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For most companies, open enrollment is a 30-day period in which employees have the opportunity to select their benefits for the next year.

Making an informed decision about which health plan to select is critical for employees, but it can be a little overwhelming, especially if there are several plans to choose from. To assist employees in their decision-making process, it may be helpful to hold a series of on-site open enrollment meetings. These meetings provide a forum for employees to meet with a representative from the health insurance carrier to discuss details about each available plan and ask questions.

The key to planning a successful open enrollment campaign is preparation, preparation, preparation. If you plan ahead and enlist assistance from your health benefits company, you can offer employees an educational campaign that will equip them with the information they need to select the best health plan for them.

So many choices

The first step is to determine the health benefits options that will be available. The plans that you offer to employees may change from year to year.

Prior to open enrollment, many employers revisit their health plan package to make sure they are getting the most for their company’s health benefits dollars.

Whether you select a new health insurance carrier or renew with your existing one, be sure to find a plan that packages core medical benefits with additional services designed to improve health and reduce costs. For instance, ask your health benefits company if it has a disease management program to help employees with chronic conditions such as diabetes.

Typically these programs provide employees with tools and instructions to help them monitor their health status and manage their disease to a point where health risks are as minimal as possible. Participation in disease management programs can also help employees avoid costly hospital admissions and reduce your bottom line.

Set the agenda

Once you have determined the health benefits plans that will be available to your employees, it is time to develop an agenda for open enrollment. An effective open enrollment campaign should do more than simply inform employees of their health benefits options; it should also educate them on how to get the most from their health benefits plan.

Open enrollment is a great time to inform employees about cost-effective options that are built into their health plan. These options can significantly reduce an employee’s out-of-pocket expenses, but often employees don’t know they exist. For instance, with many plans, receiving services from an urgent care center for a nonlife-threatening illness or injury (such as a minor cut, cold or insect bite) may be cheaper than receiving the same services at a hospital.

Open enrollment is also a good time to educate employees on the importance of a healthy lifestyle and make them aware of any worksite wellness programs. If the available health benefits plans feature discounts on fitness club memberships or complementary and alternative medicine therapies, be sure that this information is made available to employees.

Promotion, promotion, promotion

The final step to a successful campaign is to communicate the schedule of open enrollment meetings to your employees and encourage their participation. If your company has a newsletter, include the meeting schedule in it. E-mail is a good communication tool; you may also want to consider posting signs.

Open enrollment does not have to be a stressful time for you or your employees. With the proper planning and assistance from your health benefits company, you can conduct a successful campaign that educates employees so that they select a health plan that makes sense for their health care needs and budget.

The cost of providing employees with health insurance coverage continues to increase at a double-digit rate. We’ve read a lot about cost drivers in health care – exorbitant hospital charges, rising prescription drug costs, expenses associated with developing new technologies and treatments, an aging population and litigation. Nurturing these factors is an environment in which the demand for health care seems to be increasing.

For the most part, there is little employers can do to control what is driving health care costs out of their reach. Health benefits companies can and do negotiate discounts, and while those help, the underlying costs continue to skyrocket. The increases created by these cost drivers flow through the health benefits companies and eventually trickle down to employers in the form of higher health insurance premiums.

In this soft economy, declining revenue is putting a squeeze on company expenses. It is likely that you will experience a 15 percent to 20 percent increase in your group health insurance when a renewal form lands on your desk.

Can you raise the cost of your company’s product or service as quickly as your health insurance premiums are increasing?
Probably not. However, there are steps you can take to gain some control over your health care costs.

Finding a solution

Employers can exercise some control over their costs by finding a health benefits company that provides the “best” value for their company’s premium dollars. The way in which you “shop” a health plan can impact the price. I’ll use an analogy. Your travel agent has a great deal for you – air, car, hotel and meals included. You tell your agent to book it.

