So, what is a health care benefits strategy?
A health care benefits strategy is a plan that helps your business contain the costs of health insurance, increase employee satisfaction, and maximize the efficiencies of your health plan.
Many employers are looking for ways to contain health care costs. With the average cost of insuring an employee hovering around $14,000 a year1, health benefits represent one of the most significant overhead line items facing employers. But while many businesses are putting an increased emphasis on cost reduction, many simply may not know how to consistently reduce costs, year-after-year, without impacting outcomes and the satisfaction of their employees. Many times, short-term discounts are appealing, but they may not reduce the Medical Cost Trend in the long term.
That’s why creating a health care benefits strategy is critical.
A holistic health care benefits strategy attempts to find the best balance of cost and care for your business. An effective strategy should also focus on improving employee productivity, attitude, and overall job satisfaction.
This guide will walk you through what you need to create a health care strategy and give you the guidance you need to execute it.
Health care benefits strategy at a glance
The 5 essential steps:
- Define objectives and goals
- Assess the population
- Establish a performance benchmark
- Create an engagement plan
- Define a measurement plan
Long-term building blocks:
- Year 1: Biometric assessment
- Year 2: Increase participation
- Year 3: Expansion to family
Step 1: Define objectives and goals
Like any other part of your organization, a health care benefits strategy’s primary purpose is to impact the bottom line. A major challenge to effectively implementing a health care benefits strategy is getting commitment from your organization, starting at the top. The leaders and key decision makers in your company need to be active and vocal supporters of the plan in order for it to work.
How do you get the organization to buy in? By setting simple, achievable goals that show how the health care strategy will help the business. Every business is different, but these goals are common across industries and should provide a good place to start.
Set health-specific objectives that will help you reach your business goals
The goals for your health care strategy should focus on measurable, health-specific factors that ladder up to your business goals. It’s critical to take a holistic approach and consider the different variables that will ultimately add up to a successful plan.
Ask yourself a few key questions:
- Do you want to improve overall employee health?
- Do you want to use health benefits as a recruitment or retention advantage?
- Do you want to address a specific benefits challenge?
Common business goals for HR department:
- Reduce benefits expense
- More effectively forecast overhead costs
- Successfully recruit experienced senior leadership positions and attract key talent
- Increase talent retention and employee satisfaction
- Improve productivity and the health and well-being of employees
These 3 goal categories will help you set goals that address both the symptom and the source of the challenges your organization may face from a benefits perspective.
Improving employee healthy lifestyle choices, health outcomes, and associated costs.
Inspiring employees to participate in preventive programs and take control of their health.
Reducing health risks and associated costs in your employee population.
Step 2: Assess the population
It’s important to have a firm understanding of the needs, usage, and risks of your employee population when it comes to creating an actionable health care strategy. This phase of the strategy development is all about gathering the right data. There are a number of ways to gather this information, but one of the best starting points is to have your employees fill out a Health Risk Assessment, to gain more insight into your population’s health and lifestyle.
Key data points
These are the data points to focus on that will help provide the best representation of the needs of your population.
General Health Status
Are most employees generally healthy and live active lifestyles? Does your population have a high number of chronic conditions?
Attitudes Toward Health
How do your employees feel about healthful decisions like regular preventive care or healthy eating?
Health Care Utilization
How is your population utilizing their current health plan? How often do employees fill prescriptions or receive treatment? Are there any trends in claims?
What is the average age of your employees? Are there concentrations in particular generations? Do many employees have children?
Are there any indications of prevalent chronic conditions, like high blood pressure or high cholesterol?
Click here to download Cigna’s tips for conducting an Employee Benefits Satisfaction Survey.
Click here to download Cigna’s all-in-1 template to track and organize your assessment.
Why you should host a worksite biometric screening
A biometric screening is a quick test that identifies risk for heart disease, stroke, diabetes, and these key health metrics:
- Blood pressure
- Total cholesterol
- Body mass index
- TC/HDL ratio
- Glucose (blood sugar)
Step 3: Establish a performance benchmark
Benchmarks help you understand what normal is for your industry. Obviously every business is different, but as a general baseline, benchmarks can help you set smarter, more achievable goals. The benchmarks listed in the next section are designed to help you get started, but remember that the metrics for your goals may be slightly different, depending on what you’re trying to achieve.
