Insurance Business ReviewJULY 20248IN MY OPINIONCREATING A HIGH-PERFORMANCE HEALTH PLANBy Vince Guerra, Area Vice President, Human Capital, Employee Benefits, GallagherHealthcare expenses are one of the greatest burdens on today's organizations. The financial strain of increasing healthcare expenses that outpace inflation and annual pay increases is having serious consequences. In addition to reducing profit margins, increasing costs leads to disgruntled employees who are tired of having their disposable income eroded by higher payroll deductions. Yet, one of the reasons medical costs continue to rise is because workforces are sicker than ever. No employer is spared from the exorbitant costs of chronic illness, including diabetes, cancer, heart disease, and other high-cost health issues. Many of these employees, some with one or more chronic illnesses, become high-cost claimants. They often require ongoing prescription drugs that can easily cost employers $100,000 or more.If you've projected your organization's healthcare costs over the next five years, you know the numbers are staggering. For example, consider a company with 500 employees and an annual healthcare spend of $5,625,000 ($11,250 per employee per year). With the medical trend averaging 7 percent, in five years, that same company will be paying $7,889,355 per year ($15,778.71 per employee per year). This trend is unsustainable, and this is why so many employers are forced to shift more of the financial burden to employees continually through higher deductibles and out-of-pocket maximums.The good news is that more employers are creating high-performance health plans in order to control costs and maintain robust benefits for their employees. What's the secret? Build your employee benefits strategy to include these two goals:Vince Guerra
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