Companies that provide competitive employee benefits may have an easier time attracting and retaining talent. Health insurance is an essential benefit, and many employers want to provide their employees with strong coverage. However, health insurance costs can put a company under financial strain.
Being aware of what factors most impact the cost of health insurance can allow your company to improve employee healthcare while strategically lowering insurance costs.
What Affects Healthcare Costs?
Many factors can affect healthcare costs, including the sometimes unpredictable nature of individual health. However, four main aspects of insurance plans affect costs.
- Carrier: Different insurance carriers offer higher or lower plan premiums.
- Copay: Higher copays can reduce plan premiums, while lower copays typically mean higher premiums.
- Prescription coverage: Some health insurance plans cover prescriptions separately, and some don’t cover them at all. If your coverage pays for common to specialized medications, your premium may be higher.
- Deductible: High deductible plans often come with lower premium amounts — and vice versa.
How Can I Improve Employee Benefits While Reducing Insurance Costs?
Compare different carriers’ health insurance plans focusing on copays, prescription coverage and deductibles. Controlling these aspects of your plan can help you balance employee coverage and overall cost.
Choosing the right health insurance requires careful research. There are several ways you can minimize healthcare costs. Here are seven ideas for improving employee benefits while reducing insurance costs.
1. Become a Difference Card Client
Complementing your employees’ insurance plan, The Difference Card is a benefit that can help reduce copays and deductibles. On average, The Difference Card saves its employer clients 19.6% in the first year.
The Difference Card offers lifestyle spending accounts that align with employees’ needs by covering commuter and parking expenses, dental care, and compliance solutions. Instead of paying a high monthly premium for dental care, you pay for incurred dental costs. You can offer your employees dependent care accounts to care for their loved ones. The card’s health reimbursement arrangements provide members with a specific yearly amount for health-related expenses.
Key Features
- Flexible virtual or on-site enrollment process
- Reimbursement within two business days post-care
- An incentivized wellness program to promote healthy behaviors
- 24/7 automated phone support with a low average wait time of 41 seconds
- Fixed-budget options for managing health-related costs
- Triple-tax-advantaged health savings accounts
- Flexible spending accounts that allow employees to pay for healthcare pre-tax
2. Educate Employees
Providing employees with accessible education on healthcare benefits them and can reduce your company’s insurance costs.
Employees who understand their benefits may be better able to make efficient healthcare decisions. For instance, some situations require an urgent care visit, while others require an employee to visit the emergency room. Employees who are well-educated on their plan information may be able to understand and catch errors in their medical bills, potentially saving you money.
3. Offer Plans With Higher Deductibles and Health Savings Accounts
Many employees are required to contribute more to their health insurance to reduce the financial burden on the employer. However, this cost-saving method for companies can place financial hardship on employees. Family health insurance premiums increased by 24% from 2019 to 2024.
Consider choosing plans with higher deductibles while offering your employees a health savings account (HSA). HSAs are a popular benefit among employees because HSAs allow the account holder to contribute tax-deductible or pre-tax money to their account, which can increase in value.
4. Offer Telehealth
Telehealth offers a convenient and often cost-effective way for employees to seek medical care and guidance from the comfort of their homes. They can connect to a medical professional using a computer, tablet or smartphone. Not all medical concerns warrant a visit to the doctor’s office and some employees may even prefer telehealth appointments as a time-saving method. Telehealth visits are typically more affordable compared to on-site visits.
5. Offer Wellness Programs
Wellness programs can educate employees on the best practices for a healthy lifestyle. Employees can gain knowledge on everything from nutrition and fitness to mental health awareness. This knowledge can lead employees to make better decisions when it comes to health-related behaviors, saving your company money by potentially lowering claims.
Organized fitness activities can boost employee morale and lead to team bonding. Discounted fitness classes, nutrition workshops, diabetes management tools, stress reduction sessions and smoking cessation programs are all benefits you can offer through an employee wellness program.
6. Promote Work/Life Balance
A healthy work/life balance can reduce employee burnout and stress, leading to better mental and physical health. Better mental and physical health benefits employees and companies since insurance costs may be lower and workplace productivity will likely increase. Studies show that a balance between an employee’s work and personal life increases loyalty, helping companies retain top-performing employees.
You can support your employees’ healthy work/life balance by offering flexible work options — such as remote or hybrid schedules — and an ample PTO allowance. Mental health resources and programs that bolster employee morale by acknowledging and rewarding hard work through bonuses or company-wide shoutouts are also great ways to promote a healthy work/life balance.
7. Provide Health Assistance Services
While offering your employees additional healthcare in the form of assistance services may seem more costly, health assistance programs can save your company money long term. These programs offer members support via various communication platforms, such as hotlines, texting, chats or video conferencing.
Medical professionals can answer members’ questions on insurance coverage and basic health concerns, among other things. Empowering your employees with knowledge about their insurance plan and individual health can lead them to make more cost-effective decisions.
Improving Employee Healthcare at Lower Cost
Balancing healthcare benefits and insurance costs requires research. From becoming a Difference Card member to offering wellness resources, there are many ways to improve healthcare at low cost.
To find the right methods for your company, you must understand your employees’ needs, your budget, and the benefits of different insurance providers.