Benefits Administration and Consumerism
Outsourcing benefits administration is oftentimes a very significant move by an employer. It can be expensive, time-consuming for the employer’s HR staff to implement and last, but certainly not least, employees typically question why something is being done to them rather than for them when a platform is implemented. Does it have to be this complicated? That is, are there any variables that can be removed so that the process is not considered so onerous? There is and it has to do with employee consumerism tools.
What are consumerism tools, you may be asking, and why are we even speaking about this topic given what was previously noted? In the modern benefits administration platform, the inclusion of consumer-driven high deductible plans is almost a given. Gone are the days of one PPO/HMO plan for employees having evolved into a matrix of choice when it comes to medical options. With the vast majority of outsourced benefits administration comes a variety of medical plan choices. Indeed, it is fairly characteristic for outsourced benefits administration to involve multiple high deductible options for employees. With this choice comes a burden to the employee—a burden to become consumers of their healthcare utilization. Employees with high deductible plans, in essence, become healthcare consumers in ways never before envisioned with standard PPO or HMO plans. This is the case because employees are now responsible for a significant portion of their healthcare costs with the high deductible portion of their medical plan.
Because of the consumerism paradigm, it is incumbent upon a benefits administration platform to provide tools to the employee to effectively become consumers. Put another way, the platform must provide tools for employees to become smart shoppers of their healthcare needs. How is this possible? It is actually quite simple from a platform standpoint. What is ultimately required from the platform are certain resources for employees such as cost and quality transparency tools and the ability to receive expert second medical opinions.
At their core, cost and quality transparency tools assist employees in spending their dollars efficiently. When an employee is responsible for a substantial portion of their healthcare, there is more importance placed on intelligent spending. For example, if an employee is prescribed an MRI and the employee has a $2,850 deductible, it matters whether the MRI costs $500 or $2,000—the typical cost variance of MRIs in most zip codes across the country. Similarly, although the employee always wants the top care regardless of who is paying, there is more resonance to the quality of care when it is the employee’s dollars at stake. Finally, given the high level of medical error in the United States, when employees are spending their own money, they want to be sure the diagnosis they’ve received is accurate and an expert second medical opinion accomplishes this goal.
These tools sound cost-prohibitive from both an employer and employee standpoint, but that is not necessarily the case. From the employer perspective, the listed tools can be provided as a voluntary benefit meaning it is something paid for by the employee. From an employee perspective, the tools can be packaged in a cost-effective manner such that their eventual cost is de minimis—most properly constructed benefits administration platforms with such tools are bundled for what amounts to the cost of a cup of coffee per month for the employee.
Outsourcing benefits administration is not necessarily easy, but in the same respect, it does not have to be overly difficult. There are tools and resources a platform can provide employees that will stop them from thinking the platform’s implementation is being done to them rather than for them by their employer. Tools such as cost and quality transparency and expert second medical opinions enable employees to become true consumers of their healthcare utilization. This in turn causes employees to appreciate their benefits more, become more engaged in the workforce and helps attract and retain critical talent.