Recession Proof Benefits (2024)
Whether you think we’re headed into a recession or not it’s important for employers and plan sponsors to evaluate their approach to procuring and managing benefits.
With that in mind here are 15 recession proof ideas for group benefit plans:
“Benefits Modernization” (verb), the act of ensuring benefits are up to date based on a plan’s evolving needs; ensuring appropriate coverages are in place, with access to the latest market innovations.
2. Invest In Education
Benefits are typically the second biggest expense after payroll.
Whether you’re an employer (or plan sponsor) don’t overlook opportunities to learn more about the industry and how benefits work. It's why LBG Advisors, LLC designed this educational conference specifically to meet this need.
3. Evolve With Tech
Evolve with Tech or Tech will evolve you. Understand and embrace how tech is integrating and impacting benefits, from data analytics, AI/Open AI, ChatGPT and more.
4. Review Existing Relationships
Representation matters. Are your plan’s interests aligned with those that are representing you? Spoiler alert: the answer may surprise you.
5. Why Rent When You Can Own?
Analogous to “owning” vs. “renting” a car. When you own your health plan (vs. renting someone else’s health plan) you control the components, design, and management forward. You're also able to retain the reserves.
But, do you really want that level of control?
6. Consider Self-Funding Medical Benefits
Over 74% of plan participants across the country receive benefits through self-funding.
In most scenarios self-funding is the best long-term approach to controlling costs. But there are different ways to design self-funded plans, so it's important to understand all the options. Many think self-funding is too risky…do you?
7. Revolutionize Well Being
Redefine your approach to mental health with improved workplace programs targeted towards individual participants needs with access to broader national networks.
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8. Don’t Get Too Comfortable
Have you maintained the same approach for years? Does your plan need “Benefits Modernization” (see point 1)? Don’t fall into plan stagflation and miss other opportunities on the market.
9. Use Group Buying Power For Supplemental Benefits
Voluntary Benefits (e.g., Critical Illness, Accident, and Hospital Policies) are a nice way to supplement traditional benefits with programs that assist participants’ out of pocket expenses.
10. Offer Trendy Benefits
Dog and Cat Pet Insurance are some of the fastest growing voluntary programs in the market. Identity theft and legal programs are more examples of other value-added programs that can be made available to plan participants (at very reasonable costs).
11. Reduce High-Cost Specialty Medications
For most health plans Specialty Rx makes up 50% of the total Rx spend. Effective formulary management is important, but other high specialty prescription costs programs can be layered in including Coupon Intercept programs, Reference Based Pricing, Alternative Funding and more.
12. Get Your Rebates
Did you know that every time a brand or specialty medication is filled, a corresponding rebate is generated?
If your plan is self-funded and you work with a PBM (Pharmacy Benefit Manager) that allows it, your plan can recoup these rebates in the form of a payment or credit.
13. Consider Alternative Therapies
Add orthobiologics into your health plan as an alternative to high cost orthopedic surgeries.
Overall costs (to both plan and participant) are reduced significantly and recovery time can be much quicker.
14. Communicate Through Cellular
Everyone's got one. Consider an app to communicate your benefits plan info. Text messaging is also a great way to communicate with participants through their phones (text messaging is over a 90% response rate vs. 8% with traditional email).
15. Change Your Approach To Networks
Medical: Why limit access? Consider moving from traditional networks to just paying a fair price to all providers/facilities in the area based on a known reference. You can also set up direct pricing agreements in some instances.
Dental: Increase your dental plan’s out of network reimbursement percentage (e.g. 99th percentile) to eliminate the chance of balance billing, allowing your participants to seek care from any dental provider.
Trustee at Vancouver Fire Fighters Union Health and Welfare Trust
1yThese are great strategies for union groups; and certainly not out of reach for any Local union that wants to provide value to their members. Whether you and the employer sponsor the plan together, or if the Union carves out an sponsors the plan alone, the financial benefits and the medical benefits will both be better than buying an "off the shelf" plan from a fully insured carrier. You earn the $$ and you should be in the drivers seat about how to spend it.
I especially like #6 and #11. We have utilized these two sectors to reduce our plan costs significantly since changing over to a PSF plan about 11 years ago. Annual evaluation of your plan can ultimately save the organization thousands of dollars if you attack the right areas.
Fire Captain
1yGreat stuff as usual Jason. I’ve been catching up and educating myself on many of your old articles. Thanks for putting these out there!