Healthcare Benefit Costs Expected to Rise in 2020: What Can Employers Do About It?

It may seem like every day there is news of healthcare costs rising. And last month was no different. A new survey conducted by the National Business Group on Health found that healthcare costs are expected to raise up to 5% in 2020⁠—averaging $15,000 per employee. 

Some companies are turning to unique alternatives to bring the cost of healthcare down, including preventative approaches. As an employer, check out our list below to see your options for containing healthcare costs for 2020 and beyond.

1. Pass Drug Price Discounts to Workers

In the same survey conducted by the National Business Group on Health, over 20% of large employers said they will move away from traditional pharmacy benefit contracts that rely on drug rebates. Last year, the majority of large employers reportedly lost faith in these rebates as an effective way to lower prescription drug costs. In 2020, large employers will partner with insurance companies who pass these drug discounts down to their employees—a move that could lower prescription costs for workers who are on high deductible plans. 

2. Cover Telemedicine

Telemedicine allows employees to “go to the doctor” virtually–through video conferencing. The benefits of telemedicine have yet to be fully researched, but it has the potential to improve access to care and lower healthcare costs. In the 2018 Employer Health Benefit Survey, the number of large employers who offer plans that cover telemedicine increased from 27% in 2015 to 74% in 2018. However, the same study found that few employees actually use the virtual service. Which is why some companies have implemented a rewards program to incentivize employees to use telemedicine instead of visiting a doctor in person. 

3. Focus on Preventative Care

Happy, health-conscious employees are a great way to reduce high healthcare costs later on. While it requires some upfront investment, cultivating an environment where employees are encouraged to live a healthy lifestyle will pay off in the long run. Consider implementing a general wellness program that incorporates mental health days, subsidized gym memberships and rewards those who quit smoking. In fact, one study found that companies who design wellness programs that focus on preventing & educating employees about the risks of chronic disease may experience higher returns on investment. However, employee engagement is everything when it comes to the success of these programs. Consider gathering employees’ input about their top health concerns before implementing.

4. Switch Your Broker

Almost all major health plans are purchased  through a broker. The healthcare industry has seen incredible changes over the last 5 years and with that, new and innovative technologies have entered the landscape. It’s important to ask yourself: is your broker staying on top of the software and the latest trends? Is he/she coming to you with alternative ways to save money on your healthcare costs? A good broker should bring fresh ideas to the table. 

At DC Benefits Consulting, we take a unique approach to healthcare. Our alternative solution allows you to save money on healthcare costs, without impacting your rich benefit plans that are essential to attracting and retaining your employees. Request a free consultation to learn more.