As health care costs continue to soar, an increasing number of businesses are foregoing traditional plan designs in favor of alternative solutions that can help them control health care spending over the short and long haul.

A recent report released by Watson Wyatt Worldwide found that for 2006, many businesses plan on changing their current health plan offerings in one of five ways:

• Increased Usage of Coinsurance and Deductibles
  More employers will add first-dollar cost sharing to their employee benefits plans. Instead of paying the usual $15-$25 co-payments for doctor and hospital visits, employees will now be responsible for paying medical expenses up to a specified deductible level. Once the employee reaches the deductible, the employer will reimburse the employee for a certain percentage - generally 80% - of their medical costs.
• •Redesigned Cost Arrangements for Prescription Drug Benefit Plans
  Employers will replace traditional plans that use co-payments for generic and brand-name drugs with those that require co-insurance and deductibles in order to shift more of the plan costs to participants. Employers are encouraging the use of available generic drugs, which cost less than name-brand prescriptions, by providing better coinsurance provisions for them.
• High-Deductible/Personal Health Care Accounts
  To lower premium costs for themselves and their employees, an increasing number of employers will add high-deductible health plans (HDHPs) as an option to their current benefit portfolio. Employers will tie HDHPs to personal health care savings accounts, such as Health Savings Accounts (HSAs) and Health Reimbursement Accounts (HRAs) in order to help employees meet the high deductible and pay for other out-of-pocket medical costs (scroll up for related article, WAGING THE WAR ON RISING HEALTH CARE).
• Health-Risk Assessments and Wellness Programs Tied to Financial Incentives
  Many employers will offer financial incentives to employees who complete on-site health risk assessments and participate in company-sponsored wellness programs. The incentives will be used to encourage and reward employees who adopt healthy lifestyles and take proactive steps towards managing/preventing chronic illnesses in an effort to help employers slow chronic claims activity and reduce long-term premium costs.
• Improved Access to Online Decision-Making Tools
  Employers and insurance providers will provide employees with online tools that can help them make informed decisions about their health care. These tools can help employees figure out the dollar impact of their various health plan options, check the status of claims, create personal health records, and research specific diseases and wellness topics to choose the most appropriate course of treatment or prevention.

"Viable health care solutions that help employers and employees gain control of rising health care costs do exist," notes Denise Angleman, senior vice president of the Employee Benefits Division at The NIA Group. "However, it is often difficult for both parties to navigate the complex and rapidly changing landscape of employee benefits on their own. Working with an experienced employee benefits broker who can explain the options available is key to customizing a plan that is right for them."

For more information on any of the employee benefits options presented above, contact your NIA Employee Benefits Specialist or Denise Angleman at 201.845.6600, Ext. 1259 or dangleman@niagroup.com.