After two years, it’s clear that the COVID-19 pandemic has had a very large impact on businesses across all industries. The economic challenges are very real and containing costs in all areas of operations is essential. Cost containment for employee health benefits is not a new concept at GroupHEALTH. Long before the pandemic, we recognized that including cost containment mechanisms in our plans is an essential ingredient for sustainability.
Employee Benefits Matter
When the budget is stretched tight, some companies may toss around the idea of eliminating their employee health benefits plan all together. After all, it’s a significant expense. The problem with this logic is that an employee benefits plan is not just an expense, rather it is an important investment. An investment means that you are expecting an appreciation in the asset. In this case, that asset is your employees. Your employee benefits plan provides significant tangible and intangible returns on your investment.
A good employee benefits plan can:
- Support recruitment efforts – It’s a competitive labour market and whether or not a company has a good employee benefits plan can be a deciding factor for many prospective employees.
- Improve productivity – Having access to employee benefits mean employees are more likely to fill their prescriptions, access paramedical services and generally take better care of their health. Healthy employees are productive employees – it’s a win/win.
- Foster a positive company culture – Employee benefits send the message to employees that their employer cares. This is good for company culture in that happy employees are more likely to work harder and go the extra mile for their employer.
- Retain workers – Hand in hand with a positive company culture is retainment. A good employee benefits plan can mean that your employees aren’t as likely to look for a new employer.
When looking at how to contain costs for an employee benefits plan, it’s important to ensure that any measures taken to contain costs don’t compromise coverage. Containing costs by simply reducing coverage is usually a counterproductive strategy. Instead, innovative solutions that preserve the value of the coverage while also controlling costs are where it’s at.
Smart Rx Solutions
One of the biggest cost drivers for any employee benefits plan is prescription drugs. Brand name drugs and specialty drugs are two of the biggest culprits, but pharmacies that charge excessive mark-ups and dispensing fees are also contributing factors.
The team at GroupHEALTH looked at these cost drivers and created a suite of products meant to target them. The result was our suite of Smart Rx products. These products utilize central dispensing pharmacies to courier prescriptions directly to plan members. We’ve negotiated maximum markups and dispensing fees to help contain prescription drug costs. Not only does this save the plan money, but plan members experience the convenience of having prescription drugs delivered directly to their door.
Other Smart Rx products include drug formularies to encourage plan members to choose generic or therapeutic alternatives to expensive brand-name drugs. This way the plan member still gets the prescription drugs they need, but plan costs are mitigated.
Disability Management Services
Disability claims are another large cost driver for employee benefit plans. Statistically, 90% of employees who are absent for more than a year due to injury or illness never return to gainful employment. This can have a big impact on plan costs. This is where disability management services come in.
Disability management services aim to shorten the duration of an absence by supporting the ill or injured employee in returning to the workplace. This means coordinating with the employee to support them in their recovery, while also keeping the employer appraised of the situation. Next, they create a customized return-to-work plan that takes into account the employee’s recovery and abilities. These person-centered services help an ill or injured employee through a very difficult time, but also help contain plan costs by shortening the duration of a disability claim.
Employee and Family Assistance Program (EFAP)
While at first glance, an employee and family assistance program is a great benefit for employees and their families, it’s also a cost control mechanism. Untreated mental health challenges can lead to absences, disability claims, physical ailments and decreased productivity.
Providing employees with access to an EFAP is an important way to support mental health and give employees the tools they need to deal with challenges. One of the main pillars of an employee and family assistance program is free short-term counselling. Providing one point of contact to get help removes barriers for employees who are struggling, and online resources give tips and advice on many common stressors and mental health challenges. Making it easy for employees to get the help they need can help prevent more serious consequences. In this way, an employee and family assistance program is a cost containment strategy. At GroupHEALTH, we believe in its value so much that we include it with all our employee benefit plans.
As the COVID-19 pandemic continues, many industries and businesses are facing uncertainty. It’s a roller coaster of restrictions, closures and changes that impact the bottom line for many businesses. If our ‘new normal’ is going to mean a lot of volatility, then it makes sense to take concrete steps to control costs. There are cost containment strategies for employee benefits that can allow you to continue supporting your employees, while also protecting the sustainability of your plan and your business.
Good Advice is Key
Does your employee benefits plan have built-in cost containment strategies? Are you wondering how you can support your employees and afford to foot the bill? Review 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.