The below excerpt was in the 1st Quarter 2017 MHEDA Journal.
Expert Advice – Ask A MHEDA Net Group – “What are you and your organization doing to combat the rising healthcare costs?”
David Iliff, Chief Financial Officer, DuraServ, Farmers Branch, Texas.
We started to look very seriously at our healthcare costs four to five years ago after multiple years of double digit percentage cost increases. After long discussions with our benefits advisor and consultation with our employees we implemented the following changes to our healthcare insurance plans. With the following changes below (and some luck!) we have kept our healthcare costs to low single digit percentage increases over the past three years on average.
1. Entering into a “level funding” plan with our insurance carrier. A level funded plan is a midway point between a classic premium only insurance plan and a self-funded plan. It provides some upside to the company if claims come in below a set target, but caps the total out of pocket expense2. Transitioning all employees to a high deductible /health savings account (“HSA”) plan. We believed the high deductible/health savings account would increase consumerism amongst our employees on day-to-day healthcare choices. Transitioning to these plans does require a lot of education (our HR department has done an excellent job explaining how an “HSA” works). We transitioned to 100% HSA adoption over a three year period, while contributing a large dollar amount to our employees HSA bank account, to help them offset the higher out of pocket expenses.
3. Starting a companywide wellness program, while offering discounted premiums to non-smokers and employees that participate in an annual check-up. We held a six week wellness competition for all of our employees. We purchased all participants a “Fit-Bit” and then logged how active our employees were on a daily basis and awarded prizes. It really got our employees thinking about how active they are on daily basis. In addition, we have also discounted premiums to non-smokers, while offering a smoking cessation program to those impacted by the higher premiums. We have had well over ten employees stop smoking through the smoking cessation program. Finally, we recently implemented reduced premiums to employees that do an annual biometric screening or meet with their doctor for an annual “wellness check.” Overall, the changes have been well received by our employees, but the key was good communication from the beginning. We found that if you are transparent about the challenges the business was facing on healthcare costs, employees understood why dramatic changes were necessary.