How to Use Healthcare Benefits as a Competitive Advantage

Healthcare benefits are no longer just an added perk—they are a necessity and have become critical in attracting and retaining top talent.

For many employees, healthcare is one of the most important aspects of their compensation package, often taking precedence over other benefits. Employers who recognize this can leverage healthcare benefits as a powerful tool to set themselves apart from the competition.

The Evolution of Healthcare Benefits

Healthcare benefits have undergone significant transformations over the years. Initially, these benefits were simple, offering basic medical coverage to employees. However, as healthcare costs have risen and the workforce has become more diverse, the nature of healthcare benefits has evolved.

Employers are now offering more comprehensive plans that include wellness programs, mental health support, and even telemedicine services.

The Importance of Data-Driven Decisions

One of the key strategies for using healthcare benefits as a competitive advantage is understanding and using data. 

Allison De Paoli, CEO of Altiqe, emphasizes the importance of data in effectively managing healthcare benefits. “You have to get your data. If you just come in, your broker says, well, we’ve done the best we can, and you have a 7% rate increase, but you’re fully insured and have no idea what’s going on in your plan. You don’t know anything,” she explains.

Data allows employers to understand their risks and what drives their healthcare costs. This information is crucial for designing a benefits plan that not only meets the needs of employees but also controls costs for the employer.

By analyzing data, employers can identify trends, such as high prescription drug costs or frequent emergency room visits, and take steps to address these issues.

Customizing Benefits to Meet Employee Needs

Employers who want to stand out in the competitive job market must offer healthcare benefits tailored to their employees’ needs. De Paoli shares an example of a mid-sized employer who reduced their deductible from $4,000 to $2,000. Based on data analysis, this change solved a recruiting problem for the company. 

“We know what’s driving your cost. We know who’s using your plan. We know how often this happens. This is what it would cost in a worst-case scenario,” she notes.

Customization can also include offering different plans for different segments of the workforce. 

For example, younger employees might prefer plans with lower premiums and higher deductibles, while older employees might prefer plans with higher premiums and lower deductibles. 

Providing options allows employees to choose the plan that best fits their needs, which can increase satisfaction and retention.

Communication Is Key

Once a competitive benefits package is in place, it is essential to communicate its value effectively to both current employees and potential hires. 

“Explain what extra benefits it has. One of the hot topics right now is building something called direct primary care into a health plan that will allow an employee to see a provider at a very low copay—ten or fifteen dollars—and have virtual access 24 hours a day,” De Paoli advises.

Employers should use stories and real-life examples to illustrate the benefits of their healthcare plans. For instance, sharing an anecdote about an employee who was able to quickly access medical care for their child late at night through a telemedicine service can highlight the plan’s practical benefits.

Integrating Benefits Into Company Culture

Healthcare benefits should not be seen as a standalone offering but as an integral part of the company’s culture and values. Companies prioritizing their employees’ well-being are more likely to attract and retain top talent. De Paoli points out that sophisticated companies treat benefits as a capital expenditure that produces a measurable ROI rather than just an operating expense.

For example, a company focusing on employee wellness might invest in an on-site clinic. This would provide convenient access to healthcare for employees and demonstrate the company’s commitment to their health and well-being. 

De Paoli notes, “The case studies on on-site clinics are remarkable in how they both lower costs, even though right up front, it is an additional investment, and how much it drives employee satisfaction.”

Navigating the Challenges

Despite the advantages, managing healthcare benefits presents challenges. One significant challenge is the complexity of the healthcare system and the need for continuous renegotiation and redesign of benefits programs. De Paoli advises that understanding the workforce’s specific needs and analyzing data regularly can help mitigate these challenges.

She also highlights the importance of short contracts with vendors, which provide flexibility and ensure that the vendor’s fiduciary responsibility is to the employer. This can prevent long-term commitments that may not serve the company’s best interests.

Future-Proofing Healthcare Benefits

Employers should aim to future-proof their benefits programs to avoid the constant renegotiation cycle. This involves setting clear goals, budgets, and metrics for the benefits plan and regularly reviewing these metrics to ensure they are being met. 

“If you’re getting a flat renewal, that is the time to get yourself to vendors that have a responsibility to you. Over a claim cycle, which is about seven years, what you’ll see is you come out probably 40% to 50% ahead of where you would if you stayed fully insured,” De Paoli explains.

Healthcare Benefits as a Competitive Advantage

Healthcare benefits are a critical component of any competitive employee compensation package. By understanding and leveraging data, customizing benefits to meet employee needs, communicating the value of these benefits, and integrating them into the company culture, employers can use healthcare benefits as a powerful tool to attract and retain top talent. 

Despite the challenges, with careful planning and continuous improvement, healthcare benefits can provide a significant return on investment and contribute to the organization’s overall success.

De Paoli’s insights provide a roadmap for HR professionals and business owners looking to navigate the complexities of healthcare benefits and turn them into a competitive advantage. As the workforce continues to evolve, so must the strategies for managing and optimizing employee benefits.

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