What is the #1 way you can improve your employee’s medical benefits? By offering what your employees want, customized options and benefits that add value to their specific situation. Your employees want benefits that meet their healthcare needs and those of their family. Benefits that are not complicated to use and that improve health care outcomes. They do not want to pay more for those benefits than what they deem is reasonable.
There is no question that if you want to stay competitive as a manufacturer and attract the type of skilled and unskilled workers you need to provide a customized medical benefits package. This does not mean the most expensive plan or one that shifts the cost burden to your employees, but one that provides better benefits for less money, tailored specifically for your employees.
You are in the fight of your life as a manufacturer. You see profits declining in the face of regional, national, and global competition. You fight to attract quality employees from the same pool of workers as your competitors. In order to stand out from the competition, you need to improve your medical benefits and fight off the year over year (YoY) medical plan cost increases that threaten your bottom line. All while still providing value for your employees in order to retain your vital workforce. Let’s discuss further why customizing your employee medical benefits is important to your employees.
Shifting Costs Does Not Improve Benefits
Mercer, a large HR consultancy group, found in a recent survey that employer-sponsored health insurance plans rose by 4.3% in 2018, the highest increase since 2011. The cost was projected to be 6% if employers took no action to abate this increase. The smaller percentage was based on 46% of the employers surveyed reporting that they planned to shift rising costs to their employees by offering a lower-cost high-deductible health plan (HDHP).
The thought behind moving toward HDHPs is to lower premium costs and empower employees to take control of their health care spending. This theoretically helps them make better health care decisions, reduce costs, improve outcomes, and create a healthier, more productive workforce. Shifting costs to your employees would seem, therefore, like a no-brainer decision for any manufacturer looking to improve their medical benefits budget.
Unfortunately, what you experience through this method of cost control is a lower utilization of the medical plan by employees (e.g. doctor’s office visits, preventative care measures, etc.) designed to identify acute conditions and a higher distribution of your health care dollars going towards the treatment of chronic disease (e.g. cancer, diabetes, hepatitis-C) and specialty drugs used to treat these conditions.
Paying More Does Not Mean Getting More
YoY double digit increases to the cost of medical benefits has come to be accepted as the norm. Factoring in double digit cost increases each year, reducing benefits or shifting the cost burden to employees to meet budgetary goals, has attributed to the higher cost of health care for your business. Even though your medical benefits cost more every year, your employees do not see an increase in the value relative to their lives.
Your insurance broker and insurance carrier make decisions on how much you pay in line with Federally mandated requirements to return a certain percentage of premium dollars spent on actual health care services and raise their prices accordingly to meet their profit needs. The result is you pay more for essentially the same level of benefits (or potentially lesser benefits) you have been receiving in the past. You need an insurance broker who ensures your benefits plan adds value and can be tailored to fit your ever-changing workforce. Manufacturers can’t afford the traditional way of doing business and continually accepting annual increases that are too broad and general.
What Do Employees Want From Their Benefits?
You must demand as a benefit consumer greater cost transparency from your insurance broker and insurance provider before you sign on the dotted line and accept arbitrary increases in costs. That is job number one. You must also seek to work with an insurance broker, who as a partner, is willing to roll up their sleeves and impart true value for your employees through customized plan design and delivery.
Your benefits are the raw material you feed into your employee supply chain to produce two valuable outcomes – employee satisfaction and productivity. If your broker lacks the capacity (or desire) to engage your employees and help them create a plan that fits their needs and lifestyle, fire them immediately and go to someone who not only understands this critical business need but who is also vested in helping you achieve better results.
For more on how your manufacturing firm can compete for qualified and skilled workers in a tight labor market, download your free copy of DCW Group’s Ebook, Attract Top Talent & Retain Existing Staff: 10 Effective Methods Premier Manufacturers are Adopting.