Open Enrollment Season

‘Tis the season!

This month at RBN we are focusing on preparing for open enrollment, benefits awareness, and year end topics including reviews and compensation. Why is this important? Because in today’s market environment where businesses are facing real cost pressures and working hard to retain their best employees, it takes extra care to strike the right balance between cost management and meeting employee expectations.

Health insurance premiums have increased from 2022 to 2023, partly driven by broader inflation and also influenced by the catch-up of procedures and healthcare utilization that had been deferred during 2020 and 2021 due to COVID. Hospitals and other providers continue to negotiate for higher reimbursement rates, which will likely extend rate increases into 2024.

Employer challenges & responses:

Insurers are again shifting costs to employers and members through higher premiums and higher out-of-pocket costs. With the labor market still tight, most employers are choosing to absorb most of the cost increase rather than passing it through in the form of higher employee contributions.

The impact of these increases can be manageable if you use the right mix of strategies when evaluating your plan.

What should employers do in response to this challenge?

Focus on restructuring plan designs to encourage employees to use more cost-effective networks and services. For instance, for employers that do not currently offer high deductible plans paired with a Health Savings Account (HSA) or Health Reimbursement Arrangement (HRA), this could be a good time to evaluate those options. You can pair this with strategies to educate your employees on lower-cost options that might be available to them (e.g., telemedicine).

Here are a few examples of approaches employers can take:

Buy-up structure: Base plan covered at 100% alongside richer benefit plans and employee buy up options.

Level funding: Plans that look and feel like fully insured programs but carry some of the advantages of self-funding and are available to groups below typical self-funding size thresholds.

Health savings account (HSA): Coupling a high deductible health plan with lower premiums and an employer contribution to an HSA account.

Health Reimbursement Arrangement: Employer reimbursement of healthcare costs once an employee has reached a specified out of pocket spend – differs from HSA as employer reimburses actual employee expenditures and is not required to make a blanket contribution.

Point of service plans: Benefit tiers vary by network / provider quality designations with lower deductibles, co-pays, and out of pocket maximums.

Emphasize telemedicine: Diagnosis and treatment without an in person visit for $0 or reduced copay.

Virtual solutions for Urgent care: More immediate care at the cost an office visit copay in lieu of higher urgent care or emergency room copays.

Association plans: Certain industry trade groups partner with health insurers to offer advantageous pricing and plan structures for small and mid-sized member organizations.

RBN recommends re-evaluating your plan annually.

Have questions about what the right plan is for you? Our experts are here to help you make the right decision for your organization.

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