Written by Oralie Chapman
Most Hawaii companies just got their health care renewal documents for January 1st, 2019. If you’ve had a chance to read them over you know that you are likely facing higher health care costs and renewal rates – right as you need to offer competitive benefits to attract employees in Hawaii’s record low unemployment rate labor market. Like many other business owners, you may have begun to shop around for new health care plans or are wondering how to reduce your healthcare costs.
How much will employer health care plans increase in 2019?
Employers should expect health care and drug benefits to increase by five percent in 2019; this is the sixth consecutive year to see a five percent premium increase. Premiums and out-of-pocket health care expenses for employees and their dependents will average $14,800 next year and employers are likely to continue covering an average of 70 percent of the cost of employee health care premiums. Employers with high-cost claimants for specialty pharmacy and the treatment of serious diseases and conditions such as various forms of cancer were identified as the main reasons for the cost increases.
Top 10 ways to reduce employer healthcare costs
- Create health incentives.Unhealthy habits such as smoking are a big factor in increasing healthcare costs and rising premiums. Employers can create incentives for their employees to stay healthy such as offering prizes for most improved health scores, paying a higher percentage of an employee’s healthcare premium for anyone who has a healthy BMI and low blood pressure or giving pedometers to motivate employees to be more active.
- Offer a wellness program.Ideas for wellness programs include providing an online tool that helps employees track calories and eat balanced meals, bringing in fitness teachers or health speakers before work hours or on lunch breaks and paying for gym memberships.
- Limit spousal coverage.Implementing a rule that says if an employee’s spouse has access to reasonably comparable healthcare benefits, they must utilize them. This saves money on potential claims and health care premiums.
- Offer health savings accounts (HSA).With costs of an HSA being 25 to 35 percent less than those for a traditional healthcare plan, there is a lot of potential for saving money.
- Take advantage of discount drug programs at major pharmaceutical chains.For example, Walmart offers more than 300 generic drugs and over 1,000 over-the-counter drugs for a four-dollar copay.
- Educating your employees on the appropriate way to seek health care. Your employees should understand that going to the emergency room costs well over $1000 compared to about $200 for a visit at a doctor’s office or walk-in clinic. Requiring employees to have a primary health care physician and providing information about local walk-in health care clinics that are open on evenings and weekends are ways to reduce unnecessary and costly emergency room visits.
- Incentivize employees to quit smoking.Each employee who smokes costs their employer an additional $4,000 per year in healthcare costs and reduced productivity. Providing financial incentives to quit and paying for items such as nicotine gum to help smokers quit can payoff in the long run.
- Smart plan design.Design your health care plan to encourage employees to use the lowest cost option. For example, the co-pay for a general practitioner’s office visit should be the smallest, followed by a specialist office visit and highest for an ER visit.
- Shop for a new plan every year.You may think that you are getting the best deal but plans and rates change every year. You may be able to save money by comparing plans before renewing.
- Choose a PEO.Consider offering employee group health benefits through a Professional Employer Organization (PEO). A PEO offers small businesses access to health coverage at the same discounted rates that large corporations are given.
The cost of labor keeps going up. How can Partnering with PEO Makai HR help you to control rising HR overhead costs?
With the cost of doing business in Hawaii at record highs and climbing, we know how important it is to keep labor costs in line with revenue. Our plans are priced competitively and include value-added services like time-in/time-out systems. Our three tiers of PEO service plans are tailored to the size of your business and specific needs. We offer a 100% paperless solution which means that your employees can manage their needs through a computer, tablet or phone. When you partner with Makai HR you can focus on growing your business while we take care of your employee needs from payroll to taxes, health insurance/benefits and worker’s compensation. We can truly improve your employees work benefits while saving your money and freeing you up to run your business.
What are you waiting for? Companies who partner with a PEO benefit from 7-9% faster growth, 10-14% lower employee turnover; and they are 50% less likely to go out of business. Contact Makai HR today to get started! www.MakaiHR.com 451-0000