For many employees, the pandemic has made clear the importance of health insurance. But employers face challenges with their plans, including rising costs.
“It’s gotten to a point where CFOs and CFOs of any business of any size need to pay attention to total healthcare expenses, which can be among the biggest costs for businesses,” says Vince Giacalone, vice -Regional President, Central Ohio, in Gallagher. “So they are looking for strategies to control it now and in the years to come in order to get out of what is currently a reactionary position.”
Additionally, the struggle to find a workforce, even with the recruiting opportunities that remote working presents, has made a strong benefits program. Too often, however, there is a value disconnect between the hard money and the soft money that is spent on Medicare. It is therefore difficult for companies to show the value of the plan to the end user.
Smart business spoke with Giacalone about the challenges businesses face with their health insurance plans and strategies to proactively address them.
What effect has the pandemic had on employers’ health care benefits?
Insurers are still trying to grasp all the long-term repercussions of this pandemic. This led to a wait-and-see approach during the final season of renewal. Many carriers, both in a fully insured atmosphere and with a stop-loss self-insurance perspective, have made numerous rate crossings this year to save time and gain more certainty.
And while that is happening, employers have tended to scrutinize their health care plans, one of their biggest expenses, to try to get immediate control and save money. They also looked at the big picture and began to wonder if they were ready for the next event. This has caused many employers to turn in on themselves and evaluate their partners, especially when it comes to their health insurance program. This is important in part because the health and wellness benefits are used from a recruitment and retention perspective. With many employers struggling to fill vacancies, there is a need to offer a solid and profitable plan to recruit employees. It also created an opportunity to align material and indirect savings with employee recruitment and retention.
How has remote working affected health care coverage?
When companies hire out-of-state employees, employers should consider that employee’s proximity to the network and hospital system to determine if they are aligned on a plan that has parity across the board. United States. Each state may have its own set of rules and regulations regarding medicare and health care. And so it is essential to understand the ERISA laws of each state to avoid not complying with the Ministry of Labor.
But employers should also consider the opportunity. The benefit plan can be a way to connect remote employees to the culture of the company. If done correctly, it can create a unified message on employee health and wellness.
Why is benchmarking and financial modeling important now?
Business health plan brokers and associated strategic partners should have updated them during the pandemic on how to respond to leave and workforce changes as they occur. As companies experienced changes in their workforce, the opportunity that presented itself of the challenge was to find a way to replenish the healthcare plan as the company was rebuilding itself. This is where the importance of benchmarking and modeling against the competitive landscape of the industry comes in.
It is also an opportunity to explore a company’s financial financing model to see if it is a better opportunity for the company and its specific risk profile to self-insure health insurance. or become fully insured and transfer all risk to an insurer. A self-funded feasibility study can further explore this specific risk by evaluating a company’s data and then preparing a guided assessment that helps the company make a decision.
Companies must seize the opportunity to introduce cost control into their health plan and put in place strategies that affect the entire organization for the years to come. There is now a chance to stop reacting and become rather proactive.
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