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With the current economic headwinds, and the potential of layoffs or hiring freezes, employers need to find new ways to keep benefits that matter most to employees while controlling costs. It is now essential for your Chief Financial Officer (CFO) to partner with your Chief Human Resources Officer (CHRO) to strike a balance. Together, you must explore all options for efficiently financing your organization’s healthcare spend through evaluation of your current funding model.
Evaluating the variety of funding models available to meet your organization’s current business objectives can reveal the best of both worlds. A new model may introduce an opportunity to reduce costs and customize benefits for your employee population. Reviewing funding model options should be included as a part of your strategic benefits planning to feel out if, and when, your organization is ready to ‘unbundle’ certain coverages and manage them directly.
Understanding the pros and cons of various funding models is important. There are advantages and disadvantages to consider when determining the right funding strategy for your organization. This requires your CFO and CHRO to work together to fully understand the implications of the options available when selecting or evaluating health plan funding models.
HR executives know how to consider your organization’s demographics, claims history, benefits trends, and employee needs to design a healthcare program that contributes to your organization’s talent strategy. The CFO understands the financial expectations and limitations of your organization’s budget, cash flow, and risk tolerance. Yet often, decisions and budgets are determined and influence benefits strategy without these critical roles coming together to have a deep understanding of the impact to both your bottom line and your employees.
Together, you can ensure your organization takes the deep dive necessary to understand the tradeoffs on risk versus reward across the spectrum of options to fund your healthcare benefits.
Learn the pros and cons of various funding models in our whitepaper, The New Imperative for CFOs and CHROs – Exploring funding options for efficiently financing healthcare spend or contact us at firstname.lastname@example.org.
With more than 10,000 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.