Last year, Americans spent $2.26 trillion on healthcare. What does that mean for your company’s benefits?

If statistics—such as the 16 percent of the U.S. Gross Domestic Product spent on healthcare last year—seem abstract, consider this: Starbucks pays more for health insurance than it pays for coffee beans, and General Motors spends more on healthcare than it does on steel.

“Clients come in looking for the best coverage at the lowest price the market will bear,” says National City Insurance Group Senior Consultant Kate Kelly, describing the trend.

But Kelly recommends a broader approach to health benefits planning. “Think of it in terms of a funnel,” she says. “Start with the broad context of business goals, then HR strategies for recruitment and retention, and finally, which benefits package best fits those parameters at the lowest cost.”

She asks clients to consider what prospective employees ask about benefits during interviews, whether qualified personnel are being retained, if the workforce is being unionized and whether the company is opening in other states before selecting a package.

CULTURE AND COMMUNICATION
Kelly notes that employee buy-in is crucial to a new program’s success, regardless of a company’s size or culture.

She recommends convening a work group of employees representing various income ranges and parts of the company. Charge the group to examine the options offered by management and make recommendations toward the final decision. “This gives employees a voice in the process. It’s also a reality check when it comes to cost and other issues,” Kelly says. “Then the group can become evangelists for the plan.”

Also, Kelly explains, “Clear communication has been shown to have a greater impact on employee satisfaction than the actual level of benefits.” This is especially true with consumer-driven high-deductible insurance policies, health savings accounts and healthcare reimbursement arrangements.

To address these issues, Kelly’s group has developed both a spreadsheet to help managers see cost implications and a package of customized information and forms that employees can use to manage their benefits. “Giving employees the tools to see for themselves the cost and benefit implications of a new program takes a 90-minute presentation and reduces it to 20 minutes,” she says.

Whether a company seeks traditional healthcare benefits or a consumer-directed mix, the bottom line is the same. By employing proper strategy and careful communication, healthcare coverage can evolve from an onerous burden to a strategic advantage.

>> For more information about employee health benefits, click here.