With drug and disability costs continually rising, keeping employee benefits affordable is one of the most urgent and complex challenges facing not only the employee benefits sector but business leaders themselves. How to continue to protect employees, their families and your organization with competitive and comprehensive coverage in the face of costs that continue to rise, often from factors outside of our control?
The simplest answer? Prevent the costs from occurring in the first place.
Prevention benefits everyone
Taking steps to prevent negative health events from occurring benefits both employees and employers. From an employer’s perspective, fewer health conditions mean lower drug and extended health claims. It means fewer sick days and lower claim costs. It means healthier and happier employees, and that can lead to more productive employees. Simply put: it saves money and improves business outcomes.
For employees, it can mean a better quality of life and fewer negative health events in the future. The important routines, habits and services that accompany strong prevention have a positive holistic impact on the lives of employees and their families.
Be proactive with prevention strategies
There are numerous ways to use prevention to help reduce prescription drug and disability costs. Prevention strategies may not completely stop a negative health event from occurring, but they can lower the probability or decrease the severity of the health event, often by detecting disease earlier. This, in turn, can lower prescription drug and other claim costs. Here are some strategies that are worth considering.
A well-designed wellness strategy can have far-reaching benefits. By developing a corporate culture that supports wellness, employers can encourage employees to become healthier and more active. What does this mean in practice?
It can mean in-house fitness challenges, lunchtime walking clubs, after-work running clubs or employer-sponsored fitness memberships. It can mean organizing flu vaccine clinics at work or onsite biometric screening programs. It can mean handing out pedometers to encourage employees to get their 10,000 steps per day or offering complimentary fruit or veggies (to encourage healthy eating). Online resources to help employees reach fitness goals are also a great idea.
Wellness doesn’t have to be expensive. What is important is to have a top-down commitment from managers. For the best return on investment, leaders need to show that they are committed to improving the health of employees.
These types of simple (and often inexpensive) wellness components really can make a difference in the health of your employees. In this way, wellness is a great way to prevent or lower claim costs.
2. Employee and Family Assistance Plan
Providing employees with an Employee and Family Assistance Plan (EFAP) is a great strategy aimed at supporting mental health. Free short-term counselling along with easy-to-access resources for better mental health can help prevent prescription drug claims associated with mental illness. It can also improve the physical health of employees, as stress and other mental health conditions often contribute to physical health conditions.
A good EFAP should be available 24/7, provide free short-term counselling to employees, be able to alert employees when they might need longer-term support, and have comprehensive online resources that employees can access as needed.
An EFAP is a great prevention strategy because it can help prevent mental and emotional issues from escalating. This translates into lower prescription drug claims and higher productivity.
3. Health and/or Wellness Spending Accounts
If the goal is to prevent prescription drug claims from occurring, the antidote is to have healthy employees. The same goes for disability claim costs. Unfortunately, employees may not have the financial means or inclination to spend on improving their health.
Providing a health spending account (HSA) or a wellness spending account is one way to address this challenge. A health spending account acts like a bank account that employees can access for eligible health expenses. It can be a great prevention tool. With access to this money, an employee may then choose to see a dietician learn about healthy eating, or they may visit a physiotherapist to help improve a back problem before things deteriorate.
A wellness spending account works the same way as a health spending account, but instead, it may be used for wellness expenses. Examples may include new athletic equipment, gym memberships, yoga classes or a bicycle.
Both health and wellness spending accounts are great prevention strategies. They encourage wellness while allowing employees to choose what type of wellness or health treatment is most meaningful to them.
4. Disability Management Services
While disability management services actually come into play after a non-work-related injury or illness has occurred, they are still a great prevention strategy. They don’t prevent the injury or illness from occurring, but effective early intervention can help prevent it from worsening.
Disability management services help ill or injured employees navigate through the paperwork, doctor’s appointments and other tasks associated with the injury or illness. They also help the employee feel connected to the workplace. Together, these services mean the employee is less likely to develop a “disability mindset.” A disability mindset occurs when an ill or injured employee begins to think they can’t get better, which often leads to losing the drive to try to get better.
Getting employees back to work as soon as they’re able is good for disability claim costs, but it’s also good for the employee’s long-term health. Disability management services can be a great way to prevent longer and more involved claims, which ultimately lowers claim costs.
One of the most important strategies for preventing prescription drug and disability costs is education. Employees who are educated on the correlation between wellness, happiness and health are much more likely to buy-in.
It’s also important to make sure employees are educated on the employee benefits themselves. Let them know what they are covered for (for example health spending accounts, wellness spending accounts, EFAP, disability management services) so that they can use those resources and hopefully prevent or limit the scope of illness or injury.
Educating employees on prescription drugs can also help prevent costs from rising. Let employees know that the cost for a prescription drug can vary dramatically based on whether the drug is a generic or a brand name, and where the drug is purchased from. Encourage them to help control costs so they can contribute to the long-term sustainability of the plan.
Think long term
Prevention is always better than meekly accepting large prescription drug costs or disability claims. Developing strategies to support employees and help them live healthy lives can save employers a lot of money in the long term. The age-old adage “an ounce of prevention is worth a pound of cure” is true! Preventing illness or injuries is a win/win for you and your employees.
Good Advice is Key
Does your current benefits plan have strategies to help prevent or lower claim costs? Are you new to employee benefits and wondering what you can do to influence claim costs? 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.