Waging The War On Rising Health Care
Shifting Costs to Employees is a Quick-Fix, Without Adoption of Consumer Driven Health Plans

By Denise Angleman, Senior Vice President, Employee Benefits

Over the past five years, employers’ health care costs have been spiraling upward at double-digit rates. As a result, employers of all sizes are finding it difficult and financially challenging to continue to fund their health insurance plans at the same contribution and plan benefit level as they did in prior years. To maintain their benefits programs, employers are shifting more of their health care costs to employees in addition to cutting back their plan of benefits.

Unfortunately, cost shifting is a short-term solution that does not address the root of the employer’s health care problem. As health care costs continue to increase at an unsustainable pace, the costs shifted to employees get bigger with each passing year and cause financial strains to the employee.

Consumer Driven Health Care: Reducing Costs Over the Long Term
Consumer Driven Health Care is a strategic, multi-pronged solution designed to help employers manage and ultimately reduce escalating health care costs by providing employees with greater control, knowledge and choice in their health care decision-making. It is a proactive solution to reduce overall healthcare consumption as costs are shared between the employer and employee.

Who can Participate?
Companies of all sizes can participate in Consumer Driven Health Care. It is not necessarily a substitute to traditional plan offerings, but with proper planning and strategy, it can be easily integrated into an employer’s medical plan offering as a viable plan option.

What is a Consumer Driven Health Plan?
Consumer Driven Health Plans are high deductible health plans (HDHP) that are typically tied to an employee and/or employer funded health savings account. The accounts are designed to cover the employee deductibles and other out of pocket medical expenses. While employees pay a higher deductible, their premium contributions – and those of the employer – are lower. Health Savings Accounts (HSAs) are the most common type of savings accounts tied to an HDHP because they are tax-exempt and the savings account can be rolled over year after year.

Defining Success
The success of Consumer Driven Health Care in reducing health insurance costs over the long-term lies in employee-empowerment. As employees have a better understanding of their health care needs and treatment options, they will become smarter shoppers of health care. In an effort to help plan participants make better decisions, HDHP insurance providers are offering more comprehensive information on their websites, such as pricing and quality information in the following areas: pharmacy/prescription drug, physician, x-ray/lab and hospital. Insurance providers are also increasing their staffing in the Disease Management and Health Management arenas in order to better educate the healthy participant as well as to provide “coaching” to a participant that may be undergoing treatment in one of their designated “disease” groups.

Wellness and Lifestyle Management as Part of the Plan
Many employers today recognize that employee behavior is a key driver in managing claims. Employers are beginning to implement their own health and lifestyle management programs that include counseling and incentives for those employees that adopt healthy lifestyles and proactively manage chronic conditions. Insurance brokers who specialize in Consumer Driven Health Care can help employers develop, communicate and implement lifestyle management plans, monitor claims activity and analyze savings results over periods of one, three and five years.

By making health care management part of the corporate vision, employers can systematically reduce health care costs over the long-term while helping their employees make wiser health care decisions. Employers can take baby steps by offering a HDHP as part of their traditional plan mix and phasing in wellness programs as part of the bigger picture.

For more information on consumer driven health care, contact your NIA Employee Benefits Specialist or Denise Angleman at dangleman@niagroup.com or 201.845.6600, Ext. 1259.