Companies Find Innovative Ways to Lower Employee Health Insurance Costs

As part of their annual survey on employee health insurance costs, Towers Perrin divided respondents into three groups based on relative health insurance costs and cost increases, including purchasing efficiencies and managing employee health risks.  The best companies, classified as “high-performing” companies, are most successful at these tasks and thus have the smallest annual increases (about 4%) in their annual employee health insurance premiums.

How do they do it?  By using a variety of tactics to encourage employees to participate in the process, from helping to choose the medical insurance company to building a “culture of health” which encourages employees to take care of their personal health.  Regardless of the size of your company, you can employ these strategies to lower the cost of employee health care too.

Select a committee that includes both management and employees to shop for health insurance.  This enables everyone to fully appreciate the costs involved and is much more likely to generate full buy-in from everyone covered by the program.  Many employees are unaware of the hefty cost of health insurance, so make sure that their representatives keep all informed of the tremendous value of this benefit.

Make employees more accountable for the health care decisions they make.  For example, offer coinsurance rather than co-pays; by making the money spent on things like annual doctor’s visits come from an employee’s fund, he or she is more likely to shop for the best deal rather than just accept whatever is provided for their co-pay.  Whole Foods has enjoyed wonderful results from this tactic.

Measure the results to manage costs.  Before selecting a program for the new year, review what services were actually used in the prior year.  Did employees use the expensive prescription drug coverage, or would the lower cost of generic coverage save everyone money?  Were extras like pregnancy, mental health, or substance abuse programs used?  Evaluate each option for its benefit and pare coverage to those items used most.

Encourage healthy habits among employees.  Include healthy options, such as granola bars in the snack machine, and choose wisely when department lunches are brought in.  Sponsor a company softball team, or lead lunch hour hikes around the office complex.  One of my old companies organized a “walk” from Denver to New York City.  Each employee would walk a distance each day, then report the mileage to the walk coordinator.  When our combined distances covered the length of the trip, we celebrated with a healthy meal sponsored by the company.  Everyone participating developed the exercise habit and lost weight at the cost of a team lunch.  Smart move!

While these ideas may be easier to implement for larger companies, there are many ways to adapt them and save money on small business health insurance too.  Brainstorm for ideas to make your office a healthier place.  You’ll reduce the number of sick days, increase camaraderie among employees, and best of all, reduce the cost of employee health insurance.