New year, new benefits strategy

The bad news —  employers bear the brunt of excessive healthcare spending, with 50% of Americans getting health insurance through their jobs.

The good news — this gives employers the unique opportunity to play an instrumental role in solving the value crisis in U.S. healthcare. 

This monthly newsletter is designed to educate, inspire, and empower employers who want to reject the status quo by seeking and building better health plans.

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It's getting tougher to afford healthcare, even with employer-sponsored insurance

29% of Americans with employer-sponsored health insurance are “underinsured” — meaning that their out-of-pocket costs for healthcare in the past year were at least 10% of their household income, or that their health plan’s deductible was at least 5% of their household income. This leads to many people — disproportionately women — with employer-sponsored health coverage skipping medical care when they need it most due to costs. 

Employer tip: The ever-rising cost of healthcare services is the major reason healthcare is increasingly difficult to afford. That is why it is important to choose a health plan that uses reference-based pricing (RBP), a model that prices medical services based off of a benchmark rather than an arbitrary “discount” off of billed charges. RBP helps contain the costs of services and makes them predictable for the health plan and its members. 

Winning the 2023 talent wars will take a shift in benefits design and management

In order to attract and retain talent in a competitive environment, employers are moving away from “cookie-cutter” benefits packages in favor of more individualized benefits that meet employees where they are. For instance, financial planning services are a must-have benefit for younger employees, but less so for older ones. And the ability to work remotely is non-negotiable for some, while others want the option of returning to the office. Employers must remain flexible enough to meet their employees’ diverse needs.

Employer tip: Self-funded health insurance plans can save employers money compared to fully-funded plans — 10% to 25% on non-claims expenses, according to this article. Consider choosing a level-funded plan, which offers much of the savings of self-funding without any of the risk. Doing so could free up the funds to add more individualized benefits that matter to your employees. 

With healthcare costs rising fast, it’s time to rein in chronic disease expenses

According to the CDC, 60% of U.S. adults have a chronic disease, and chronic conditions account for 90% of the nation’s $4.1 trillion in annual healthcare costs. Employers doubly bear the high cost of chronic disease — both via the expense of employer-sponsored health insurance and the cost of employee absenteeism. That’s why it is in employers’ best interest to reduce chronic disease within their employee populations by implementing long-term preventive health strategies. 

Employer tip: If you are on a self-funded or level-funded health plan, encouraging employees to take charge of their health can have a significant effect on your bottom line. By offering employees affordable and convenient access to primary care, virtual care, health coaching, mental healthcare, and chronic condition management, you can prevent high-cost episodes of care, thus reducing the cost of employee health claims over time.

OUTRAGEOUS HEALTHCARE PRICING

On average, employers and private insurers pay hospitals 224% of what Medicare would have paid for the same inpatient and outpatient services. 

According to the Kaiser Family Foundation, “private insurers’ payment rates are typically determined through negotiations with providers, and so vary depending on market conditions, such as the bargaining power of individual providers relative to insurers in a community” — which explains how payment rates can balloon to over 300% of Medicare prices at the top end.

This is where reference-based pricing comes into play. The model often uses Medicare’s reimbursement rates as its benchmark — promising to pay providers a predetermined, reasonable percentage above them — to keep rates from ballooning out of control.

LISTEN

Employee Recognition with Debra Corey

In this episode of The How of Business podcast, Debra Corey — longtime HR leader and author of several books on employee recognition for small business, including Appreciate it! The Playbook for Employee Recognition — discusses the “4 Golden Rules of Employee Recognition.” Recognition must be:

• Meaningful — both the reward and the messaging that accompanies it
• Unified and inclusive — giving all employees an opportunity to be recognized
• Shared — so that all employees can celebrate and be inspired by the person being recognized
• Timely — in other words, celebrating small wins as soon as they happen

By following these rules, small business leaders can build an employee recognition program that boosts employee retention and fosters a strong company culture. 

ATTEND

Hottest Trends in Benefits

This free virtual event, taking place on January 25, will help employers rethink their benefits offerings to reflect the latest trends and meet employees’ expectations in 2023. Sessions include “Benefits & Wellbeing for Everyone: The DEI Connection” and “2023 Perks Resolutions — Attract and Retain Talent with Personalized Perks & Stipends.”

SANA SPOTLIGHT

Calling all HR teams of one!

Whether you’re a seasoned human resources professional or a business owner handling HR responsibilities, managing all of HR on your own is no joke. 

At Sana, we strive to make one aspect of your job — managing employee health benefits — easier. 

On Thursday, February 16 at 2 PM CT we are hosting a 30-minute webinar discussing all the ways Sana simplifies health benefits for HR teams of one. You’ll also hear from our partner, Mineral, about their HR and compliance resources and services included in Sana health plans at no additional cost.

Register here!