October is here – the month that celebrates homecoming games, carving pumpkins, and trick or treating. For HR professionals everywhere, it is also the month that brings benefits elections, and projections for 2012 in terms of recruiting, healthcare costs, compensation, and other expenses that leave you and your budget barely breathing from the belt.
The doom-and-gloom messages being plastered across the web, TV, and various print communications have all been forecasting the upward trends in costs for healthcare benefits for both employer and employee, as well as the low to non-existent increases in compensation. At more than twice the rate of inflation, increases in healthcare costs will be a force to be reckoned with in 2012, as well as one to be transparently communicated to employees. While this increase is down from 2011 by about .5%1, it will still hit the pocketbooks of everyone on your payroll, and that is something that will need to be addressed by you, the employee advocate, sooner rather than later, as employees will need to prepare themselves. And, as far as communication goes, you will also need to be prepared to address your executive level staff on what your department is prepared to do to battle back against these costs, and how you will be aligning your policies in light of the health care reform act. By putting a rigorous focus on a few of the options listed below (and others not listed), you will be better able to cut costs for your organization, your employees, delay hitting the cost ceiling of the "Cadillac" excise tax, and comply with the reform law's early requirements, giving you much-needed time to strategically plan for the future.
Options for those organizations who want to fight back are increasing usage rates of their CDHPs through various means, including: a grandfather program where new employees only have CDHPs to choose from, but tenured employees are grandfathered into the other benefit options for a certain period of time; eliminating their HMO options completely, as the cost trends are continuing to outpace PPO and POS plans by a significant amount; and incentives for those who sign up for the CDHPs. Other options include aggressively pushing health and wellness programs, which can vary widely depending upon your employee base. On-site fitness facilities, discounted fitness classes, smoking-secession programs, weight-loss programs such as “the biggest loser”, “Weight-Watchers at Work”, or a call-in line with nurses and nutrition coaching available are all valuable options for those organizations looking to implement more compelling strategies to incent participants to understand, and manage, their health.
The last option is for business leaders (this means you HR partners!) to aggressively drive down costs. This is beginning to be known as the “health care cost crisis”, and similar to the national debt crisis, if it goes unnoticed and unstopped, it will undermine our ability as businesses to create jobs, and therefore undermine the economy and its attempt at pulling out of the recession. Without the ability to create the necessary job growth, we will be unsuccessful at holding onto our global competitiveness, and our employees will not be able to sustain their current standard of living, snowballing into a situation of insolvency.
So what does this mean for you? As this blog is dedicated toward making small, timely changes to make your HR department better, faster, and smarter for your employees, I’ll quickly recap for you what you can do this month regarding health benefits, in the spirit of benefits election season:
- Communicate to your employees as transparently as possible the costs and cost projections for future health care costs (premiums, deductions, out-of-pocket maximums, etc.)
§ Don’t sugar-coat this – employees will only feel worse, or tricked, or like the company is profiting if you aren’t showing them the numbers in plain sight.
- Make a strong case for whatever counter-measure your organization is using to battle these costs
- Highlight that it is the employee’s responsibility for their health, and thus their healthcare costs – and to help them, you’re organization is you’re organization is going various activities and incentives from a health, wellness, and safety perspective
§ Open the floor to ideas! If your employees want to put together a walking group, a stress-management group, etc., be open to it and try to put some movement behind it.
- Use benefit-enrollment meetings as a platform to boost morale and talk up what your company has to provide to your employees. Make sure your employees know exactly what you offer them in their benefit packages, and why it’s valuable; focus on their needs and provide meaningful examples.
