There’s no doubt, COVID has impacted every aspect of life, even benefit renewals. The challenge facing renewals? Everyone’s program is different. In this post, we’ll explore what we are seeing clients do to make the most of their benefits plans.
There is a push to control costs rather than shift costs. Make sure to review vendor contracts to see how every dollar is being used. Review them to focus on out-of-network benefits and network charges specifically. A full pharmacy audit is also highly recommended so that pharmacy pricing and rebates are clear. There are often great savings to be seen after going line by line through the contracts. In addition, there are innovative approaches to help reduce costs further, including pre- and post-procedure audits, international pharmacy options, and grant money that can be used to help cover specialty pharmacy expenses. We are seeing pharmacy savings from 12%-30% and medical reductions due to pre and post audits on large claims by 8%.
Rather than making drastic changes to plan design, we are seeing limited changes to current plans. There are small changes being made like co-pays or slight increases to out-of-pocket maximums.
The plan of the future is here, and it looks different. We are even seeing savings in some areas of the country with a “tier” design:
- (NEW) Tier 1 (best benefit) includes primary care, risk management medication, and high performing facilities.
- Tiers 2 (typical in-network benefit) and
- Tier 3 (typical out-of-network benefit)
With the added “Tier 1” to plan design, employees have access to the best of the best care, improving their quality of life, and saving money.
Additionally, there is more concentration on insureds who are at a higher risk and ensuring they are managing their condition, particularly during COVID. It is critical to give them more access to care so that they can maintain/improve their health. We are also seeing some chronic condition pharmacy costs decrease by 60-80% by purchasing medications from alternate sources. For those at a higher risk, companies are trying to provide many different and new options for them to reach their optimal health.
Payroll Deduction Strategy
The pandemic has created a financial anomaly that requires us to account for and adjust for changes to our client’s costs, which are not easily predicted. The Gallagher underwriting team has been working extremely hard to help clients estimate costs and accurately forecast for budgeting. We are seeing small increases (avg.5%).
How to Communicate in the New Virtual World
Engaging and communicating with employees was difficult before the pandemic; increased remote working has increased the difficulty, and now, creativity in communication is critical. Having a multigenerational workforce also adds difficultly as not everyone prefers the same communication methods. Companies need to have multiple modes of communication, including texting, email, and phone calls. In fact, we’ve seen very creative onboarding, open enrollment, and wellbeing strategies that go above and beyond expectations to reach employees, which aides in employee engagement. Virtual working has taught us that we must reshape our past practices to succeed in communicating in the future.
Think differently! Be bold to ask for more offerings in your plan contracts and demand that your partners help you get the best for your money. Look for new ways to drive success through plan design itself instead of just having your participants “pay more.” Build a new strategy with your team-one that includes all aspects of safety and health and, above all, communicate effectively to ensure employee understanding.
Post Author: Rick Gantt, Gallagher