Preparing for Health Reform? Don't Forget the Benefits.


by Jeff Rubleski

Source: InsuranceNewsNet.com

Costs, costs, costs. That's practically all you read about concerning health reform. But as businesses continue to make decisions about the changes precipitated by the Affordable Care Act regulations, there's another important matter that warrants attention.

Benefits. Granted, it's easy to see why the benefit side of the health insurance equation often overshadows cost concerns. Bureau of Labor Statistics reports show health insurance now accounts for 7.7% of total worker compensation, nearly 45% more than in 1999.

Yet despite these rapidly rising expenses, the Kaiser Family Foundation's 2012 survey of more than 2,000 large and small employers found 61% of firms offer health benefits to their workers. The reason is simple: These benefits contribute to the health, well-being and prosperity of their companies.

In Michigan, roughly 80% of benefit decision makers believed health benefits are important to employee morale, recruitment and retention. For example, an attractive benefits package also helps small businesses retain their best employees. A Self-Funding article on defined contribution health benefits estimates employers typically must spend the equivalent of 6-9 months in salary each time they have to replace a salaried employee. And that doesn't include any potential lost revenues from dis-satisfied customers.

Yet perhaps the most under-appreciated benefit of health insurance plans - especially those with some kind of wellness program - is their positive impact on employee productivity. An extensive study by the HR consulting firm Towers Watson found companies with a strong commitment to their employees' Health & Productivity (H & P) "experienced superior human capital and financial outcomes" and were "more likely to have lower health care costs, lower levels of presenteeism, fewer lost days due to disabilities and lower levels of turnover relative to their industry peers."

As you rethink your strategies for health insurance, make sure you factor in what their benefits really mean to your company. Here's a helpful tip from Devon Herrick, a health economist at the National Center for Policy Analysis: Remember to include employees in discussions about insurance coverage, which will help you understand what they value most. These discussions also give your company an opportunity to encourage employees to be more responsible for their health and healthcare spending.