23 Jan Why you can’t afford not to offer health benefits
Originally posted January 14, 2014 by Larry Boress on http://ebn.benefitnews.com
The debate continues on the future of employer-based health benefits as employers continue to be challenged by the economy, the health care delivery system and changes resulting from the Affordable Care Act. There are some who believe this is the beginning of the end for employer-based health care benefits. I’m not one of them.
Why are employers still offering health care benefits and increasing worksite wellness activities? It’s not rocket science. Employers don’t offer benefits because they are altruistic. They do so primarily to recruit and retain talent and to ensure workers have the mental and physical capacity to perform their best on the job.
With benefits being the second highest expense after payroll, and the foreboding 2018 excise (“Cadillac“) tax on benefits above a certain dollar level, there is a great need for employers to reduce their outlay for medical expenses. Businesses are addressing this in multiple ways, including increasing programs to identify disease and health problems early in their progress and to reduce the risks for those with chronic conditions.
Employers have increased deductibles and co-pays of their health benefit programs, with close to 30% now offering only health savings accounts and health reimbursement accounts. In a new development, according the Private Exchange Evaluation Collaborative, close to half of all employers will be considering using private health insurance exchanges to offload their benefit administrative costs, while still offering benefits to their employees.
Increasingly, we also find employers are taking a deeper dive into providing direct health programs and services to their covered populations to respond to a health system that fails to offer easy access, effectively focus on prevention or management of chronic conditions and one that doesn’t incentivize individuals to take responsibility for own their health.
The nonprofit National Association of Worksite Health Centers found that close to a third of employers today make medical services available onsite so they are easily accessible to their employees. This allows them to reduce costs while minimizing lost work time due to absenteeism
The existence or even the unlikely repeal of the ACA does not change the value of offering benefits for employers. When you look at Europe, where many countries do not offer health benefits to their citizens, you still find companies offering wellness and preventive services to keep people safe, healthy and productive.
In surveys conducted by the Midwest Business Group on Health, the vast majority of employers agree that there is a link between an employee’s health and their productivity. They believe that health benefits are a necessary cost of doing business and view health benefits as an investment in human capital with measurable outcomes, not just an expense against the bottom line.
If employers are to remain attractive to new talent and retain their existing human capital, they will need to continue to offer health benefits to their workforces. But to do so, businesses must develop comprehensive, integrated strategies that reduce their costs and make employees more responsible for decisions they make about their medical care.
Many employers have already begun to move in this direction by increasing use of outcome-based incentives to motivate lifestyle choices, encouraging use of preventive care, and paying only for high quality providers and high-value, cost-effective treatments and services.
At the end of the day, dropping health care coverage is not an option, especially for employers who are focused on the health and productivity of their workforce. An employer-based system can and should continue if we recognize the value of our human capital being as important as the technology, machinery and plants that develop our products. Regardless of a company’s size, in a global marketplace, a business can’t afford to lose its most important assets – its people.