How brokers help employers manage healthcare costs

While compliance tops the list of market forces driving brokers to expand their service offerings, employers continue to be concerned with—and rely on their brokers to help address—the high (and rising) cost of healthcare.

According to a recent study by Optavise, focus on cost control takes three forms: reducing direct expenses, educating employees to reduce their (and by extension, their employer’s) costs, and compliance costs (such as fines and litigation expenses).

Employers are particularly interested in efforts to manage prescription drug expenses, with 77% of brokers reporting high to moderate demand for support in this area. Popular programs include mandatory generics and/or mail order, step therapy programs, and partnerships with discounters such as GoodRx (or even Cost Plus Drugs). Other programs of interest include shifting to (or from) self-insurance, and point solutions targeting specific health conditions (and associated high-cost claims).

Interestingly, programs that have received a lot of buzz in the past as potential cost-management solutions appear to no longer be (as) popular. Brokers report that only 26% of employers are interested in reference-based pricing; with 23% interested in salary-based premium, and 19% in high-deductible health plan total replacement packages.

Employers are increasingly aware that cost-shifting to employees through higher premiums and copays and reduced plan coinsurance is no longer moving the needle and is perhaps driving reduced utilization of health plans. Instead, the report showed a renewed focus on educating employees about their benefits and introducing programs that help employees reduce their own costs. Brokers reported high to moderate demand for:

• Virtual care (81%)—providing 24/7/365 access to physical and mental healthcare providers from the comfort of the patient’s home.
• Clinical advocacy solutions (73%)—where advocates can answer questions about health conditions and treatment options, arrange second opinions, help members better understand and manage their condition and support them in making long-term lifestyle changes leading to reduced risk, improved outcomes, and lower cost of care.
• Transparency support (63%) – researching cost of recommended care and providing price comparisons so employees can make informed decisions about where to receive their care.

Such programs directly or indirectly help employees and their family members save money—which in turn reduces employer costs—and demonstrates the effect their choices have on their out-of-pocket costs.

Investing in year-round communications to remind employees of the plans and programs available to them and providing support at open enrollment to ensure employees choose the most appropriate plan can increase plan utilization (particularly for programs designed to promote health and reduce costs). Fortunately, most brokers provide these services either directly or indirectly through partnerships with communications specialists.

Finally, compliance can reduce or eliminate another burdensome healthcare costs—fines, penalties, and litigation. Keeping abreast of evolving state and federal regulations and new reporting requirements, preparing employee-facing materials such as summary plan descriptions, or finding the right benefits administration partners to handle enrollment, COBRA and ACA-reporting responsibilities can be tremendously time-consuming—and risky, if you lack the necessary expertise. Brokers provide important support with this burden—94% of brokers surveyed report high or moderate reliance by their employer clients for compliance issues, and 44% of brokers state compliance is one of the top three services employer clients and prospects most request.

Today’s broker does far more than identify potential carriers and/or TPAs, handle RFPs, and negotiate contracts. Managing healthcare costs requires a multi-pronged attack—and brokers are more than ready to lead the charge. 

Optavise is your benefits partner
Optavise is a trusted partner, guiding employers and their employees through healthcare choices including voluntary benefits, benefits administration, and year-round advocacy services that reduce costs and increase benefits engagement.