Common Benefits Strategy Benchmarks
- Cost per member per year
- Preventive care utilization
- Chronic condition prevalence
- Health engagement
- Out-of-network utilization
- Claims analysis
- Specialty pharmacy usage
Key Health Care Benchmarks by Industry
|Industry||Spend Per member Per Year||Health Maintenance & Health Improvement Engagement||Chronic Condition Prevalence|
|Oil and Gas||$4,543||38.1%||32.2%|
|Retails Food and Drink||$4,586||24.3%||38.6%|
Step 4: Create an engagement plan
This is where the rubber meets the road. It’s important to work with your broker or insurance carrier to turn your strategy into an operational plan with specific programs and initiatives that are designed to help you reach your goals.
For example, if you have an employee population with a high rate of diabetes, it’s important to get them involved in specific health improvement plans.
Or, if you have issues with out-of-network spend, it could be a reason to find a network or plan design that better suits your needs.
Remember, employee engagement is one of the biggest challenges to implementing an effective health care strategy successfully. Emphasize the importance of preventive care, including annual checkups and access to health programs. Be proactive to reinforce your organization’s commitment to the health and wellness of its employees.
How your carrier can help
Care management: Outreach programs to identify and engage individuals with potentially dangerous risk combinations to help lower the overall risk of your population.
Wellness initiatives: Discounts on health and wellness products3, one-on-one coaching and support, and personalized health plans for employees.
Chronic care: High-level, individual attention to employees with chronic conditions such as diabetes, asthma, depression, back pain, cardiac, and oncology conditions.
Health risk management: Support for at-risk individuals, incentive programs to help you motivate behavior change, and the ability to measure progress.
“A health care benefits strategy needs to be set up for success. An organization needs commitment from the benefits manager and senior leadership to reinforce the strategy, and partners to support them along the way.”
Step 5: Define a measurement plan
Just like any other part of your organization, it’s important that your health care strategy is able to prove that it’s working. Ultimately, the ROI of your strategy is based on whether you experience lower health care costs. However, each phase of your plan should be measured with a key metric for success. Make sure that each stage of your plan is measurable and actionable to reveal short and long-term opportunities for optimizing engagement.
Remember to measure regularly. It’s easy to fall into the trap of only reviewing health care performance reports during renewal season, but regular pulse checks are critical to maintaining an effective strategy. Monthly and quarterly reports are key to ensure you’re still tracking for success. If you are, great. If you’re missing the mark, stop, assess, and reset.
Here are a few sample goals and metrics:
|Example Goal||Example Metric|
Assess health of population
Percentage of employees who complete a biometric screening
Increase preventive care
Percentage of employees who had an annual physicial
Educate employees on the plan
Percentage of employees connected to myCigna™
Reduce risk of high risk employees
Percentage of employees enrolled in clinical coaching programs
Ask your employees what they think
Assessing employee satisfaction with health care benefits is a must. Surveys can be easily sent out via email and should be straightforward and easy to understand. The questions should be targeted and ask about specific aspects of the benefits plan. For example, are you satisfied with the number of plans available? Are you satisfied with the access to doctors and hospitals in the network? Your carrier should be able to assist you in developing and administering the survey.
To help improve the success of your health benefits programs, major shifts or changes should be clearly communicated to the broader employee population—typically from your CEO or higher-ranking management. Reinforce and repeat at the organizational level. If employees aren’t communicated to or incentivized, they likely won’t participate. Plain and simple.
To download Cigna’s guide to conducting an employee survey, click here:
You’re on the fast track to a better, more effective health care strategy!
You’re set for success. You now understand the value of actively managing your health care benefits strategy. With these tools, you can begin implementing it today.
Remember, your carrier should be your partner in this journey and provide support and guidance every step of the way.
1 Employers to Spend about $10,000 on Health Care for Each Worker.” O’Brien, Sarah, CNBC, August 9, 2017. https://www.cnbc.com/2017/08/09/employers-to-spend-about-10000-on-health-care-for-each-worker.html
2Analysis included all clients within the given industry in Cigna’s book of business across all segments and client sizes for 2016 benefit plans.
3A discount program is NOT insurance, and the member must pay the entire discounted charge. If your plan includes coverage for any of these products, this program is in addition to, not instead of your plan benefits. Discount programs are separate from your medical benefits. Some programs are not available in all states and programs may be discontinued at any time.
Product availability may vary by location and plan type and is subject to change. All group health insurance policies and health benefit plans contain exclusions and limitations. For costs and details of coverage, contact a Cigna representative.
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