3 Strategies for Reducing Health Benefits Costs in 2022
According to a PricewaterhouseCoopers (PwC) report, medical costs are projected to increase 6.5% in 2022. That’s why employers must think strategically but creatively about how they can lower their health benefits expenses. Here are three strategies to help.
1. Control Drug Spending Employers can educate employees on the price differences between name-brand and generic medications. Doing so can help employees understand that they can save money while still receiving the same quality treatment. Additionally, employers may consider introducing varying levels of prescription drug coverage.
2. Encourage Active Benefits Participation Employers can help limit overall health costs by making employees active participants in their health care. Price shopping, in particular, should be easier in 2022, given the new hospital price transparency rule that took effect on Jan. 1, 2021.
3. Embrace Virtual Health Options There are countless telehealth services available these days. Individuals can connect with health professionals in just a few clicks—no waiting times or driving to a clinic. Additionally, individuals won’t need to take large chunks of time off work, allowing for greater productivity.
Open Enrollment 2022: Benefit Notices Employers that sponsor group health plans should provide certain benefit notices in connection with their plans’ open enrollment periods. Some of these notices must be provided at open enrollment time, such as the summary of benefits and coverage (SBC). Other notices must be distributed annually. Some benefit notices apply to all group health plans. Others only apply to certain group health plans, based on plan design and coverage.
Specific notices (non-exhaustive):
· Medicare Part D Notice · SBC · HIPAA Privacy Notice · WHCRA Notice · CHIP Notice · SPD (and SMM, if applicable) · Notice of Patient Protections · Wellness Program Notices · Individual Coverage HRA (ICHRA) Notice
In general, any plan design changes for 2022 should be communicated to plan participants either through an updated summary plan description (SPD) or a summary of material modifications (SMM). Reach out to your broker contact with any questions.
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