Health Insurance Headaches
Tuckahoe, New York-based insurance seller Chuck Rollins, president of The Rollins Agency, said controlling benefit costs has been difficult—if not impossible—for his clients over the past 10 years. And, while many companies put benefits programs out for bid every two or three years, seeking the lowest premium possible, he pointed out that this practice may expose them to unnecessary administrative burdens and could actually increase the total cost of their benefits program.
Rollins also cited a 2004 survey by the Economic Benefits Research Institute, Redmond, Wash., in which 79 percent of respondents said they base their decision to accept or reject potential employment on the company’s benefits program. “Businesses are learning that insurance premiums are just one facet of the total cost of benefits,” he said. “The structure and design of a benefits program has a direct impact on key areas, such as productivity, employee turnover and administrative costs. The challenge is to strategically design and manage a benefits program that focuses on all variables that affect total cost.”
An Ounce of Prevention/
A Pound of Cure
Rollins said companies must evaluate whether the insurance professional they’re dealing with is simply an insurance broker or a total-benefits adviser providing value-added services and cost-controlling strategies. He suggested selecting insurance professionals offering annual open enrollment programs, including informative benefits package presentations for employees, as well as quarterly claim reviews and strategy
“Claims should be reviewed quarterly looking for both frequency and severity,” he noted. “Typically, 80 percent of claims are tied back to 20 percent of the employees. Once identified, the broker should proactively manage those situations.” An effective insurance professional should also offer cost-controlling technology tools, such as a human resources portal to simplify administrative tasks, and a customized human resources Intranet.
Next, Rollins suggested partnering with an insurance professional who will provide a strategic wellness program, part of which should include a series of monthly wellness brochures and annual on-site health fairs. “Approximately 40 percent of all health-care costs stem from behavior that people can avoid,” he continued. “One way of holding down health insurance premiums is to persuade employees to follow healthy lifestyles. So, brochures on healthy living and bringing in experts to teach workers about health matters can help.”