As you are reviewing the employee benefits plan, you begin to ponder upon a vexed question, "how much other employers are paying for employee benefits?"
Unlike in the US, their Bureau of Labor publishes how much companies have spent on employee benefits every year; however, such information seems to elude most organisations in Malaysian and Singapore.
But why is it important to know how much others are paying?
Simply because not knowing where your organisation stands among the market is a perplexing problem. Without an industry benchmark, you're uncertain whether you're spending over or under the standard. A cut on one benefit could escalate the turnover rate, especially healthcare benefits.
If there is one significant benefit that stayed at the top of employees' must-have list, it's healthcare. It's also the benefit that has been increasing in cost year upon year.
So how can organisations cope with the uncertainties and the rising need and cost of healthcare?
Here, you'll learn how much employers are spending on healthcare benefits and 3 ways that can help reduce your healthcare benefits costs.
How much are employers spending on employee benefits?
Employers in Malaysia spent an average of USD 3,741 per employee per year. As for Singaporean companies, they spent USD 5,458, and the costs are expected to rise significantly over the next three years.
To better control benefits costs, organisations are closely analysing how they can better design and deliver healthcare benefits to save costs. One way is to determine the driving cost factors.
According to a study by Willis Towers Watson, 9 out of 10 respondents (86%) reported overuse of care recommended by medical practitioners and 71% claimed to be the high cost of new medical technology.
Another factor is the increasing trend of most costly diseases: cancer (86%) and cardiovascular diseases (48%).
Now that we know the driving cost factors, you can now optimise your healthcare benefits without losing coverage. Here are three suggestions from Mednefits to help you better make use of your budget.
How to save employee benefits costs?
1) Switch to cheaper healthcare benefits
If you can get a cheaper healthcare plan without compromising coverage, that's a smart move to optimise your budget.
You could be overpaying your healthcare insurance plan, or your employees are underutilising the coverage. Either way, it's similar to buying products that you don't need.
What you can do to save money on corporate health insurance is by determining how much your employees are actually spending and use the data to decide cheaper healthcare alternatives such as a lower insurance premium, self-funded reimbursement, or flexible pay-as-you-use plan.
2) Adopt telemedicine
We are entering the times where doctor consultations can be done online. Yes, you heard it right. You can see a doctor via Zoom and phone. No more driving to a clinic, wait in line and smell the medicines on the shelves.
Telemedicine, also known as telehealth or teleconsultation, may seem to be a new concept, but some hospitals have already established it several years back—for instance, DoctorOnCall, and DoctorAnywhere. You can also see mental health specialists online too, for example, SafeSpace provides free mental health education virtually.
To organisations, this is music to their ears. Telemedicine is known to incur fewer costs, lowering the total expenses on healthcare benefits.
To employees, they can save commuting and waiting time, and stay in the comfort of their homes without dragging themselves to the clinic—especially when they're sick.
What you can do today is to inquire whether telemedicine and teletherapy is covered in the healthcare insurance plan. If it is, try adopting telemedicine and educate your employees. If it isn't, negotiate with your insurance provider or look for another provider with telemedicine in their plans.
3) Implement wellness programs
'Prevention is better than cure' cannot be truer in this case.
Cancer and cardiovascular diseases are known to be the two most costly diseases. The good news is, you can implement wellness programs to prevent your employees from contracting these two diseases and other chronic diseases.
Gym memberships, company-organised fitness classes, smoking cessation programs, public transit allowances, healthy snacks, and napping capsules are some examples of wellness programs you can adopt in your benefits plan.
The idea of wellness programs is to create a healthy environment so the employees can be healthy and reduce the number of trips to clinics and hospitals.
What you can do today is to review the common reasons for your employees' doctor visits and implement wellness programs specifically designed to curb those reasons.
Although the cost of healthcare will continue to rise, at least, in the next three years, it is not all doom and gloom.
You can start taking action today to reduce healthcare costs without trading off your employees' needs. By now, you are equipped with the benchmark data and three ways that can help you save benefits costs.
To help you further, our benefits specialists are ever-ready to provide answers to your perplexing questions about how to manage your benefits costs better. Simply drop your contact info here and get started with optimising your HR budget.
Mednefits helps businesses take care of their employees with its automated, affordable, and accessible employee benefits platform. Request to join Mednefits for free to help process and track claims in real-time, while controlling costs.