For many companies, it's open enrollment season. That means making hard choices, particularly with continued rising health care costs for both employers and their employees.
Small businesses should take a proactive role in educating employees on their health care options if they want to pare costs and provide the best coverage, say experts.
"Employers spend a lot of money on benefits for their employees," explains Josh Senders, a principal at Pilot Employee Benefits, a consulting firm in Melville. "With costs going up so significantly, it's more important than ever that they get the most for their money and make sure employees understand the value of the investment they're making in a benefits program."
According to a recent Aflac study, 56 percent of employees are wasting up to $750 annually because of open enrollment mistakes, ranging from electing the same benefits each year to choosing the wrong level of insurance coverage. These types of mistakes could result in higher costs for employers if they're contributing to benefits selections the employee may not really need, or if they're paying for underutilized benefits, says Senders.
Ask workers what they want. Survey employees to determine what they need and want, in order to offer the right mix of benefits options, suggests Audrey Boone Tillman, executive vice president of corporate services for Aflac Inc., a Columbus, Ga.-based supplemental insurance provider.
Make sure benefits options are clear to employees, she says. Use a mix of online benefits portals, agent/broker enrollment sessions, employee newsletters and lunch-and-learn sessions to educate employees on what's available and how each plan works, says Tillman.
Consider creating a health enrollment information portal where employees can answer questions to help determine what coverage they need, says Senders. And be open with employees about increases in premiums or other changes, so they know what to expect, Tillman notes.
"Encourage people to think about their choices," says Julie A. Stone, a senior consultant in the New Jersey office of Towers Watson, an employee benefits consulting firm. "Create a culture where they're encouraged to do the research and use the health plan information."
This enrollment season, it should be simpler to make plan comparisons thanks to the new health care reform law, which requires insurers to provide a standardized Summary of Benefits and Coverage that's easy to understand, says Stone.
The new forms will also include a glossary of terms commonly used in health coverage.
Harry Krantz Co., an Edgewood electronic components distributor, tries to educate employees on its plan options.
During open enrollment the company holds a staff meeting to go over the options being offered, says Karen Randle, president of PEAR Core Solutions, Inc., a Woodbury HR management firm that works with Krantz. Plan changes go into effect Jan. 1. They also meet with new hires to discuss plan options, she notes. The company offers a high plan and a low plan, explains Krantz chief executive Jeff Krantz. The higher plan is generally somewhat richer in benefits, at a higher cost to both the employer and employee, explains Stephanie Rufa, a PEAR Core HR assistant.
Adjust to manage costs. The company, which contributes 60 percent of premiums, has made adjustments over the years to help contain costs, including raising deductibles, says Krantz, who also works with Pilot Employee Benefits.
"I put myself in their [the employees'] shoes and try to understand how we can best manage our own costs while maintaining good coverage that's going to protect their health and their families," he notes. His 40-employee company spends more than $150,000 annually on health insurance, he says. "Every year it gets more difficult."