We have already seen a massive spike in healthcare costs, and there needs to be evident relief on the horizon. HR advisory firm Segal has recently projected that the annual cost trend for outpatient prescription drugs is expected to approach double-digit levels, the highest rate since 2015. That leaves employers with the difficult task of keeping their coverage expenses manageable without further straining employees’ financial well-being.
Employers are doing their best to keep healthcare affordable for employees, while under the stress of the tight labor market, employers are acquiring the added cost. However, budgets are limited, resulting in cutting into funds set aside for other benefit costs such as pay raises. Cost-shifting might have reached its limit, but here are five benefit-design steps employers can take into action to minimize rising costs.
- Mental Health – According to WTW’s 2021 Best Practices in Health Care Survey, 89% of respondents now offer virtual mental health services coverage.
- Telemedicine – Telehealth isn’t a new idea or need. The concept of home-based medical care was mentioned as early as 1879 in a Lancet article about using the telephone to reduce unnecessary office visits.
- Prescription Savings – Every year since 2006, the cost of prescription drug prices has increased at a rate that far exceeds the general inflation rate, according to a report by AARP.
- EAP- Employee Assistance Program – The future of employee wellness and support. Keeping employees’ physical and mental health top of mind not only helps to attract and retain top talent, but can also help close the gap in healthcare disparities.
- Health and Wellness – Companies see the value in their employee’s overall health and wellness. As a result, they are focusing on keeping employees healthy, resulting in lower healthcare costs, equaling lower insurance premiums and less sick time.
These are just a few simple ways to mitigate the rise in healthcare costs. As rates continue to trend upward, PES will continue to focus on developing solutions that help our broker and client partners improve their employee benefits experience and save money.