Shock and Awe

The 2005 Kaiser Family Foundation annual survey of private and public employers found that “since 2000, premiums for family coverage have increased by 73% compared to inflation growth of 14% and wage growth of 15%”. These shocking statistics confirm the quandary employers are facing between wage increases and profits versus providing quality employee health coverage

What are employers to do? Here are strategies being utilized by many businesses.

1. Tried and true: increasing deductibles, co-pays, and cost sharing with employees.
2. Wellness programs: incentives that encourage participation in healthy lifestyles.
3. Disease Management Programs: focus on common chronic diseases. The program can educate the member in self-management, advice on evidence-based medicine, and improve communication between the member, provider and payers.
4. Partial self-funding: Partially self-funded plans offer more flexible designs that give the employer greater control. Partial self-funding has mainly been available to larger employer groups but new plan designs with low maximum exposure ceilings are an option for some smaller employers.
5. Consumer driven health plans: Health Reimbursement Accounts (HRA) or Health Savings Accounts (HSA). Large deductibles coupled with savings accounts encourage price comparison shopping for medical care. Expense savings benefit the insured.

Premium rate increases are continuing into 2006. Although there is no quick fix, utilizing new strategies may impact your health benefit costs.