5 health insurance pitfalls businesses can avoid

April 25, 2022 9:00 AM

Employee benefits are the second-largest line item for companies after payroll — yet they are often underappreciated and underutilized by employees, and the investment ultimately gets undermined.

This begs the question: How can your employer clients make the most of that investment and positively impact their workforce?

Here are five ways to help employers avoid communication pitfalls and achieve the best ROI.

Explain costs plainly

Healthcare insurance can feel like smoke and mirrors. It is a stubborn industry, clinging to its acronyms and cryptic underwriting explanations. If you ever had a “no-shop” offer from an insurance carrier, you may have had the odd realization that healthcare sometimes resembles buying a used car. As a result, business leaders can lack confidence in their insurance carrier or broker, a feeling that translates to employees.

Instead, help employers understand how premiums and renewals are “calculated” based on group size, demographics and loss ratio. Knowledge will demystify what goes on behind the underwriting curtain, and clients will be better equipped to navigate renewals and justify budget increases.

Read more:

Employee benefits are inequitable — and it’s getting worse

Use real-life scenarios to explain coverage

Healthcare is a large expense, and too often benefits don’t get fully utilized by employees. Knowing what coverage is available can feel like a treasure hunt. The treasure is the coverage you buy, but sometimes it feels like a hidden map of systems, processes and funnels to navigate in order to find what is buried. Frequently, high deductible plans are offered and employees don’t understand what expenses really will be or how in-network benefits differ from out-of-network benefits.

By crafting real-life examples of how each plan covers different healthcare scenarios, employees can understand how coverage translates to real-world situations. Take advantage of the concierge services many carriers offer so that employees facing healthcare needs are guided on the best way to maximize their specific benefits, predict costs and coordinate care from multiple doctors. Preventative visits often help employees avoid larger problems that go undetected and ultimately reduce future healthcare expenses. Have raffles for those who take advantage of their preventative benefits.

Make the claims process personal

When an employee has a medical need and a procedure or claim gets denied, this can be emotionally draining and disconcerting. Insurance carrier communications can inadvertently feel cold, transactional and overwhelming. Faith is lost in the “system” because in the time of need, employees can be subject to rejection and the ordeal of appeal processes.

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Advisers can be the guide here — don’t let the employee populations you serve face claims issues alone. You’re the advocate who can review the denial with the carrier (and provider) and ensure it is well-justified. Oftentimes, claims are denied because doctor or insurance peer reviews indicate a disagreement around the optimal course of care. You can be the “human” in the system who allows employees to feel cared for as they navigate provider or carrier disconnects.

Help clients manage and anticipate cost increases

Sometimes insurance feels like whack-a-mole, wherein you hit one mole only to find another pop up. Clients get a high renewal, so they move carriers to save money. But next year, they face the same situation. They’re always outrunning renewal increases that ultimately keep popping up.

As mentioned, understand how the client’s renewal was generated. If negotiations cannot be made with the incumbent carrier, make a decision about absorbing a financial increase in order to build a longer-term relationship with one carrier. Sometimes this is advantageous in the long run, namely if a carrier is well-liked by employees. Changing carriers often can be financially effective, but can create employee disruption because employees must learn about their new plans and networks. While sometimes this is an effective way to find short-term financial relief, consider building a basic renewal increase into your client’s budget each year so they have the cushion to stay or go depending on the long-term strategy. Ten percent per year is a general rule of thumb, knowing that claims experience and market conditions influence that year to year.

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Humanize open enrollment communication

Open enrollment can often feel like a download of insurance information instead of an engaging, meaningful experience. It is as if you’re giving someone a gift, but the communication of this gift can make it feel like a ton of bricks.

Do not miss the opportunity to infuse open enrollment with positive employee communications that reinforce how valuable employees are and how much the company cares. Encourage clients to consider adding some fun team-building or wellness-focused activity to open enrollment so the experience is positive vs. transactional.