Exploring Ways Employers can Lower Health Care Costs

Employers are continuously faced with the challenge of the escalating costs of health insurance and providing a comprehensive employee benefit plan to their employees.

According to a recent report by the Kaiser Family Foundation, in 2009 the average annual premium for employer sponsored health insurance was $4,824 for single coverage and $13,375 for family coverage.

We know it hasn’t gotten any cheaper to offer traditional group health plans…

To address the cost of health insurance, employers have responded with any of the following strategies:

1. Adjusting the premium cost share,
2. Increasing the cost for health care services (deductibles, co-payments, or coinsurance),
3. Restricting eligibility for benefits, and/or
4. Introducing a tiered physician and/or hospital network

It is without question that adjusting an employee's cost share for health insurance or their access to health care services does not provide a long term solution toward reducing the cost of health insurance - it is simply a temporary solution.

For employers to have a long term impact of the cost of health insurance, they must recognize that an average of 85% of health insurance premiums is paid to health care providers(physicians, hospitals, etc.).

As a result, for employers to have a lasting impact on health insurance premiums - a focus on health care costs will provide the employer with a more effective solution.

Employers must consider that over 70% of health care costs are the result of preventable health care conditions and an estimated 66% of U.S. adults are either overweight or obese. It is imperative for employers to embrace the opportunity to improve the health of their employees and their dependents to reduce the cost of health insurance.

Comprehensive wellness programs have proven successful to reduce expenses influenced by the health and wellness of employees, improve productivity, and reduce absenteeism. A study by the Center for Prevention and Health Services shows that employers get back $3.48 in reduced health care costs and $5.82 in lower absenteeism for every dollar invested in employee wellness.

For any wellness plan to be successful, it must include certain key elements.

Contact Health Benefits US Inc for a complete copy of this post with wellness program recommendations.