Another Voice / Health insurance
Companies, workers should cooperate to lower costs
Updated: 01/07/09 6:16 AM
The Dec. 28 Buffalo News article on the sticker shock felt by many Western New Yorkers enrolling in health insurance plans for 2009 brought to light the opportunity for many businesses to use proven methods to manage escalating costs.
According to a study from the Robert Wood Johnson Foundation, health insurance premiums are increasing at a rate that is at least 10 times that of the average American income, and employer health insurance premiums are increasing at twice the inflation rate.
Because such increases are having a decidedly negative effect on the bottom lines of employers, who are absorbing a sizable portion of the increased premiums, methods of reducing the costs of health care plans are imperative to ensure the continued financial health of Western New York’s businesses.
The solution to managing skyrocketing costs and still provide employees with access to benefits appears to be a cooperative effort between employers and their employees that best combines the use of technology, consumerism and employee education. In doing so, many businesses can realize a savings of up to 10 percent on their health insurance premiums.
Through the use of technology, employees can use a benefits management system to enroll, re-enroll, manage changes to their plans and access provider directories and document libraries. This has the potential to significantly lower the administrative costs of employee health care plans.
Another major cost savings from technology is the timely elimination of coverage for terminated employees and non-eligible dependents, two areas where inefficiency adds up, and proper application of plan rules.
An effective employer purchasing and offering strategy can also provide significant savings. Having credentialed professionals to negotiate plan design and costs with insurance providers will mitigate health care costs trends. Many employees are open to cost management strategies such as higher deductibles, co-pays, required preventative care and the use of creative financing techniques including Flexible Spending Accounts (FSA), Health Reimbursement Accounts (HRA), and Health Savings Accounts (HSA).
One effective tool, a single stored-value debit card, can place FSAs or HRAs in the hands of employees, allowing them to become more educated consumers.
In addition, employers who regularly include wellness and health education programs eventually realize substantial savings in the form of reduced absenteeism, lower turnover, increased morale and productivity and the potential to negotiate lower health insurance rates because of fewer claims.
Employers who work together with their employees and professional strategic partners on long-term solutions are better prepared to weather what promises to be a rough ride.
Daniel E. Cantara III is Western New York regional president for First Niagara Bank.
