The “Cost” of Benefits Packages for Today, Tomorrow & the Future

group health insurance

As employers have valuated the costs of their benefit plans in 2020, they have observed that in many categories, the claims plummeted. Because of the pandemic lock downs, dental visits dropped by 60-70%. Elective procedure claims were down by 75%, and preventive care claims were down by 60-70%. Meanwhile, the two categories that saw dramatic increases in claims were Telehealth, up by 87%, and mental health claims were up by 63%. (Source: LL Global Inc. 2021)

Now in 2021, employers expect to see increases in categories that were down during the pandemic as employees catch up with dental visits, elective procedures, primary care, vision care and even emergency visits.

How to Manage Benefits Costs

Because benefits represent a large percentage of payroll costs, benefits managers need to prioritize performing a cost-benefit analysis, as various levels of expense associated with different types of benefits are rapidly changing. Some benefits can be very expensive to offer, while others can carry little to no cost yet still provide great value to employees. Employers and plan sponsors should weigh these costs alongside employee preferences and consider what utilization rates and perceived value are likely to be.

Communicating effectively with employees frequently can actually help manage benefits costs. By conducting surveys to determine employee preferences for benefits, new ones can be added, and less utilized ones can have limits lowered. Now as we enter the “post pandemic” era, one of the best approaches employers can take is to regularly connect with their employees about benefits.

In general, carriers and employers cannot communicate with workers often enough; they should do so throughout the year and not wait to rely on communicating once per year during the policy renewal period. Frequent communication, using short, simple, and visual pieces— and through multiple delivery channels — can convey clear messages. With many workplaces having up to five generations in their workforce, using multiple communications tools and strategies is vital. Some ideas for communication include: virtual meetings or enrolment fairs, access to call centres via phone or chat, gamified decision support tools, text messages, and social media outreach. The key is to be wherever workers are to ensure they keep benefits top of mind throughout the year.

Healthy Employees

Why communicate frequently? Because employers should want their employees to access the benefits they need in order to reduce absenteeism and presenteeism.  Healthy employees are not only happier and more productive, but they also cost the company less than employees who do not take care of their health.

Evaluating the costs of benefits plans to the company needs to include accurately measuring employee productivity, absenteeism, presenteeism, turnover, and financial distress levels.

Steps to Reducing Benefits Costs

The steps necessary to reducing benefits costs are:

  1. Perform a cost-benefits analysis
  2. Survey & obtain input and feedback from employees about benefits preferences
  3. Communicate to employees about benefits frequently using multiple channels

At Health Risk Services, we work with employee benefits managers to help them revise and shape benefits plans on an ongoing basis to ensure the needs of their employees are being met within the company’s values and budget. We know how to find the best possible solution for both the employees and the employer in crafting benefit plans. We would like you to know more about how Health Risk Services can assist you with a 2021 plan to provide more customized employee plans, so please schedule a Complimentary Consultation with us.

At Health Risk Services we will Empathize, Educate, and Empower you and your team in 2021! 

To schedule your Complimentary Consultation with Health Risk Services, please call 403-236-9430 OR email: [email protected]