ExecutiveBriefcase: The Importance of Benefits Communications
Attention employees: Health care costs are rising. We are cutting your benefits and making you pay more for them. Call the insurance company if you have any questions.
Simple and to-the-point, right? But obviously this is no way to communicate the changes that have been made to the company health care plan. Because health care benefits are so emotionally sensitive, communicating about cuts and changes becomes a difficult message to deliver well.
Yet a well-done communication campaign about health care plan cuts should not leave employees feeling helpless, scared, or outraged. You don't want your work force in that emotional state. Instead, treat employees as smart and important contributors to your organization's success; make sure your health plan communication lets them know that it's a business issue and a business expense, that it's not the insurance company's money, that the most important reason for having the plan-providing catastrophic coverage-is not changing, and that employees can help control the rising expenses.
It's About BusinessLet's be clear. Health care benefits are not being cut and employee contributions are not going up simply because health care costs are rising. For the most part, these changes are being made for another reason-a business reason. The leaders of the organization have decided that the money needed to fund the increasing cost of the health care plan would be better invested in marketing, production, distribution, customer satisfaction, or in some other aspect of the business, including compensation. That's what employees need to hear.
Employees don't often think of heath care plan costs as a business operating expense. Unless the cost of the plan is explained as a business expense, what employees hear is much like, "grocery prices are rising, so we are cutting your pay." Without the business expense perspective, the cuts just seem cruel.
One way to get employees thinking about the money they are spending is to tell them the real price of health care. Ask some employees the price to go to the doctor, and many will tell you that it's only $10 or $20. That's because of the message sent by the $10 or $20 "copay." Also, it may be helpful to describe to them the major choices the company has in reducing the business expenses paid out:
- Reduce the coverage-drop specific types of covered treatments and prescriptions, lower the portion of the cost paid by the plan, etc.;
- Increase the amount paid by the patients who receive services, or the amount taken out of employee's paychecks, or both;
- Limit or eliminate the use of non-discount doctors, hospitals and pharmacies;
- Give employees more choices of plans, and set the employee contribution much higher for options that pay for more frequently used services.
It's Not Someone Else's MoneyYou cannot get too much good health care. So it's great that you can pay for it with some rich insurance company's money. At least that's what many employees seem to think. Some organizations are inadvertently perpetuating the myth that "it's the insurance company's money" by referring to the medical plan as "our medical insurance." In the plans of most mid-sized and larger employers, there's often little real insurance involved (as in paying a small amount to "insure" against a big loss). Actually, the cost of the medical plan is set by the claims that are paid and the HMO membership charges. And the money paying for these comes from an account that gets funded by only two sources-the employer and the employees.
Many employees think that some insurance company is footing the bills because that's what they have been told. The name of the plan contains the insurance company's name, employees get an insurance company card, the claims statement they receive comes from the insurance company, and the claims are paid with insurance company checks. And to top it off, the booklets are filled with insurance company lingo: copayment, stop loss, precertification, and on and on.
Employees should know whose money they are spending. So rename the plan "The XYZ Company Plan," which is funded by the XYZ Company and its employees, with claims processed by the ABC insurance company. And get rid of all the insurance jargon.
The Plan's Primary PurposeThe medical plan's most important role is to provide financial protection against the enormous expense of catastrophic illness or injury. Unfortunately, that is rarely communicated. That's why few employees appreciate the real power of the plan - the millions of dollars it can pay over the lifetime of each enrolled person.
Employees need to know that the key purpose of the plan is not changing. Make it clear: offering employees medical coverage that protects them from the financial devastation of a catastrophic medical condition is the most important element of the organization's employee benefit strategy.
Involve EmployeesEmployees can help control the costs, if they know how to avoid the expenses and spend the plan's money like it's their own. This is especially important, and effective, if the company offers a consumer driven health plan, with a high deductible PPO Plan and an underlying HSA or HRA in place to pay the first dollar coverage. Here are some of the things they can do:
- Get checkups and don't ignore a health problem;
- Use emergency rooms only for emergencies;
- Live healthy-exercise, eat well, wear seatbelts, avoid tobacco, etc.;
- Take advantage of costs savings-use network providers, ask for generic alternatives for prescription drugs, etc.;
- Talk to your doctor;
- Ask what you can do to improve your health;
- Describe past illnesses, medicine you are taking, and current symptoms-to help avoid a misdiagnosis;
- Find out how the proposed treatment or medicine with improve your condition, how much it costs, if there are any equally effective yet less costly approaches, and the possible side effects;
- Ask what foods liquids or other medicines you should or should not take with any new medicine;
- Always ask "why"-it's your body, your health, and mostly your money;
- Learn about your condition-use the Internet or library to find out what other health professionals have to say about your condition. Become your own advocate, but not your own physician;
- If you aren't satisfied, act like a consumer-be sure the treatment is working and is worth the price that you and the company are paying for it.
Obviously, no one will be happy with the health care plan cut news. But you can keep the negative reactions to a minimum-and earn your employees' trust-by focusing on the business issues, the strength of plan in paying the huge costs for catastrophic medical conditions, and by making sure employees know they have the responsibility and opportunity to help control the costs.