Coincidently, your neighbors just booked that same trip for $1,000 less through their travel agent. One agent shopped for the best price, the other agent arranged the trip through his or her vendor of choice. Whether it’s a family vacation, buying a car or choosing a health benefits plan, how you shop can impact your cost. Make sure your insurance agent doesn’t “arrange” your health plan for you. How many providers are enough? The more participating providers a health plan has, the more you’re likely to pay in premiums. If you are considering a health plan that doesn’t include a few desired physicians, request that the carrier add them to its network.

Physicians participate in many different health plans and are usually willing to participate in one more. Don’t get caught in the trap of paying 10 percent to 15 percent more for your health insurance premiums because one or two doctors are notparticipating in the plan. It’s reasonable that an employee can find another physician out of the thousands on the plan.

The power of marketing

Living in the United States affords us exceptional opportunities and choices. Along with that privilege comes a barrage of communications designed to influence our decision-making. What we read in the papers, see on television, hear on the radio, see flashed across a billboard, get stuffed in our mailboxes or pops up on the Internet is designed to predispose us to a company or its product.

Marketing can be an effective tool, and depending on how much is spent, can be quite influential. What marketing cannot do, however, no matter how much is spent, is replace what it takes to come up with an affordable health benefits solution that works for you. Be sure to look for a health benefits company that is flexible, listens and is willing to roll up its sleeves to provide you with a package of health benefits that you can afford.

As a business owner, you’ve come to expect big increases in your employee health insurance premiums of late. Employer-sponsored health insurance premiums increased an average of 11.2 percent in 2004, and this was the fourth consecutive year of double-digit growth, according to the recent Annual Employer Health Benefits Survey released by the Kaiser Family Foundation.

That’s about five times the rate of inflation nationally, and probably significantly higher than the price increases your company has imposed on its products and services in the same time frame.

The reasons for these increases are not mysterious. The largest share of the ongoing increases track to increased utilization of advanced medical technologies – new diagnostic and preventive screenings, and other high-tech therapies and medical hardware – the majority of which are delivered at hospital on an inpatient or outpatient basis.

Prescription drugs also continue to play a major role in the rising cost of health care, owing to the higher prices of new formulations, the wider application of combination therapies and greater consumer demand for, and need of, medications in all areas of prevention and treatment. About the only area that has seen relative stability is physician costs.

Such increases, when they are part of the costs of running your business, are naturally cause for concern. It only makes sense that employers who want to continue offering their employees access to quality health care become more knowledgeable about how well their money is being spent by the health care carrier they choose.

For example, did you know that virtually all carriers in Florida spend roughly the same percentage of your premium dollars on medical claims – which works out to a medical loss ratio of 76 percent to 80 percent? They also spend about the same percentage, 10 percent to 12 percent, on administering your plan (processing claims, providing customer service functions, covering fixed costs).

And most of the carriers factor in a 2 percent profit margin. The balance of your premium dollars go to the commissions, which carriers pay to the independent health insurance brokers who act as consultants. Brokers are, of course, a critical element in matching clients with carriers. Most small business employers don’t have the time or staff to determine the best package of benefits for their group, shop the market for bids and compare product offerings carefully.

They depend on their broker to explore the different options, give them objective recommendations on the best choices and complete their applications. And brokers’ services may often continue after enrollment. It’s extremely valuable for employers to better understand where their premium dollars go. Don’t hesitate to ask questions to fully recognize why one health plan may be preferred over another.

Employers can exercise some control over their costs by finding a health benefits company that provides the best value for their company’s premium dollars. The way in which you shop a health plan can impact the price.

It’s the same as if your travel agent had a great deal for you – air, car, hotel and meals included. You tell your agent to book it. Coincidently, your neighbors just booked that same trip for $1,000 less through their travel agent.

One agent shopped for the best price, the other agent arranged the trip through his or her vendor of choice. Whether it’s a family vacation, buying a car or choosing a health benefits plan, how you shop can impact your cost.

So why are health care premiums different? Take a closer look.