Employee Healthcare Costs
– Forecasting for 2018
As employers across America look ahead to 2018 budgets, experts predict the keys to successfully maintaining a healthy bottom line will be controlling actual service costs while also reducing medical risks.
According to projections from PwC Health Research Institute (HRI), medical costs in the 2018 employer insurance market will grow at a slightly faster rate than 2017. HRI’s latest edition of “Behind the Numbers” lists price of services and rates of utilization as the leading factors affecting 2018’s projected 6.5% medical-cost trend.
“In a competitive labor market, employers are looking for new cost containment strategies beyond shifting more costs to employees,” according to HRI’s report, which also recommends employers take action by considering customized worksite-health-promotion programs, drug-spending evaluations, and a stronger focus to “tackle price” on provider arrangements.
An increasing number of employers are now choosing self-funded health plans as a first step in combating costs. Self-funded employers pay medical costs for services without paying insurance premiums to carriers each year. Notably, most self-funded plans will require reinsurance or a separate stop-loss policy for catastrophic events in order to financially manage long-term risks or losses.
Benefits experts can help organizations easily transition to self-funded programs. Once self-funded, employers are positioned to mitigate risks and lower expenses through the customization of healthcare programs for employees, retirees, and their dependents.
“Shifting to self-funded plans and focusing on preventative care are two ways budget-minded employers in today’s market are achieving the greatest return from healthcare investments,” said Ray Tomlinson, president of Crowne Consulting Group, a benefits-planning firm specializing in self-funding and the operation of over 30 onsite and near-site employee health centers.
Employers are launching onsite health and wellness centers for plan members to combat rising healthcare costs. Onsite healthcare specifically attracts self-funded groups because medical visit costs are paid directly by the employer without claims being filed through the more expensive fee-for-services model typically conducted by Group health insurance programs. With an onsite-care model, however, the employer controls spending by paying significantly lower costs.
“Self-funded employers can substantially cut costs through customized risk management and on-site care programs, while patients reap the benefits of no out-of-pocket costs and easily accessible primary care, disease management, screenings, x-rays, wellness, and prescriptions,” said Tomlinson.
Crowne Consulting Group’s clients have included school districts, cities, counties, sheriff’s offices, and private organizations. Contact Crowne or call 407.654.5414 for information and employer solutions.
Healthy, hard-working teachers play an important role in the education of our children, which is why access to quality care and health education for our teachers is critical to inspiring learning in the classroom.
“…Regardless of the number of employees affected, the ACA has created numerous challenges for Human Resources departments – especially those with constrained budgets. Ray Tomlinson, president of Crowne Consulting Group, an organization helping business and governments set up health clinics, says in this way, local governments are no different than their private sector counterparts. “[Because of the ACA,] employers are experiencing additional oversight, restrictions and costs,” he says. From a local government standpoint, there is now less management discretion at designing benefits packages that would help keep costs low, Tomlinson says.
Healthcare expenses are ballooning nationwide, but forward-thinking school districts have taken matters into their own hands to push down costs. Districts across Florida are finding value in providing primary-care services for employees at or near the worksite. Employees visiting onsite health and wellness centers enjoy increased access to low-cost preventative care, which is helping employers to lower average healthcare costs.
With the various provisions in the Affordable Care Act and opt-out-only requirements for employee health coverage, it’s clear that Healthcare Reform will push many smaller employers to opt for self-funding.