Health and Wealth, part 1

They don’t just rhyme. The two are interlinked in many ways and at deep levels.

The cost of healthcare in the US is rising quickly, forcing companies to seek solutions to providing employee healthcare benefits while keeping costs low. They know that they cannot attract good workers without providing this important benefit, one that can not easly be found anywhere else in our system. On the other hand, businesses are trying to cut where they can in order to survive.

We know that wealthy people are in general healthier people. And the cost of being ill can include a quick fall into poverty.

There are a few new reports that expose interesting connections.

The International Foundation of Employee Benefit Plans found that employers may be able to save money by doing an audit of those receiving benefits. It found that many employers are providing healthcare benefits to people who are not eligible under the employer’s plans.

With cost-savings in mind, some employers are conducting dependent eligibility audits to accurately determine who is covered under their plan. A recent survey conducted by the International Foundation of Employee Benefit Plans found that 26% of U.S. employers conduct eligibility audits for their health care plans.

“Employers conduct an eligibility audit to ensure that every person covered by their health plan is an approved dependent,” said Julie Stich, Senior Information/Research Specialist with the International Foundation of Employee Benefit Plans. “When the audit is conducted, employers often discover many people—former spouses, adult children, non-immediate family members—who are covered under the health plan even though they do not qualify as a dependent.”

“Removing ineligible dependents from the plan can ultimately save the employer hundreds of thousands of dollars and, given the current economy, I expect the percentage of employers conducting eligibility audits to grow,” said Stich. “In the past, some employers may have hesitated to conduct an audit because of the possibility of their employees’ negative reactions. With the current financial situation, however, cost-saving will likely be the employers’ main concern.”

It also advises employers

Another cost-saving option considered by employers is voluntary (employee-pay-all) benefits, which are group benefits offered at the workplace but paid for by employees. These benefits are used to expand benefit options without increasing costs. Voluntary benefits may include coverage supplemental to the employer’s current offerings or, for those employers who are unable to provide health care coverage, they may include standard health insurance. The survey found that 39% of employers have voluntary health insurance, 40% offer voluntary dental insurance and 37% have voluntary vision insurance.

“Voluntary benefits can be a great option for employers with tight budgets who still want to help their employees obtain health care coverage or other types of insurance,” said Stich. “Because group insurance premiums are typically less expensive than the premiums for an individual policy, offering voluntary benefits at the workplace can help employees who want the coverage but also need help making ends meet. “

Employers are also implementing a number of cost-management techniques for prescription drugs. The most popular technique among the respondents was using a mail-order drug service, with 85% of employers reporting they use this approach. Other popular methods include promoting generic drugs (71%), the use of drug formularies (68%), three or more tiers for cost sharing (59%) and the use of a pharmacy benefit manager (50%).

The details are to be found in Employee Benefits Survey: U.S. and Canada, 2009, for sale at $132.

A harsh remedy, but one that will be attractive – at only $132 – to employers who are struggling to stay afloat.

Comments are closed.