New dawn for employer health plan management opens new door for HR pros – BenefitsPro
Today’s HR professionals, or those eyeing a career in HR, should familiarize themselves with the new landscape to prepare to provide their leadership with innovative, proactive health plan ideas. (Image: Shutterstock)
The employer-sponsored health insurance marketplace is undergoing a radical transformation fueled by the rise of digital health technologies. At the same time, the Great Resignation has spurred a heated competition for talent, pressuring employers to lower health care costs while also providing superb benefits packages to employees.
A Kaiser Family Foundation survey found employers increasingly turn to self-funded health plans as a strategic way to substantially lower costs while improving a health plan’s offerings. In fact, self-funded insurance plans now cover 64% of all insured workers.
Emerging digital health tools and platforms allow small and medium-sized employers to customize their self-insured health plans for a variety of workforces with specific needs and desires. The new technologies offer an alternative to one-size-fits-all health plans, which translate into lower costs and greater control over employee benefits.
Related: Infographic: Trends in self-funded group health plans
However, having control over what is and what isn’t part of a company’s workplace health plan also poses a challenge, particularly for human resource professionals who will be tasked–on top of their other duties–with creating, designing and managing plans to their employees’ satisfaction.
Before digital health technologies made it possible to customize, build and manage health plans, there wasn’t a need for HR to dive into the business of health care. Their job mainly consisted of managing employee inquiries and finding whatever ways possible to help people resolve complaints—or at least minimize them.
Additionally, most HR departments in companies with fewer than 2,000 employees don’t directly deal with the nitty-gritty of health plans at all, but instead, farm out the administrative responsibility to health care brokers. In today’s world, this is a missed opportunity for the business and the HR professional.
Historically, it has been too expensive to hire an HR team dedicated solely to handling health plans. And when a health plan is managed by a broker, it is likely out of sight and mind for employers because they don’t have the time or resources to spend on critically examining pricing and other details. But with skyrocketing health care costs and emerging digital health spaces, employers of all sizes are realizing they can’t afford not to bring more of this function in-house.
An industry rule of thumb is that only about 20% of a workforce uses a health plan in significant ways, which creates a scenario whereby only a sliver of the workforce drives the plan design for an entire company. The squeaky wheel gets the grease. It’s not an uncommon occurrence for a handful of employees to drive premiums for all employees in a workplace due to chronic health issues and expensive medications. This kind of situation can deter a significant portion of employees from renewing their health plans due to ever-increasing premiums that don’t make financial sense to them. And from there, the cycle of skyrocketing costs continues.
Today’s HR professionals, or those eyeing a career in HR, should familiarize themselves with the new landscape to prepare to provide their leadership with innovative, proactive health plan ideas. Technology has made it much simpler to design and implement company health plan programs by providing executives with the ability to dive into data around cost, quality and utilization, and iterate accordingly. Likewise, the old “broker” persona is being replaced by savvy benefits “advisors” who can bring fresh ideas to the table.
Most critically, the technology powering all of this is only getting more potent. Data platforms put information at people’s fingertips, and the back-end integration of multiple vendors on a health plan, while still fragmented today, will soon become seamless. Imagine a world in which an HR professional uses an online portal to build and tweak their health plans the same way a marketer builds and tweaks Facebook ad campaigns.
There’s something in it for the early adopters, too. Someone seeking an HR job who can say, “I saved my last company 20% year-over-year on their rising health care costs, and I can do the same for this company,” will be in high demand. And the HR professional who can seamlessly talk about business expenses, intricacies of health plans, and managing people may find a seat at the company’s leadership table.
Many companies that successfully implement cost containment strategies in their benefits share the savings with the employees–usually in the form of lowered out-of-pocket costs for health plan enrollees. But employers can also incentivize with profit-sharing agreements or stipends and tuition reimbursements to help upskill their workforces.
HR already has a seemingly limitless line of vendors knocking down their doors to try and sell them everything from diabetes management apps to prepaid credit cards to bike helmets. As is, they don’t have the power to change the health plan, so they disregard most of these offers out of hand. But once their health plans are managed on transparent and easy-to-use platforms, that can and will change. Suddenly HR professionals will have the ability to see what’s working and what’s not, and have a say in what to do next.
Cedric Kovacs-Johnson is founder & CEO of Flume Health.
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