As the national health care battle rages, employers implement new wellness and cost-containment measures.
“There’s not a ton of changes in the AHCA (American Health Care Act) specifically related to employers,” said Sarah Friend, an employee benefits consultant with the Partners Group, a financial services company.
But Friend said employers should pay attention to the federal health care discussion. If Medicaid recipients lose coverage, the cost “is ultimately paid by employers," she said.
The current version of the AHCA would cut hundred of billions of dollars from Medicaid.
Friend was one of several panelists who participated in an Oregon Business forum yesterday about managing employee health care costs.
Self-funded insurance plans are increasing in popularity among employers, panelists said.
Under a self-funded program, the employer assumes the direct risk for payment of the claims for benefits instead of contracting with an insurance company to cover claims for employees.
Renae Coombs, human resources manager for the SAIF Corporation, said the worker’s compensation company decided to move to a self-funded plan about eight years ago.
“We just had to make sure we could handle the volatility of the claims,” Coombs said. “Instead of overreacting [because of weekly claim volatility], you have to look at the long range picture."
Self-funded employers typically save between 6% to 10% of the total cost of the health plan, Friend said.
Rojita Raghubansh, senior vice president of human resources & risk anagement for Harsch Investment Properties, said the company’s self-insured plan has “definitely lowered administrative costs and gave us more control on what we can do with our benefits.”
Wellness programs are expanding as part of corporate culture initiatives and the desire to recruit and retain top talent, panelists said.
Harsch has a robust program that includes activity tracking devices and platform, annual biometric screening and health assessment and an onsite health clinic.
The program is integral to the company culture, Raghubansh said. “It engages people; it’s team building, good for employee morale and has an impact on the cost of benefits.”
Unlike other employer programs, wellness programs are expected to earn a return on investment, Coombs said. “Our healthcare costs are lower year after year. I’d like to ‘blame’ wellness for that, but it’s a lot of factors.”
The company’s expansive wellness program includes everything from ping pong tables to bluetooth-enabled fitness trackers and an onsite biometrics clinic.
The success of the initiative hinges on handholding, Coombs said. "The reason we have a 99% participation rate is because of the nudge, because I drive people insane, and they eventually give up and do what I want."
Friend described several options for small business looking to control escalating health care costs. So-called narrow network strategies are a good alternative, she said. "The average savings if you're willing to put in front of your employers a smaller network is 8% for same benefit," she said. Narrow networks limit the providers employees are allowed to access.
Defined contribution strategies are also growing in popularity. "I do think they will gain momentum," Friend said. "Millennials want more choice; they don't want to be told what they have to choose for benefits."
Rather than paying the costs to provide a specific group health plan benefit, a defined contribution plan allows employers fix their costs on a monthly basis.
Asked how she would rewrite national health care policy, Friend said she would preserve the employer sponsored market.
"It's the one thing that’s working. At a national conversation level, the idea of chipping away at the employer sponsored market or moving it all to a federally funded marketplace scares me.
"If I were queen for a day, I would make sure its easier, not harder, for an employer to offer benefits. We also need a stable Medicaid market."