Employers today face the dual challenge of astronomical insurance premium increases and America’s unwavering mental health crisis.
Due to rising healthcare costs over the past few years, many organizations have absorbed some of the additional costs to avoid price increases for their participants. Additionally, employers who have invested in powerful mental health products are still seeing employee burnout, stress and absenteeism.
Employers must constantly reconcile the priorities of competing benefit plans. However, in the next year two of the top priorities for nearly all employers will be strengthening mental health programs while keeping benefits affordable.
Challenge: Astronomical Increase in Cost
The cost increases that employers can expect over the next year are astronomical and unpredictable. While benefits consultants are doing their best to accurately predict employer budgets for 2023, some employers are facing price increases of up to 40%. Inflation has made costs more difficult for healthcare providers to predict, and that unpredictability has also impacted the budgets of insurers and employers.
As a result, employers struggle to maintain the robust benefits programs they need to attract and retain top talent.
The Solution: Consider Alternative Financing
Employers looking to do more with less are adopting Health Reimbursement Schemes (HRAs) and alternative financing models. Self-funding continues to grow in popularity, even for organizations that might have never considered it before due to size and cash flow considerations. In 2020, nearly 60% of his employers with 200-1,000 plan participants were self-financing.
Alternative financing arrangements, such as captive models and HRAs, work well for smaller employers. This allows participants to have more flexibility in their healthcare choices and minimize the impact of devastating billing on employers.
Strategic use of HRA or HRA-style vendors can help reduce renewal sprawl. One of the strategies we used was to increase group health insurance deductibles to lower premium costs. The employer then funds her HRA to offset the increase in deductibles for the participant. This arrangement reduces employer premiums while avoiding impacts on participants.
The Individual Insurance Medical Reimbursement Scheme (ICHRA) is another innovative option for organizations that employ hourly, part-time, or seasonal workers. ICHRA, like her other HRAs, provides employees with more freedom and flexibility while stabilizing costs for employers and funding employee compensation otherwise unfeasible. make it possible.
The Challenge: America’s Mental Health Crisis
Mental health benefits remain a top priority for employees and, therefore, for employers as well. Through claims analysis and benchmarking, we’ve seen an increase in mental health care usage, including provider visits and prescriptions.
These increases show that some people are getting help, but the mental health crisis has not abated. I am facing provider availability issue. Employers across industries are beginning to realize that their employees are still not taking advantage of mental health benefits.
However, mental health support offers a competitive recruitment advantage. Eighty-one percent of his workers say their employer’s support for mental health will be an important factor in their new job decisions.
The Solution: Prioritize Employee Mental Health
Some employers are looking at new ways to provide their employees with mental health and stress management resources outside of employee assistance programs (EAPs), which participants typically underutilize. Some are considering paying for mindfulness apps or lifestyle and wellness subscriptions.
Read more: Two-thirds of employers plan to make mental health a top concern, survey reveals
Other employers are investing in mental health HRAs and health savings accounts (HSAs) to fund the resources their employees need. The advantage of these spending accounts is that participants can connect to any network provider. With the current shortage of mental health providers in the country, the ability to be flexible and connect with providers regardless of coverage can be a great motivator for employees.
seek professional advice
Even if your organization is facing financial impacts such as price increases and employee burnout, benefits consultants can help create a plan that will help you weather the storm. Talk to your consultant about third-party vendor solutions and alternative financing models. It helps you control costs and provide your employees with the resources they need to stay happy and engaged year after year.
Rachel Trembley, Senior Account Manager, Corporate Synergy
