Helping Employers Combat Rising Healthcare Costs

» Articles » Employment & Labor Articles » Article

October 04, 2017

Rising Health Care Costs

Helping Employers Combat Rising Healthcare Costs:

Both companies and employees alike are reeling at the constantly rising costs of healthcare. It seems like healthcare costs more and the benefits cover less every year. For some companies, this can mean healthcare costs for their employees are soaring out of control. The new legislation requires virtually all small-to-mid-sized corporations and larger to provide health coverage for their employees, so there is not many employers can do in the way of not offering healthcare coverage. Few employees will work at a company that doesn't offer benefits as well.

So, what is a company to do?

Continue reading below

FREE Employment & Labor Training from Lorman

Lorman has over 37 years of professional training experience.
Join us for a special report and level up your Employment & Labor knowledge!

Employee Discipline and Termination
Presented by Crystal L. Norbeck

Learn More

Controlling the Rising Costs of Healthcare?

The only way to go to be able to continue to provide quality healthcare coverage and decent benefits to employees are for employers to control their costs, as well as the costs to the employee of what it takes to provide health care coverage for their workers. Some ideas to keep in mind that may help keep healthcare coverage affordable for companies include the following:

  • Use Healthcare Cost As a Driving Factor: Many companies say that that increasing healthcare costs for their workers are driving the company to cut back in other areas. Understanding the cost of healthcare can help employers make wiser decisions in other fields of business to save they money necessary to provide employees healthcare while still maintaining profit margins.
  • Greater Emphasis On Consumer-Driven Plans: Many companies are turning to consumer-driven plans that provide healthcare reimbursement (HRA) through an account that provides customers with the money they are entitled to for the healthcare treatment they have received. These programs can effectively lower the overall costs of providing employees healthcare while still providing quality coverage that employees need. Many basic benefits are provided through these HRA accounts as well ranging from basic wellness checkups each year to options for flu and other common vaccinations, making these comprehensive plans that all employees can find helpful.
  • Increased Employee Cost-Sharing: Many companies have no choice but to pile more costs onto the employee. Making the employee pay a bigger percentage of their healthcare costs is not ideal, but when business budgets run tight sometimes this is the most feasible option for the company when they have no more room in the budget to spare.
  • Dependent Management Strategies: Employers can save a lot of money in the way they manage dependents that employees claim on their healthcare plans including spouses and children. Many companies are cracking down on dependents on healthcare plans and found that between 5 & 15% of dependents are not actually even eligible for the healthcare plans they are on. By refusing to pay for those benefits for ineligible dependents the company can save quite a bit of money.
  • Strategic Vendor Management: Some companies are experiencing such astronomical healthcare costs that they are doubling down on the vendors who are not producing at quota or company partners not doing their share and either finding new vendors or refusing to supply healthcare costs to sub-performing affiliates. It helps cut the costs for the company for people who are not performing their job to the company's satisfaction.


Some of these strategies may seem a bit "cut-throat" or even "cruel", however companies are finding themselves with their backs up against a wall with costs. Sometimes you can't cut costs further in any other department and have no choice but to hit employees even if it hurts. Until the healthcare dilemma, we are facing is fixed, sadly, this likely will be the continuing trend moving into the future.

It's how companies maintain profit margins and keep costs down. There really are not too many other ways they can do it.

The material appearing in this web site is for informational purposes only and is not legal advice. Transmission of this information is not intended to create, and receipt does not constitute, an attorney-client relationship. The information provided herein is intended only as general information which may or may not reflect the most current developments. Although these materials may be prepared by professionals, they should not be used as a substitute for professional services. If legal or other professional advice is required, the services of a professional should be sought.

The opinions or viewpoints expressed herein do not necessarily reflect those of Lorman Education Services. All materials and content were prepared by persons and/or entities other than Lorman Education Services, and said other persons and/or entities are solely responsible for their content.

Any links to other web sites are not intended to be referrals or endorsements of these sites. The links provided are maintained by the respective organizations, and they are solely responsible for the content of their own sites.