Designing a Group Benefit Plan: Striking the Balance Between Comprehensive Coverage and Sustainable Costs

Delivering a comprehensive benefit plan that supports attraction and retention is an enduring goal for employers. At the same time, increasing cost pressures and benefit trends point to the need for a sustainable plan design. Meeting these challenges requires thoughtful consideration and most certainly, meaningful engagement with stakeholders.

Cost Control

In general, there are two areas employers can focus on when it comes to benefit costs. Certainly, program costs that include all the expense factors associated with delivering a plan must be competitive to maximize the value of every benefit dollar. Beyond program costs, plan design and claims utilization become major players in determining ongoing costs. The right cost containment strategy will vary by benefit line and by each employer. Additionally, group size and demographics will influence the plan options available through the benefits provider. Collaboration with providers and advisors can help ensure employers begin a strategic review right from the start.

Once Size Does Not Fit All

Health and dental costs are largely driven by claims utilization. Accordingly, plan sponsors looking to impact costs must consider changes that will have an impact on usage; drugs and paramedical coverage representing two common examples. Ultimately, the right plan design will be as unique as each employer; however, there are ways to implement changes that aid in cost control while also protecting the integrity of the overall plan. From managed drug formularies to preferred provider networks and the introduction of spending accounts, the possibilities are many. Seeking feedback from stakeholders can provide plan sponsors with important insights when determining the right plan design. Surveys, focus groups, and engaging in open dialogue with employees can aid in crafting a plan that will strive to meet diverse needs while keeping costs in check.

Evolving Market

When considering plan design, it is important to take a broad view given the many developments and opportunities that exist beyond the core plan. New products and services offer innovations that can encourage good health while supporting cost control. Pharmacogenetics, virtual care and health coaching are just some of the examples employers may consider. Telehealth modes of delivering care will continue to influence the myriad of options available.

Collective Bargaining

Certainly, plan changes must be negotiated as per any collective agreement. Negotiations may provide an opportunity to trade desired enhancements for long-term cost-saving measures. Your benefits advisor can assist in reviewing proposals and possibilities for consideration.

An Ounce of Prevention…..

Investing proactively in health and wellness will always support a better bottom line. The best plans will include proactive measures like wellness programs and preventive care initiatives to promote healthy lifestyles and reduce long-term healthcare costs. Additionally, the evolution of the virtual marketplace creates tremendous opportunity for cost-effective integration.

Word On the Street

The success of any benefit plan relies on effective employee education and communication. Employees are key stakeholders to the benefit plan yet often there are gaps when it comes to understanding plan coverage and costs. This can have a detrimental impact on perceived value. Educating all employees is imperative to cultivating value for the existing plan and to achieving successful change in the long term. Regular communication channels, such as seminars, newsletters, and online resources can help keep employees informed about the plan’s features, cost-saving measures, and available resources.

Designing a group benefit plan that balances comprehensive coverage with sustainable costs is a complex undertaking. Start the conversation with your advisor and provider to see what the possibilities are for your organization.