3 Ways to Improve Transparency of Health and Welfare Benefits
Posted in: Employee Benefits
As an organization, you have most likely wondered if you’re paying too much for your health and welfare benefits. Transparency creates a clearer picture of cost and ultimately helps the decision-maker involved make better decisions, whether that is an employer deciding on health and welfare plan options to offer or an employee deciding on which healthcare provider to select. Implementing one or more of the actions below will improve the transparency of health and welfare related costs for you and your employees.
- Conduct online procurement process to ensure the right contract, services and price. Utilized for Life, Disability, Stop Loss, Pharmacy and Dental, this online process is designed to accommodate RFPs for mid to large market employers, regardless of complexity. Every online Request for Proposal (RFP) is a customized, detailed sourcing project that outlines your exact plan design and account services desired. Carriers are invited to compete for your business in an open and transparent way. The online process allows you the employer to see which insurance carriers are being invited to participate in the process, which have responded to your RFP and which have met the technical contract requirements. In the next step the online inverse auction process allows you to see the market driving the price down as the carriers adjust their pricing to compete for the business, therefore achieving the lowest possible market pricing. The RFP result is fully transparent while making certain the right contract and services are in place at the most competitive market price for your organization. We have seen savings up to 30% or $2.5 million per year for our clients.
- Provide a consumer driven health plan such as a Qualified Health Deductible Health Plan alongside a Health Savings Account (HSA). While conducting an online procurement process opens transparency to the employer, consumer driven health plans open transparency for the employees because they become responsible for actually paying claims. This engagement motivates employees to consider the best option for their health needs. By offering a qualified high deductible health plan alongside a health savings account, employees become more engaged and selective in managing the cost of their healthcare because they share in the expenses incurred for care.
- Switch to a defined contribution model for health and welfare benefits. Under most group plans 80% of participants are over insured. With a defined contribution plan you as the employer set a budget with which employees can purchase benefits that makes most sense for them. Employees shop online for their benefits through a private exchange or marketplace that typically have several plan options. They will be able to see the total cost of healthcare premium for each plan and to make the most of their allotted money will want to choose the right amount of insurance for themselves or their family. Online tools perform needs assessment and filter through the results to help employees make that decision. Employees get more choices and gain a better understanding of health plan cost while you the employer are in a better position to curb the increase of your benefit spend.
If your organization has any questions about one or more of these ways to becoming more transparent with your health and welfare benefits, please contact me at mcoan@psafinancial.com.
