There are a lot of things that might set a great employer apart from a mediocre one, but one that’s extremely hard to overlook is health insurance. After all, the cost of healthcare in the US is on the rise, even outpacing the record inflation of the past few years. Employees want to know that their employers have them and their dependents covered before they’ll be willing to sign any contracts. 

But providing healthcare isn’t cheap. And, as we addressed in a previous blog post, simply spending more money on health and other employee benefits won’t necessarily bring in the kind of ROI you might expect. 

You might think that the more you spend on health care, the more your employees will value your contributions. But surprisingly, simply spending more doesn't get you a lot of additional recognition.

What matters more than how much you're spending is how your benefits are perceived by your employees.

With employee benefits being such a large investment for most companies and recruitment and retention on the line, it is critical that employees understand the value of their healthcare. So, what steps should you take to evaluate and accomplish this?

What Is COVID-19?

The new coronavirus was first encountered in Wuhan, China, in December 2019.  It is believed that it originated with animals and spread to humans at a live animal market in Wuhan.  In February 2020, the World Health Organization (WHO) named it COVID-19.  As of March 2, the outbreak has affected an estimated 87,000 people around the globe, causing over 2,900 deaths.

HHS recently released “100 Days of Action on the President’s American Patients First Blueprint.”

Some of the information looks great, such as 60% fewer brand-drug price increases than the same period in 2017 and a record breaking 126 generics approved in July.  Additionally, 4 drug companies canceled planned price increases and 13 committed to price freezes for the rest of 2018.

HEALTH CARE COSTS ARE RISING 4X FASTER THAN WAGES

Over the last 18 years, the cost of family premiums and worker contributions have risen by a total of 270% and 224%, respectively. That compares to worker earnings growth of 64% and inflation of 47%.  The result: every year health care is consumes a larger percentage of Americans' paychecks. 

Pharmaceutical pricing and fees have become the health care industry’s best kept secret. The cost of prescription drugs are increasing at an unsustainable rate, and to make matters worse the revenue sources aren’t transparent to the patient or employer. 

• Prescription drug spending in 2016 accounted for 10% of the nation's total health care costs.
• Prices for common medications are as much as 117% higher in the United States than in other nations.

Over the past few years, we've all witnessed the unchecked rise of health care costs in America. 

Some employers have been sitting back hoping things will get better. Others have been desperately trying everything to regain control. 

But one thing is clear: we aren't winning.

THE SYSTEM KEEPS WINNING

Every incentive in the health care system has been built to work against you: the employer.

Insurance companies make more when the cost of claims goes up.

Hospitals are buying primary care centers and referring patients to treatment options with higher profit margins.

Pharmacy Benefit Managers get paid more when drug costs increase.

Insurance Brokers have delivered ideas and tactics. But they often fail to deliver their clients a multi-year strategy that can move the needle. 

• eliminating tax breaks
• creating a new tax credit for employers offering paid family and medical leave
• repealing the individual mandate under the Affordable Care Act (ACA)

That being said, the impact on the fringe benefit programs is less drastic that what was contained in earlier drafts of proposed tax bills that were being considered.

It’s easy to criticize from the sideline. And employee benefits provides a lot of fodder for complaints directed at HR folks.

Why do peanut gallery comments hurt so much? 

Peanut-gallery-style commentary isn’t just unpleasant to receive, but it’s also unhelpful.

As stated above, the peanut gallery is defined as people who focus on insignificant details. And this is what makes it so frustrating.