Some economists–and many hopeful business people–predict a turnaround in the U.S. economy this year. Whether they are right or not, one trend not expected to change is rising health care costs.
Premiums for employer-sponsored health insurance rose an average of 11% in 2001, and another round of double-digit increases is expected in 2002.
Even worse, more than 90% of the employers who participated in another survey believe health care costs will continue to escalate at double-digit rates for at least the next five years.
At the same time, the economic downturn has led to layoffs and a softer employment market. With more candidates for fewer jobs, some employers may view benefits packages as less important to attracting and retaining top talent. They may even be tempted to cut back health benefits as a cost-saving measure.
More than 70% of employers in one survey reported they might reduce benefits or raise employee co-pays in the coming year, while more than half said they intended to pass cost increases along to their employees.
Tempting as it may seem, cutting back benefits is not only unwise, it is unnecessary.
Benefits are still a key factor for workers considering different job opportunities, especially in still-tight fields such as nursing. For those who do stay, slashed benefits packages can affect morale and productivity.
Most importantly, a more innovative response is easily available to meet employers and employees needs.
That response is supplemental insurance. This type of insurance allows employers to spend less while offering employees more choices.
In addition to offering new insurance options, a good supplemental insurance provider also will offer strong benefits communication, enrollment and service features.
The result is a win-win situation: employers shift some health care costs to their employees while still offering a competitive benefits package–in fact, a larger total compensation package. Meanwhile, employees better understand and appreciate their benefits while they design coverage specifically tailored to their needs.
Here are some key questions your employer clients should keep in mind when implementing a supplemental benefits program:
How strong is the employee communications program? A strong employee communications program is crucial. It may even be the most important part of your plan, because it can help employers build goodwill with employees and do all the other things shown in the chart on this page.