You would think most employers base their benefits decisions on quality of care, but recent research by HealthEquity says nearly a quarter base it on budget.
And costs continue to rise. In 2019, the average family healthcare premium was $20,500 – an increase of more than 50% in 10 years. Problem is, benefits are a critical factor for talent acquisition and retention:
- more than 50% of employees say they’re the biggest factor in job satisfaction, and
- 78% say benefits influence their productivity.
Strategies for cost reduction
With COVID-19 escalating healthcare claims, costs aren’t going to decrease soon. To save money in 2021:
- Add a flexible spending account – An FSA provides employers and employees with tax savings. Some employees avoid them because of the use-it-or-lose-it issue. But you can add a carryover option allowing them to roll over up to $500 into next year’s plan.
- Offer health savings account –Why? Because HSA-qualified health plan premiums are cheaper than other plans. On average, they cost 13% less than traditional PPOs and increase about 2% as opposed to 6%.
- Switch to active open enrollment – To do this you have to make employee education a top priority and provide them with tools that help them navigate their benefit options. Active open enrollment helps with HSA adoption, and the more employees who choose HSA-qualified health plans, the more you can suppress overall healthcare costs.
- Offer contribution matching – Employer contribution matching is a big influencer on employee participation. With an HSA match, you can make them a percentage or dollar-for-dollar match. The more employees contribute the better off their long-term financial wellbeing will be, and it benefits employers’ bottom line, too.
Click here to download a free copy of Six Strategies to drive down benefits costs in 2021.