Health care costs are a growing concern amongst small and large business owners throughout America. The cost of medicine in the United States is out of control, with the average CT Scan or MRI costing thousands of dollars. Simple and complex treatments, office visits, and procedures are costing employers millions of dollars while decreasing the profitability of their organizations. Because of the rising health care costs, employers are forced to reduce bonuses, reduce spending, and sometimes layoff employees, which increases stress.Employers can manage health care costs in a society that is preparing for major health care renovation by monitoring the eligibility of spouses and dependents, investigating and reporting all claims, switching to different policies, encouraging spousal health insurance, reducing workers compensation payouts, and developing a legal team to handle litigation and settlement issues.Utilizing competitive business strategies that monitor expenses closely can control health insurance costs. In 2007 the average employer paid $12,106 in health care costs, with the employee picking up $3,281 of the bill. Health care costs continue to rise, causing employers financial distress.Conduct Family Eligibility AuditsAn employee’s family is one of the largest health care expenses businesses deal with, as children and spouses become ill over the course of their policy. It is commonplace for businesses to spend millions on an employee’s dependent or spouse. Companies can reduce the amount of money spent on spouses and dependents by actively investigating all non-employee claims.In most policies a dependent is defined as someone under 18 or who is a full time student below a certain age. The new Obamacare insurance reform requires employers to pay for dependents under 26; however, many current policies set the age at 23 or 24.Employers can minimize health care costs by ensuring any person over 18 is a full time non-exempt student. Employers can encourage employees to set their dependents up with school-sponsored insurance, which reduces the employers overall cost. Additionally, employers can alter the policies to remove unrestrictive verbiage from the documents, such as policies that do not require older dependents to be in school. Verification of a dependent’s status can be obtained from leading national clearinghouses and verification services at a fraction of the price of their health plan.There are other health insurance loopholes employers can leverage, such as retiree benefits for dependents as well as dental and vision services. Limit the scope of retiree health plans by removing dependent coverage, only providing medical services to the employee’s spouse. Additionally, consider modifying vision and dental coverage for dependents by limiting it to essential and preventative services.Deductibles and Out of Pocket ExpensesEmployers can significantly reduce the amount of money they spend on an employee’s health insurance plan by utilizing plans with high deductibles, which ensure that their workers are protected in case of major illness or injury. Additionally, deductibles place most of the annual expenses on the employee, with the employer serving as backup in case of life threatening illness, expensive operations, and other expensive procedures, such as CT Scans or MRIs.High deductible plans are ideal for small and large businesses that want to minimize health care costs and risks associated with high premium traditional plans. Employees are made aware of their high deductibles and take a proactive approach to their health, avoiding expensive hospitalizations for otherwise preventable diseases, such as diabetes.When employees are aware of the true cost of health care, their overall demeanor towards a healthy lifestyle improves. They also are more appreciative of the services and benefits their current employer offers.Minimize Health Care Costs by Splitting or Switching PlansEncourage employees to utilize their spouse’s employer paid health insurance package if it is available. The strategy can be marketed as providing them with the maximum coverage, pointing out how their spouses program is a viable alternative. Educate employees on the open enrollment procedure, fostering communication within their family regarding the topic.Employees can save up to $5,000 by switching to their spouse’s insurance, especially if the employee was on a high deductible policy. Another option is to encourage employees to split their dependent’s coverage amongst both of the health plans, minimizing financial risk to your business.It is illegal to demand that employees switch to their spouse’s plan or remove dependents from their policy. Incentive programs are unethical but may drive lower health care costs in your organization. Use this method as a last resort, as some employees may take action against the company. Insurance commissioners frown upon the incentive or spousal switching program, thus it is best to encourage the splitting of spouse and employee coverage.Start a Healthy Living ProgramThe fastest and most efficient way to decrease health care costs is by encouraging your employees and management staff to live a healthy and preventative lifestyle. Preventative care costs far less than other medical procedures, which reduces the out of pocket expenses for both the business and employee. Offer awards or incentive programs for employees who quit smoking, lose weight, stop drinking, or take a proactive approach to their health.Be careful when publicly honoring the employee in front of their coworkers, as some may be nervous or reserved, these are sensitive topics after all. Healthy living programs foster a wholesome lifestyle, in which the employee receives routine checkups and works to reduce preventable conditions, such as obesity and high cholesterol. Healthy lifestyle programs can target diet, weight loss, smoking, alcoholism, aging, and stress. Additionally, healthy employees can participate by continuing to exercise on a routine basis and reducing their stress levels.
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