HR Answers: Is healthcare keeping you from making critical investments?

As credit unions search for cash to fuel important initiatives like recruiting talent, boosting salaries and investing in new technology, larger organizations may find an unlikely source: their own spending on employee healthcare.

According to the latest data from the Kaiser Family Foundation, the norm is for employers to spend almost $7,000 for single coverage and $20,000 for family coverage annually per employee. However, there are creative ways for employers to spend significantly less—while improving the quality of care their employees receive.

This starts with taking a look at your organization’s annual healthcare spend, then asking your benefits advisor why costs have gone up and if the advisory firm receives commissions from any insurance carriers. If they do—and especially if they aren’t willing to disclose those commissions—it might be time to find an advisor who puts your best interests first.

Once that happens, forward-thinking organizations might eliminate their fully insured plan and instead use the money to cover employees’ medical expenses on their own, an approach called self-funding. From a risk management perspective, this approach is most appropriate for organizations with more than 150 to 200 employees. In the absence of insurance carrier resistance, self-funded employers can craft a health plan that works best for them rather than being a small part of a health insurance carrier’s overall book of business. And, with the guidance of a skilled consulting team, transitioning to self-funded insurance is not a difficult nor disruptive process for employees and their families.

 

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