Health benefits

What HR Managers Need to Know About Employee Benefits

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However, when employers make health benefit decisions based solely on the immediate financial cost to the organization without considering the impact on their employees, both employees and employers may suffer the consequences. In a recent CancerCare survey of large employers, 98% said direct costs are the most important factor when it comes to benefit design. However, focusing only on these direct costs can obscure important information that employers should carefully consider.

Benefits decision-makers should be aware that a primary tool used to control corporate benefits spending – utilization management (UM) – can be effective in controlling short-term organizational costs, but can also create a host of unintended consequences. MU often results in delays, disruptions, and denials of necessary and urgent care, as well as increased prescription costs for employees, which can lead to discontinuation of treatment and higher downstream medical costs. UM also creates costly administrative burdens for health care providers, which then impacts health system bills and insurance plan premiums.

When striving to deliver high-quality employee benefits, keep in mind:

  • The objective of employer-provided health coverage should be to provide access to prompt and effective treatment.
  • A strong, patient-focused benefits plan can increase employee productivity and satisfaction.
  • EM practices that increase out-of-pocket expenses or impose barriers to care can lead patients to drop out of treatment, which can lead to worse health and higher medical costs down the road. In the United States, prescription drug non-adherence costs $100 billion to $290 billion a year due to increased hospitalizations, rehospitalizations, and premature deaths.

Benefit plans should place a high priority on improving access to and adherence to treatment plans by eliminating care backlogs, reducing out-of-pocket costs for employees, and streamlining or eliminating tedious UM process.