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Guide Your Benefits Decisions Using a Forward Multi-Year Plan

Driving on an empty road to the sunWhen it comes to your employees’ medical benefits, most employers know that rates will rise and changes will be made once a year.

How well is your business prepared for those annual changes?

It’s not enough to anticipate a rate change and react at that time. The adjustments and decisions you make as an employer can be stronger and more effective if you look at this as a forward-looking, multi-year investment. It’s not just a task to be addressed 12 months at a time.

As 2014 comes to an end, you should be looking toward the changes coming up through at least 2017.

Companies can offset the new higher rates with different funding methods. Many employers are choosing to pay their employees’ claims out of pocket – self-funding – instead of paying the large monthly premium. This is not without risk in situations where an employee is seriously injured or becomes very ill, but the costs savings can be substantial across the board versus paying monthly premiums.

It goes without saying that self-funding is more commonly done in larger companies that have the cash flow to cover large claims. Self-funding also allows employers to customize their offerings. For example, you can adjust elements such as covered benefits and also exclusions depending on the makeup of your workforce.

A long-term forward-looking plan can also focus on promoting prevention programs such as health screenings, smoking cessation and weight-loss plans, which can significantly lower premiums. These wellness plans can also give your employees a break on their employee contributions.

Take some time to plan out what kind of changes your business will be going through and how you can adjust your offerings.