Employers Strategize to Moderate Employee Health Insurance Costs

Employers resort to the most popular method of health insurance for employees by shifting part of the cost for health insurance to the employee. Many of them are resorting to new health tactics to lessen the cost and take care of the health of the population in general. According to Aon Hewitt’s soon-to-be-published Health Care Survey of more than 1,230 employers covering more than 10 million employees, 52% of employers said their current health strategy is focused on traditional trend mitigation approaches, such as employee cost shifting. Around 21% would prefer the cost shifting approach after 3-5 years. After 5 years 60% of employers plan new tactics where employees are involved and they plan to “gate” them so that they earn better returns. The employees need to complete a “task” so that they can avail higher provident.

“Gating strategies are becoming an increasingly attractive incentive technique among employers as they look to improve the health of their employee populations,” said Jim Winkler, chief innovation officer of Health & Benefits at Aon Hewitt. “For example, employers may offer a basic high-deductible plan to their entire workforce, but make a richer PPO option available to those employees who complete a health risk questionnaire or biometric screening.”

Some 68% employers plan to adopt reference-based pricing—where employers set a pricing cap on benefits for certain medical services for which wide cost variation exists without any noticeable differentiation in quality. “Despite the long-term promises of innovative strategies, employers are still gravitating towards existing cost control tactics because they can see immediate benefits,” added Winkler. “However, these traditional cost-sharing approaches will not be as effective in the future, and employers will need to adopt multiple strategies to improve the foundation of how benefits are delivered, including funding, design, clinical and provider system changes.”

According to Aon Hewitt’s survey, employers are thinking of using some plans to reduce health care costs in the next 3-5 years. “The fundamentals of health care still matter, but employers are increasingly realizing that traditional approaches to mitigate health care cost trend need to be advanced,” said Tim Nimmer, chief health actuary for Aon Hewitt. “Over time, plan design strategies will evolve to be more requiring of employees, and individuals will be held more accountable for their health and for using health care. At the same time, we see that employers are increasingly committed to providing employees with decision support tools that provide greater transparency around the cost and quality of care, so that individuals can make more informed health decisions for them and their families.”

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Hannah Punitha (IRDA Licence Number: 2710062)

Source-Medindia