How Can Benefit Plan Modeling Make Your Business More Cost-Effective
Employers face many challenges and are always making critical decisions that can affect their profitability and sustainability. Changing the design of their employee benefits plan is one of these decisions that can have a big impact on the overall budget.
The employee benefits you offer as an employer are a resource that must be maximized. In some cases, it might make sense to manage costs by executing plan design changes. When doing so, it is important to consider all of the impacts that these changes may have.
Employers can cut costs by executing plan design changes but it might also cause a reduction in your capacity to attract and retain top talent. Yet, when considering all variables and results, it might make sense to move forward with strategic changes.
The best way to make a decision is to estimate results by doing plan modeling. Doing so will allow decision-makers to evaluate all the possibilities and better understand how to maximize their resources for the long-term while minimizing risk at the same time.
Employee Benefits Plan Modeling
To a certain extent, plan modeling allows you to predict how the future might look, depending on the adjustments you are considering and how claims would have been paid in these different scenarios.
It is always a good idea to start this process by gathering and analyzing historical claims data. By doing so, employers will be able to identify the areas in their health plans where changes need to be made. For example, if emergency room costs have been higher than average and this is an ongoing trend, an employer might want to explore the possibility of raising the emergency room copay.
The use of modeling allows us to play out possible scenarios before committing to an action plan. With this exercise, employers can make decisions that increase the likelihood of producing positive outcomes for the company.
These are some of the possible decisions that you might consider executing when doing plan modeling:
Office visit vs. specialist copay
Prescription drug tiered rate structure
Urgent care vs. ER copay
Deductible and coinsurance structure
Increased efforts at utilizing preventive care
Data will allow you to find ways to control costs and make better decisions. Budgets are limited and employers are always facing the challenge of having to maximize revenue. Data-driven decisions will help your company operate in a strategic manner by considering how all stakeholders will be impacted before actually implementing any changes.
In some cases, models can predict how many employees will be affected by each change, allowing the company to have a holistic approach when making decisions.
For most employers, this approach can result in significant savings. Identifying, modeling, and managing key benefit plan components can be vital for your budget.
If you’d like to put plan modeling to work for your business, contact us by clicking the button below.
Benefit Concepts, Inc. (BCI) is a Texas-based company that helps individuals and businesses achieve peace of mind. We achieve this through our consultative approach to design and implement comprehensive benefit programs as well as HR support, Compliance, and Technology services.
As one of the largest group and individual benefit agencies in the United States, BCI also creates strategic partnerships with other agencies across Texas by making available our wide array of solutions and specialists to their clients.