Maximizing Profits by Lowering Health Care Costs in an Obamacare Society
Health care costs are a growing concern among small and large business owners across the United States. The cost of medicine in the United States is out of control, with the average CT scan or MRI costing thousands of dollars. Simple and complex treatments, office visits and procedures are costing employers millions of dollars and decreasing the profitability of their organizations. Due to rising health care costs, employers are forced to cut bonuses, cut expenses, and sometimes lay off employees, adding to stress.
Employers can manage health care costs in a society preparing for a major health care revamp by monitoring the eligibility of spouses and dependents, investigating and reporting all claims, switching to different policies, promoting health insurance for the spouse, reduce workers’ compensation payments, and develop a legal team to handle litigation and settlement matters.
Using competitive business strategies that closely monitor spending can control health insurance costs. In 2007, the average employer paid $12,106 in health care costs and the employee shouldered $3,281 of the bill. Health care costs continue to rise, causing financial problems for employers.
Conduct Family Eligibility Audits
An employee’s family is one of the largest health care expenses businesses face, as children and spouses become ill over the course of their policy. It is common for companies to spend millions on an employee’s dependent or spouse. Businesses can reduce the amount of money spent on spouses and dependents by actively investigating all non-employee claims.
In most policies, a dependent is defined as someone under the age of 18 or who is a full-time student under a certain age. New Obamacare insurance reform requires employers to pay for dependents under 26; however, many current policies set the age at 23 or 24 years.
Employers can minimize health care costs by ensuring that anyone over the age of 18 is a full-time non-exempt student. Employers can encourage employees to set up their dependents with school-sponsored insurance, which lowers the overall cost to employers. Additionally, employers can modify policies to remove nonrestrictive verbiage from documents, such as policies that do not require older dependents to attend school. Dependent status verification can be obtained from major national clearinghouses and verification services at a fraction of the price of your health plan.
There are other loopholes in health insurance that employers can take advantage of, such as retirement benefits for dependents, as well as dental and vision services. Limit the scope of retiree health plans by eliminating dependent coverage, providing only medical services to the employee’s spouse. Also, consider modifying dental and vision coverage for dependents by limiting it to essential and preventive services.
Deductibles and Out-of-Pocket Costs
Employers can significantly reduce the amount of money they spend on an employee’s health insurance plan by using high-deductible plans, which ensure their workers are protected in the event of serious illness or injury. In addition, deductibles place the lion’s share of annual expenses on the employee, with the employer acting as a backup in the event of life-threatening illness, costly operations, and other costly procedures, such as CT scans or MRIs.
High-deductible plans are ideal for small and large businesses that want to minimize the health care costs and risks associated with traditional high-premium plans. Employees are mindful of their high deductibles and take a proactive approach to their health, avoiding costly hospitalizations for preventable conditions like diabetes.
When employees are aware of the true cost of healthcare, their overall behavior toward a healthy lifestyle improves. They are also more appreciative of the services and benefits offered by their current employer.
Minimize healthcare costs by splitting or switching plans
Encourage employees to use their spouse’s employer-paid health insurance package, if available. The strategy can be marketed as giving them maximum coverage, pointing out how their spouse’s program is a viable alternative. Educate employees on the open enrollment procedure, encouraging communication within your family on the subject.
Employees can save up to $5,000 by switching to their spouse’s insurance, especially if the employee had a high-deductible policy. Another option is to encourage employees to split their dependents’ coverage between both health plans, which minimizes financial risk to your business.
It is illegal to require employees to switch to their spouse’s plan or remove dependents from their policy. Incentive programs are not ethical, but they can reduce health care costs in your organization. Use this method as a last resort, as some employees may take action against the company. Insurance commissioners frown on the spouse switching incentive or program, so splitting spousal and employee coverage is best encouraged.
Start a healthy living program
The fastest and most efficient way to reduce health care costs is to encourage your employees and administrative staff to lead a healthy and preventative lifestyle. Preventive care costs much less than other medical procedures, reducing out-of-pocket costs for both the company and the employee. Offer rewards or incentive programs for employees who quit smoking, lose weight, stop drinking, or take a proactive approach to their health.
Be careful when publicly honoring the employee in front of co-workers, as some may be nervous or reserved – these are sensitive topics, after all. Healthy living programs encourage a healthy lifestyle, in which the employee receives routine checkups and works to reduce preventable conditions, such as obesity and high cholesterol. Healthy lifestyle programs can focus on diet, weight loss, smoking, alcoholism, aging, and stress. Additionally, healthy employees can participate by continuing to exercise routinely and reducing their stress levels.
