As Canada rides out a challenging time for the economy, it can be a difficult time as a business owner. Costs are rising and a widespread labour shortage means it can be hard to recruit and retain employees as well. It’s important to have predictability around your health benefit plan rates. There are a couple of ways to help keep your health benefit plan rates predictable.
Choose the Right Provider
As with anything related to employee health benefits, it’s important to choose the right provider for your plan. The employee benefits plan provider you choose has a significant impact on so many aspects of the plan. The cost of the plan, how you administer the plan, the experience your employees have with the plan and so much more is directly related to the benefits plan provider you choose.
The right provider must share your philosophy about employee benefits. If you value a long-term, sustainable approach to employee benefits, then you shouldn’t choose a provider who is only focused on getting you a bargain rate at the initial sign-on.
You’ll need a provider who will communicate with you regularly – this way you’ll know what’s going on with the plan and how rates may change. A provider with a long-term approach to benefits will be able to offer you a higher degree of predictability around benefit plan rates.
Benefits pooling is an important mechanism to moderate rate fluctuations. It’s an especially good tool for small businesses.
When insurance companies calculate premiums, they take into account things like: age and gender of employees; industry and sector; and past claims experience. For a small group, a year with poor claims experience can have a significant impact on benefit plan rates.
Benefits pooling addresses this by grouping together claims from a number of organizations so that the organizations support each other during low and high claim years. The risk of claims being higher than anticipated is transferred from one to many.
For small groups (especially) it can be difficult to predict claims; pooling can help protect the plan sponsor from rate fluctuations due to variable claims. For larger groups, pooling for some benefits also makes sense. Consider high-cost specialty drugs or biologics – a single claim can be hundreds of thousands of dollars. Including a threshold over which prescription drug claims will be pooled can be a good option.
Pooling can be done for all benefits (most common with smaller organizations), or it can be done at the benefit level. For example, most organizations usually pool disability and life insurance, while larger companies may choose NOT to pool prescription drug coverage because of predictable claims. By not pooling, the larger organization may see a financial gain during years where prescription drug claims are lower than anticipated.
Keep in mind, even within the pool, individual groups premiums are still calculated based on each company’s claims experience and level of risk. This means employing strategies to control costs and claims is still important even when benefits are pooled.
Your benefits plan provider is your best resource to discuss pooling benefits as a tool to keep rates predictable.
Build Cost Control into the Plan
Another way to help keep your health benefits plan rates predictable is to build cost-control into the benefits plan. This doesn’t have to mean a reduction in the support or benefits provided to the employee; creative cost-control mechanisms effectively support employees while also controlling costs. Cost control built into the plan doesn’t necessarily reduce claims, but it can reduce the value of the claims, which can help with keeping rates predictable.
There are many ways to build cost control into the plan, at GroupHEALTH, here are a few of our favourites:
- Smart Rx Solutions – Smart Rx Solutions are options for prescription drug coverage that encourage employees to choose lower cost (but equally effective) prescription drugs and/or a central dispensing pharmacy.
Employees receive a higher degree of coverage for choosing lower cost options – often this means choosing a generic drug over a brand-name drug, or trying lower cost options before moving on to higher cost prescription drugs. This helps control costs and keep rates predictable.
- Employee and Family Assistance Program – Including access to an employee and family assistance program is an important way to support mental health. While providing support for mental health is the right thing to do, it also functions as a cost control mechanism.
When employees have access to counselling and support they are more likely to get the help they need sooner. For things like stress, anxiety or depression, the employee and family assistance program may prevent things from escalating to the point that prescription drugs or a disability leave is required. This helps minimize claims and keep rates predictable.
- Disability Management Services – Disability management services support you and your employee during a disability leave, but they also help control the cost of the disability claim. Employees receive support during the claim so they can focus on getting better while still feeling connected to the workplace.
Disability management services help employees to get the medical care they need. Next, a customized return-to-work plan is created, taking into account abilities, workplace environment and more. This helps get the employee back to work as soon as they’re able, reducing the length of the disability claim.
Managing a disability claim in this way helps control claim costs, keeping rates predictable.
Good Advice is Key
Are you looking for predictable rates for your employee health benefits plan? Does GroupHEALTH’s promise to provide manageable, stable and predictable rates sound good to you? Explore your options with one of our licensed advisors on the phone, or contact us for a comparison quote.
Whether you’re looking for extended health and dental coverage, disability coverage, or life and critical illness coverage, GroupHEALTH has affordable benefits packages that work as hard as you do.