I have been in this business a long time—more than a few years. And since Day 1, benefits cost management has been the No. 1 issue facing benefits plan sponsors. I am tired of the conversation in large part because benefits plan sponsors have done relatively little to manage their benefits plan costs over the years. In absolute terms, benefits plan costs represent a relatively small percentage of an organization’s total compensation spend. And, bottom line, I don’t think benefits cost management is the right conversation.
The choice of whether to select an insured group benefits plan versus going the self-insured route depends on a number of variables. Often price plays a role. The challenge is, how do you compare two service models that are on the surface somewhat similar and yet completely different in design?
Preventing disease will lead to higher productivity, lower benefit costs, happier employees and a better bottom line, according to Thorpe Benefits.
In a world where just about everything is becoming customizable, it’s no surprise that many plan sponsors want to offer flexible benefits that can be to tailored to meet their employees’ unique personal needs. Flexible benefits can mean different things to different people, so for the purpose of this discussion, let’s define flexible benefits as a program which at a minimum includes the ability to choose from two or more health and dental options.
Employers look to their employee benefits plans as a means to many ends—to attract and retain quality people, ensure that their valued employees and their families are looked after in case of a catastrophic medical event, and as an integral piece of their overall compensation strategy. However, the structure and content of a benefits plan can also be designed to reflect an organization’s corporate culture.
The end of November marks 10 years of existence for Cubic Health. While the pace of change in the employee benefits industry is greater today than a decade ago, even more interesting are the evolving partnership opportunities for plan sponsors to result in greater value for the money invested into their benefit plans. It’s the opportunity to reduce existing inefficiencies that will allow for recurring reinvestment into areas that will drive greater returns for a given plan and its members.
I have been asked by several people for my views on the benefits of the future. In this article, I suggest that the benefits currently being sold within the voluntary benefits market are not necessarily the ones that employees want. Benefits such as critical illness and AD&D have their place in a more consumer-driven marketplace. However I do not see the market for these benefits to be as robust as it is in the United States.
Four short-term strategies to save on benefits plan costs
Encouraging employees to live a healthier lifestyle eventually gives way to the notion that for some, the need for prescription drugs may be largely unavoidable. Plan sponsors must involve all members in an open dialogue which promotes the fact that plan cost containment starts with them. Given that the workforce is aging and utilization rates are rising, plan sustainability depends on the realization that much of the power depends on the purchasing choices of each employee and their extended family members
I recently presented at an employee benefits conference in the United States. As you would expect, much of the discussion was focused on Obamacare, however, there was a considerable amount of attention on worksite marketing and voluntary benefits.