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What Is The Right Approach For Companies In Managing Healthcare Costs Of Employees?

What is the right approach for companies in managing healthcare costs of employees?

Providing healthcare benefits to employees is a legal obligation for employers. Companies of all sizes, including startups, must factor this aspect of employee welfare as part of the operational costs when planning their finances.  Looking after the well-being of employees is like perks that increase employee morale and respect for the company as they feel proud about how much the company cares for them.

It goes a long way in employee retention and motivates employees to give their best to their employers, who they feel will be by their side during difficult times. In the backdrop of the Covid19 pandemic that has turned all focus on healthcare, the aspect of employees taking care of their employee health has acquired special importance.

Healthcare schemes are mutually beneficial

Companies that look after their employee health receive their unwavering support, as demonstrated during the Covid19 pandemic when employees worked tirelessly to help the company tide over the crisis and take it to the next level.

Since there is a direct link between productivity and employee health, a healthier workforce is much more productive. Companies that provide proper healthcare support for their employees gain in more ways than one besides enjoying high productivity that increases profit and paves the path for expansion and growth.

Employees attach more importance to healthcare over salary

Employees often consider health benefits more important than salary because of the ever-increasing cost of hospitalization, resulting in breaking banks to meet some unforeseen health emergencies. With a proper healthcare plan provided by the employer, employees are much relieved of the financial burden, and the benefit overrides the need for a higher salary.

No matter how much you earn, it will be tough to meet the medical and healthcare expenses without healthcare support from the employer. Employees value the protection of the healthcare scheme of the company so much that they would prefer to continue their services by staying loyal to the company, which is an excellent gain for employers.

Healthcare costs can be burdensome for employers

It is not always easy for companies to arrange for some healthcare scheme for their employees because of the high costs that they have to bear. Buying some group insurance policy for ensuring employee healthcare is the most popular means of implementing healthcare schemes for employees, but it can be pretty costly.

The cost translates into $7,470 per employee for single coverage annually, and covering the family increases the price further. The cost of health care for startups can be burdensome; especially those startups that are struggling to find a toehold.

However, a better understanding of what drives healthcare costs today will help devise suitable strategies for managing employees’ healthcare costs without straining the budget.

Factors that impact employee healthcare costs

In the present context, three main factors impact the healthcare costs of employees. Therefore, owners of startups who are too sensitive about employee healthcare costs must carefully identify these factors and closely monitor them so that it becomes easier to manage healthcare costs by focusing on the right areas.

Covid19 – The pandemic has taught us valuable lessons about the need for self-protection, focusing on preventive measures that can reduce the incidents of sickness and poor health. Investing in Personal Protective Equipment (PPE), taking other steps of safety and hygiene, and health screening like wearing masks and gloves at the workplace, washing hands frequently with soap and water, and following the norms of physical distancing can reduce the chances of infections.

In addition, it can save expensive medical treatment, which often needs hospitalization. Moreover, Covid19 can damage employee health due to its long-lasting effects, increasing absenteeism and affecting productivity. Protecting the workforce from the virus at all costs goes a long way in helping businesses survive the crisis.

Increased lifestyle diseases – Lifestyle diseases have increased considerably over the recent years due to extended working hours, negligence towards personal health by avoiding exercise, and poor eating habits. As a result, diabetes, hypertension, cholesterol, and mental health issues are common among young people that need lifelong treatment involving expensive testing and medication.

Neglecting preventive care – Due to poor concern about personal health, most people do not undergo periodic health checkups to identify problems early and cure diseases and conditions before it turns too much serious.  Encouraging preventive care among employees can ensure their good health that benefits the organization.

Managing health care costs

Offering comprehensive healthcare benefits to employees is the best way to reduce healthcare costs. The package must include preventive care as well as the benefits available from medical insurance. In addition, the package offers protection and gives peace of mind to employees who can concentrate on their work better to give their best and ensure higher productivity.

Here are the steps to manage healthcare costs effectively not to put the company under financial stress.

Employee risk assessment – Assessing the risk level of employees is the first step to understand the cost of providing healthcare assistance to them. The exercise begins by understanding the occupational hazards that employees face. Conducting yearly health check-up programs will help track other diseases like diabetes, cancer, heart ailments, and asthma. Gathering employees’ family medical history can help gauge the possibilities of some diseases carried through genes. The method of risk assessment applies to all sizes of companies, from the smallest to the biggest.

Choose customizable and flexible plans – Employers must create customized healthcare plans based on your assessment of employee health to spend the money wisely by keeping the costs under control.   Moreover, choosing a mode for paying premium monthly, quarterly, half-yearly, or annually suits their financial plans without increasing the overall cost.

Adopt smarter healthcare strategies – Making healthcare more accessible to employees through digital means like teleconsultation with doctors, online booking of lab tests, and availability of online medicines will ensure timely treatment and reduce sickness. In addition, when healthcare is more accessible regardless of the location of employees, it encourages them to use the opportunity to stay healthy.

Better is the health assessment of the workforce easier it becomes for employers to manage the healthcare costs.

 

 

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Written by Karen Anthony

Karen is a Business Tech Analyst. She is very responsible towards her job. She loves to share her knowledge and experience with her friends and colleagues

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