Health plan costs continue to soar and are expected to increase further in the next few years as the impacts of inflation begin to bear out across the healthcare marketplace. Meanwhile, managing escalating benefits costs, driven by medical plans, is not a simple balance sheet proposition. Never has it been more critical to ensure any cost containment measures do not impact your organization’s recruit and retain strategies. Escalating costs cannot be shifted to employees without acknowledging employees are cost-sensitive themselves with household inflationary pressures.
Create a budget-based benefit design to support business strategy
To keep pace with business strategy, your organization’s financial and employee benefits objectives must be considered together to arrive at both short- and long-term strategies for success. To strike a balance, your organization must explore all options for efficiently financing your healthcare spend through the evaluation of your current funding model. It requires looking at funding options as part of your long-term benefits strategy versus making a short-term reaction to expense management. To build this long-term strategy, it is important to:
- Perform a cost-benefit analysis of your current health plan(s) and funding arrangement
- Prepare a multi-year cost projection
- Develop an understanding of the complexities, advantages, and disadvantages of the various funding options
- Have a plan to move along the spectrum of funding alternatives as evolving data continues to inform choices
Deciding on your organization’s health plan funding arrangement is a decision that should be based on your business objectives, population, claims history, and risk tolerance. When finance and HR come together, they can develop a holistic view of employee benefits that keeps pace with the business strategy and meets both financial and employee benefit goals.
Learn why exploring funding options is an essential component of developing your business strategy. Contact us at email@example.com or download our latest white paper, The New Imperative for CFOs and CHROs – Exploring funding options for efficiently financing healthcare spend.
With more than 7,000 clients managed in our National Employee Benefits Practice, Risk Strategies delivers the high-quality, cost-effective, and compliant benefits programs and solutions employers need and employees value. Visit risk-strategies.com for the latest observations in employee benefits.