Bumping up health costs? Watch out for these effects

Almost all businesses plan to shift more of their health costs to employees in the near future. But there are certain things employers need to consider before they spring a price hike on its workforce.

Here are two things to consider before you make any major cost-shifting moves.

Worth the savings?

1. Workers may stop making doctor’s appointments. Some workers will react to increased healthcare costs in a very risky manner: by putting off – or completely avoiding – routine checkups and preventive care.

Research has shown that when co-pays and deductibles increase, people tend to put off routine care.

Result: Any short-term savings your firm realizes from passing the buck to employees will likely be offset by problems stemming from lack of preventive care. So tread very carefully when it comes to raising employees’ cost-sharing requirements.

2. Long-term wellness can give you the desired effects. You won’t see immediate savings, but new research shows the more you invest in wellness, the greater the results you’ll see.

So, for greater long-term savings, consider investing more in incentives to ramp up employees’ participation in wellness initiatives, blood pressure or biometric screening or flu shots.

Where you can help

If there’s absolutely no way to avoid major healthcare cost increases, there are ways to soften the blow for employees. Some examples:

• Increase your voluntary benefit offerings. While employees must cover the lion’s share of the costs, they’ll see things like disability coverage and long-term care as financially helpful.
• Roll out flexible spending accounts, so workers can use the pre-tax breaks to help them with their increased costs.