How to Achieve Stable Health Insurance Premiums

By Ryan Donovan

Six tactics for keeping rates predictable

Health care costs inflate approximately 7% annually and there aren’t signs of that slowing down anytime soon. While medical inflation rates are largely out of an employer’s control, we can make significant impacts to our health plans by focusing on efforts to stabilize health insurance premiums.

Here are six actions you can take to help stabilize health insurance premiums for your city’s employees. Your employees will know what to expect and how to budget their personal finances — building trust and appreciation. Your city, too, will be able to put its best foot forward with budgeting for benefits.

1 Create a culture of wellness. Typically, healthier people have fewer claims, which will help keep your premium rates down. Use the wellness resources available from your health plan provider to build a culture of wellness and get employees excited about and engaged in making healthier lifestyle choices.

• Establish a volunteer wellness committee to plan and implement programs and activities that make sense for your staff. Designate time and a budget, and encourage the committee to work with your health plan’s wellness program manager.
• Incentivize engagement by tracking participation in wellness programs, activities, and events. Reward participants as you’re able. Even a homemade traveling trophy can quickly become a coveted prize.
• Celebrate and highlight wellness engagement and achievements by sharing staff milestones and success stories. Make it a regular agenda item for all-staff meetings or a regular part of all-staff communication.

2 Prioritize proactive and preventive care. Choose a health plan provider that makes it easier for your employees to be proactive about their health. Ideally, your plan includes these preventive care benefits at low-to-no charge:

• Preventive prescription coverage.
• Telehealth, as a convenient alternative to office visits and mental health consultations.
• An employee assistance program (EAP), with access to free or reducedcost mental health consultations as well as life coach services.
• Digital coach support, for helping employees manage key medical cost drivers, such as weight/obesity, diabetes, and hypertension.
• Annual on-site biometric screenings with flu shot opportunities.

3 Consider joining a joint-risk self-insured pool.

A government risk pool (aka, a joint-risk self-insured pool) is a type of health plan provider that exists to serve and bring stability to the public sector market. Choose one that can demonstrate a history of financial stability and stable premium rates.

4 Increase the number of people enrolled on your plan.

More eligible people on the plan spreads out the claims cost and keeps future premium rates lower. Ideally, it’s full-time employees and their dependents that you want on your plan.

• Are there union groups that are on their own health plan? Can you work with them to bring them on to the city’s health plan?
• Are there small changes you could make to your plan to attract more eligible participants?
• Encourage participation in the employee-sponsored health plan. Avoid cash-in-lieu of health benefits as that incentivizes employees to opt out of the plan.
• Compare and contrast Medicare supplement options for retirees age 65-plus that are part of your plan. The combination of Medicare plus a supplement might provide a better price and coverage than your city-sponsored health plan alone.

5 Offer consumer-driven health plans. Another term for a consumer-driven health plan is a high-deductible health plan (HDHP), which qualifies employees to have a health savings account (HSA). Research shows HDHP claims costs tend to be lower. This is because employees know they’ll pay 100% of the care costs until their deductible is met, so they shop around for care and become more selective care consumers.

6 Evaluate your strategy annually.

Change is constant in the health insurance world. Your benefits strategy needs to keep up and stay relevant to maintain and grow participation.

• Every year, look at what your city pays toward employee premiums and contributes to HSAs and adjust accordingly to inflation and potential premium increases.
• Compare your strategy to benchmark data for similar employers to stay competitive.
• Avoid big changes to benefits from one year to the next as it can be very disruptive to premiums (and your staff). Instead, plan and implement changes gradually.

Ryan Donovan is manager of insurance solutions at Sourcewell (mn.sourcewell.org). Contact: Ryan.Donovan@sourcewell-mn.gov. Sourcewell is a member of the League’s Business Leadership Council (lmc.org/sponsors).