HEALTH BENEFITS
" EMPLOYERS CAN EDUCATE EMPLOYEES ON THE PRICE DIFFERENCES BETWEEN NAME-BRAND AND GENERIC MEDICATIONS ."
1 . CONTROL DRUG SPENDING
Drug prices are rising faster than any other medical service or commodity . Prices are now 33 % higher than they were in 2014 , according to GoodRx . This is a significant problem during inpatient procedures , where individuals aren ’ t usually given an option to select a generic medication . Patients rarely know what drugs they ’ re given until after the fact . Even in routine prescription scenarios , employees may be prescribed name-brand medications simply due to physician preference .
Employers can educate employees on the price differences between name-brand and generic medications . Doing so can help employees understand that they can save money while still receiving the same quality treatment .
Additionally , employers may consider introducing varying levels of prescription drug coverage . For instance , fully covering generic prescriptions or drugs used for chronic conditions . For higher levels ( e . g ., specialty drugs ), employers may cover less of the costs . Ultimately , employers will need to determine the appropriate coverage levels for their unique workplaces .
2 . ENCOURAGE ACTIVE BENEFITS PARTICIPATION
Beyond drug spending , employers can help limit overall health costs by making employees active participants in their health care . This means encouraging employees to improve their health literacy and research treatments and to price shop .
Price shopping , in particular , should be easier in 2022 , given the new hospital price transparency rule that takes effect January 1 , 2022 . Employees will now be able to see specific prices for procedures and other services . This incentivizes employees to educate themselves before making costly health decisions .
3 . OFFER SAVINGS ACCOUNTS WITH CARRYOVERS
Health plans with savings components are becoming more popular each year . That ’ s because these tax-advantaged savings accounts empower employees to control their own spending and improve their health literacy . The accounts include health savings accounts ( HSAs ), flexible spending accounts ( FSAs ), and others .
Many accounts allow for fund carryover year to year or allow employers to add that option onto their plan designs . Allowing carryover encourages employees to contribute more funds since they ’ re no longer in a “ use it or lose it ” situation . Since many employers match contributions up to a limit , more money added to these accounts means greater tax savings for everyone .
4 . EMBRACE VIRTUAL HEALTH OPTIONS
One major takeaway from the COVID-19 pandemic has been that virtual solutions can offer high-quality outcomes . This is so true that many companies are allowing employees to work remotely permanently . Virtual health options are no exception to this trend .
There are countless telehealth services available these days . Individuals can connect with health professionals in just a few clicks — no waiting times or driving to a clinic . Additionally , individuals will not need to take large chunks of time off work , allowing for greater productivity . As such , telehealth solutions are often much less expensive than a typical in-person doctor visit . Even the Centers for Medicare & Medicaid Services ( CMS ) acknowledges the usefulness of telehealth services , seeking to expand access .
Employers can consider adding telehealth services into their plan designs . In some cases , it may be cost-efficient for employees to schedule a virtual health visit before an in-person appointment . In any case , having a telehealth option expands access to care and lowers expenses for everyone .
5 . CONSIDER PLAN FUNDING ALTERNATIVES
A more drastic option for reducing health costs is restructuring how plans are funded . For instance , a self-funded plan may be more cost effective than paying a monthly premium for a fully insured plan . Other options include level-funding or reference-based pricing models , each of which carries its own set of administrative rules and legal constraints .
Funding decisions should not be taken lightly and should be based on several factors , such as the size of an organization , risk tolerance , and financial stability . Employee financial stability should also be considered , especially while the effects of the COVID-19 pandemic can still be felt . Employees may not be able to bear the burden of large premium increases , constraining some plan funding flexibility options .
Historically , employers have shifted costs onto their employees ( usually through higher premiums ) as a way to reduce spending . However , that trend is not expected to be widespread in 2022 . Considering the tight labor market and how many individuals are struggling financially due to the pandemic , employers will likely be hesitant to shift too much of the burden . Doing so may cause employees to seek other jobs or simply forego preventive care , which can lead to chronic conditions and higher future health care costs .
CONCLUSION
Employers have a variety of ways in which they can help contain health care expenses . Choosing the right method will depend on unique employee populations and budgets . Reach out today for help strategizing your best options . +
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