By Lisa Pinion
June 3, 2010
Even though we’re an insurance brokerage, Assurance isn’t immune to the challenges and pressures other companies face when it comes to the rising cost of health insurance as an employee benefit. Not too long ago, this escalating expense was beginning to critically damage our bottom line. At that time, we developed a long-term strategy to control our own insurance costs and improve the health of our employees. As a result of these efforts we’ve positively impacted our organization and achieved outstanding results.
Situation
In 2005, our company’s health insurance renewal costs rose drastically from the previous year. With poor overall medical claims and employee health, additional increases were expected. As a company focused on continuous, profitable growth, we knew we needed to find a way to control these expenses, while still offering a competitive benefits package to attract talent.
Solution
We developed and implemented a four-year strategy which would improve employee health and behavior to reduce healthcare costs and add value to our benefits offering. In order to develop a successful strategy, we first needed to create a measurable goal. We determined to achieve long-term success our yearly health insurance cost increase could be no more than 3 percent. Eventually, we would need this figure to stabilize. The best way to achieve this was to move towards a partially self-funded program.
In order to become successful, partially self-funded and control costs, we would need to improve the healthy behaviors of our employees. This led us to offering a consumer-driven healthcare option so employees would be more in control of their health and healthcare costs. In addition, we knew wellness would be a large component of controlling costs.
Offering an HSA would reward healthy employees and increase longevity with our company as employee HSA balances grew over time. Incorporating a robust wellness program into our culture would improve employee health and productivity, and lower claims. Both created a competitive advantage for Assurance in the marketplace and would lead us to success.
Getting employee buy-in and participation wouldn’t happen overnight, which is why we developed a four-year plan. By the end of the four years, we were looking to accomplish the following:
-¢ Be partially self-funded for our health insurance
-¢ 90 percent employee participation in health risk assessments
-¢ 75 percent HSA enrollment
-¢ 0 percent health renewal increase
Each year, we would need to implement programs and incentives to build upon one another and improve participation in wellness activities and the HSA. Clear and consistent communication from all levels of the organization would play a large role in achieving our goal.
Implementation
In our first year, we introduced the HSA plan which offered a substantial company contribution as an incentive. Prior to open enrollment, we developed a multiple touch communication campaign focused on HSA education, developed six wellness initiatives and incorporated a health risk assessment. This would be key in helping us find out where the risks in our population existed to head them off before they developed into large claims.
In our second year we increased our PPO employee contribution while the HSA contribution remained the same. We ramped up our HSA communication and increased the number of wellness programs based on the data we collected in the previous year. To incent employees to participate in the health assessment, we offered $100 in cash and a chance to win a weekend trip.
With an additional increase to the employee PPO contribution in our third year, the HSA plan was becoming more attractive. We improved our HSA communication even further by scheduling one-on-one meetings with individuals who were still on the PPO plan. On the wellness front we added an additional day for the health assessment and a $250 incentive.
More and more employees began jumping on the HSA bandwagon as they learned of its additional benefits in our fourth year. Many saw it as an opportunity to supplement their retirement savings or reduce their taxable income. With the success of our wellness program, we formalized a wellness committee to manage company-wide events. This additional support of the HSA and wellness program created a perfect opportunity to move to a partially self-funded program.
Results
The transformation of Assurance has been evident in the following measurable statistics:
-¢ We successfully became partially self-funded
-¢ Employee participation in health risk assessments rose from 30 percent to 90 percent
-¢ Enrollment in the HSA plan increased from 16 percent to 86 percent
-¢ Most importantly, our health insurance renewal increase gradually lowered and stabilized at a 0 percent increase
We look forward to continuing our progress on impacting the healthy behaviors of our employees, improving productivity, reducing absenteeism and controlling costs. You too can impact your workforce and achieve measurable results if you take time to develop a strategy, stick with it and provide employees the tools they need to educate themselves.
Lisa Pinion is the vice president of Human Resources at Assurance Agency, Ltd, a winner of the 101 Best and Brightest Companies to Work for in Chicago. She can be reached at [email protected].
