Manufacturers get healthcare benefits! The National Association of Manufacturers reports that 98% of its members provide healthcare plans for their employees. Some of the reasons why manufacturers invest heavily in providing healthcare benefits include:
- It allows them to maintain a healthy workforce, essential for productivity and growth
- It allows them to attract and retain qualified employees
- Providing healthcare coverage is simply the right thing to do
You need to offer the healthcare options which provide the most benefit to your manufacturing employees while balancing the reality of escalating healthcare costs. Manufacturers like you need to look at how you spend your healthcare dollars and make sure that what you are investing in is providing the highest value at the lowest cost.
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Get More, Pay Less
What do you need to do in order to offer robust healthcare plans in line with what you are currently investing? Simply, how can you get more for less? The answer is you must change the way you purchase healthcare benefits. You must become a better consumer, willing to demand greater cost transparency from your insurance broker and educate your employees to also be better consumers of your healthcare plan. In order to control costs it is important to understand that how you consume the benefits is equally important to what the benefit plan looks like.
Innovative approaches to your employee healthcare plans can help lower your costs. These approaches include:
- The use of counselor assisted enrollments to improve efficiencies and lower administration costs;
- Direct contracting with providers for common healthcare services, allowing you to negotiate a lower cost and achieve savings you can access and use; and,
- Risk mitigation strategies designed to reward optimal utilization of your healthcare plan.
These and other strategies help lower your costs. The cost savings can be used to add or improve existing healthcare benefits options, making your plans competitive and attractive to new talent and your existing workforce. Become a more active healthcare benefit consumer by questioning annual increases of 10%. When you know what you are paying for, you can make the changes to improve the impact of your offering and, more importantly, reduce your costs.
Following the Money
U.S. manufacturers, particularly those in the Midwest, spend 9% of their employee wage and salary dollars on healthcare benefits. You spend a lot to provide an important wage and salary component for your employees. What you spend that on, however, is the area you can impact the most to drive costs down.
The Medical Loss Ratio established in the Affordable Care Act requires insurance carriers to spend 80% or 85% depending on the size of your company, on medical claims, pharmacy claims, and activities that improve the quality of care. The remaining amount pays for everything else, including fees and commissions collected by your insurance broker and the profits earned by the insurance company.
A heavy investment in your employees’ well-being should not mean spending more money each year only to ensure that everyone else, but your company, makes a profit. Continuing to accept a year-to-year increases in premium costs places you in a “Stockholm Syndrome” - of sorts - for buying healthcare benefits. You need to work to break this psychological hold so that you will achieve a bigger bang for the bucks you invest!
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.