Healthcare costs in the United States is rising every year, and, along with that, so is the cost of health insurance. When employers fund insurance for their employees, they bear at least some of the burden of the increasing costs. The price tag may also increase when the company workforce frequently utilizes their insurance for more than the preventative services included.

Much focus is given to the benefits of wellness programs in the workplace. These programs provide avenues to improve the health culture in a business, employees’ morale, and overall health. In doing so, the best wellness programs may indirectly help lower employer healthcare costs, though there are several factors that contribute to increased healthcare expenses.

What Causes Healthcare Costs To Rise?

The biggest contributor to high healthcare costs is unhealthy lifestyles. Chronic disease is responsible for a majority of the deaths that occur each year, as well as the largest percentage of the price tag associated with medical care. A more sedentary lifestyle leads to chronic disease, and society has, on the whole, become far less active. In addition to inactivity, another significant factor in chronic disease is an increasingly unhealthy American diet. These two elements of modern society play a primary role in driving up medical costs. Other factors include:

• Technological innovations
• High physician salaries
• High drug costs
• Lack of coordination in care
• Administrative costs

What Are Some Strategies To Reduce Healthcare Costs?

When confronted with the likelihood of annual increases, many business owners wonder how employers can reduce healthcare costs. There is no single approach that works for all companies. Each option has its pros and cons, so careful consideration is necessary when reviewing which strategies are most feasible for your organization.

Insurance Options

Insurance is one area where many companies look to lower their costs. For smaller businesses, getting rid of health insurance altogether is a possibility. Larger companies may consider this as well, though they have to pay the tax penalty each year insurance is not offered. In dropping the health insurance benefit, employees are left to procure their own plans.

If you would rather not eliminate insurance, there are other possibilities that can lower your expenses. One option is to elect coverage with high deductibles. Another is to change carriers, negotiating a better rate as part of the deal. There is also the potential to go the route of self-insurance, where your business pays directly for the healthcare of your employees.

Worksite Options

Wellness programs can impact how much employers pay for healthcare costs if they improve the health of employees. Since chronic disease is the number one driver for increasing healthcare costs, implementing programs that help workers get and stay healthy can actually lower company expenses for healthcare. Healthy employees require less medical care than those who are unhealthy, which results in healthcare savings for your company.

About Haughn & Associates 

Founded by Michael Haughn in 1986, Haughn & Associates is a full-service, family-owned, independent insurance agency based out of Dublin, Ohio. H&A strives to provide the best possible price and unique insurance solutions across a myriad of industries, including construction, IT, Habitation & Commercial Property, Agriculture, and Engineering. Devoted to providing the best of business insurance, life and disability insurance, personal insurance, employee benefits, and bonds, H&A is proof that success lies in long-standing client relations and satisfaction. To learn more about how H&A can be of service to you, contact us at (877) 802-2278.