyle programs can
target diet, weight loss, smoking, alcoholism, aging, and stress.
Additionally, healthy employees can participate by continuing to
exercise on a routine basis and reducing their stress levels.
Thayne Carper spent 4 years of college competing in student
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