The 5 Steps to Creating a Healthy Benefits Strategy

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:

1.  Define objectives and goals
2.  Assess the population
3.  Establish a performance benchmark
4.  Create an engagement plan
5.  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?

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?

Demographics

What is the average age of your employees? Are there concentrations in particular generations? Do many employees have children?

Population Trends

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.

Download tips [PDF]

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

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.

Get Started

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.

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:
Download survey guide [PDF]

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.
Download this white paper [PDF]