Goodroot chief commercial officer and CoeoRx president Erik Wallace wrote this article for CFO to illustrate the point that self-insured organizations have greater customization options than they might realize. There are ways to lower the amount that both a company and its employees spend on healthcare.
CFOs are used to seeing the cost of health care benefits for their organization go up each year, typically by a double-digit percentage. If they’re lucky, the increase stays in the high single digits.
Employers typically absorb these increases and compensate by sometimes decreasing the quality of the benefit or increasing the employee contribution. After payroll, health care benefits are typically the second-highest cost for employers.
With the total cost of care in the United States exceeding the total revenue of the federal government at over $3.8 trillion, the health care marketplace has finally begun to adjust.
Employers now have an increasing number of methods to resist the rising costs of health care.
Ninety-nine percent of employers in the U.S. have under 500 employees. These “small” businesses are truly the lifeblood of our economy, but most are unaware they have options when it comes to employee health benefits.
For example, the CFO of a 50-person company with $6 million in annual revenue may be operating under the assumption that the organization is too small to self-insure. But a CFO does have a choice besides paying insurance premiums rising at a faster rate than any other cost on the balance sheet. While costs for self-insured organizations are rising as well, taking that step opens the door to greater customization that can lower the amount the company and employees spend on health care. There is a pathway to increased access to better health care at a lower cost.
Read the full article at CFO.