The Difference Between Cost Savings and Cost Shifting
The difference between cost savings and cost-shifting
If you're like most businesses, you've been trying to control your health insurance costs for years. The most common way to do this is by shifting costs to your employees through higher premiums and out-of-pocket expenses.
Cost shifting may suit your budget, but it's not suitable for your company culture. Employees resent having to pay more for their health insurance, which can lead to low morale and high turnover.
In this article, we'll explore moving away from the outdated ways to control health insurance costs for your business of
As businesses strive to control costs, many turn to their insurance carriers for help, but when you shift costs to your employees by raising premiums and increasing out-of-pocket expenses, your employees will have to pay more out of pocket before their insurance coverage kicks in.
By increasing deductibles, you unknowingly alert your employees to be more mindful of their healthcare spending and encourage them not to use their benefits when they feel under the weather because of their out-of-pocket expenses.
Cost Shifting Is Good for Your Budget, but Not Your Company Culture.
Shifting costs to employees and other stakeholders is a popular way to save money. Still, it can have negative consequences for your company culture. When employees feel like they are being asked to shoulder more of the burden, it can create tension and mistrust. This can lead to lower morale and productivity, ultimately hurting your bottom line.
Companies that take an updated, more holistic approach to cost-savings are more likely to create a positive culture that employees want to be a part of. By working with all stakeholders, you can reduce expenses without sacrificing the company culture you've worked so hard to build.
领英推荐
How can you create genuine cost savings?
ONE: Build a 3-year strategic plan, so you're not changing insurance carriers yearly
. Constant change is disruptive, frustrating, and expensive.
TWO: Consider self-funding your health insurance plan
When you self-fund your health insurance plan, you can reward your employees by eliminating their deductibles and out-of-pocket expenses for specific healthcare services, like primary care visits and prescription drugs. This option gives you the most cost control and flexibility to design the plan you want.
THREE: Reward your employees when they make good healthcare decisions
When you empower your employees to make good healthcare decisions, it benefits not only their overall health, but also offers you a more engaged and appreciated employee.
When you ditch the outdated mentality of cost shifting for cost savings, you are building a health insurance plan and company culture for your employees and your bottom line to love!
Schedule a free strategy call if you're interested in learning more about how to control your health insurance costs. We can help you find the best solution for your business.