Engineering Inc. - January/February 2009 - 19

(Continued from page 18) “When employees buy that drug for the first time, we want everybody to know what that really costs,” says Wood. That way, they’re more likely to opt for a generic version. “That’s made a huge difference in our claims for prescriptions,” she says. HMB also promotes economical mailorder prescriptions for 90-day supplies of drugs that receive volume discounts. Many firms consider personal wellness a top priority. “Some upfront work will, in the long run, save on costs,” says John Spina, vice president of administration at C&S Companies in Syracuse, N.Y. C&S even uses a wellness coordinator to offer employees tips on staying healthy and keeping costs down. Tools include a monthly newsletter with articles about health insurance costs and how generic drugs can save money. HMB recently built a gym and workout facility in its basement and adopted a healthy approach to office life. “We don’t typically buy doughnuts. We buy bagels or something else a bit healthier when we have a meeting,” says Wood. Keeping employees informed helps them understand the struggles employers T Picking a Plan wo of the trendiest tools for stemming cost increases are high-deductible health plans (HdHps) and associated health savings accounts (Hsas). Industry estimates put the number of Hsas in this country at about 6 million. But c&s companies is finding that employees often balk at deductibles of $5,000 or more for individuals even when the company pays the full HdHp premium for individuals and families. as an added incentive, the firm contributes money each January to an employee’s Hsa. By contrast, c&s pays 85 percent of the premium for individuals and 55 percent for dependent coverage when employees choose the company’s Blue cross Blue shield alternative. participants in both plans have filed fewer claims in recent years, so while c&s’s overall rates jumped 8 percent in 2009, it enjoyed an 8 percent decrease the previous year and level costs in 2007, says John spina, vice president of administration. Lamp, rynearson & associates is bracing for a 20 percent increase after seeing stable rates for 2008. for two years, the company has offered a high-deductible, Hsabacked plan that pays half of the premium for individuals and families. employees can also choose a more traditional ppo. president michael mcmeekin believes highdeductible plans help dampen cost increases, though it’s hardly an industry panacea, he says. “It’s just lowering the magnitude of the increases.” HmB eschews Hmos, ppos and high-deductible plans in favor of a hybrid self-insurance approach that uses a third-party catastrophic-insurance provider for employee claims greater than $45,000. all other claims are handled by HmB. This alternative gives HmB flexibility when negotiating new rates with insurance carriers, says cfo Karen Wood. “With a traditional Hmo or ppo, we found that your company’s claims experience really is a non-factor. you get the same percentage increase that everybody else in that region or that pool is going to get, so there’s no benefit for the education or the wellness programs that you implement.” W e’re very open because otherwise employees never realize how much the company is taking on versus how much they are paying. JoHn spIna c&s companIes face. C&S regularly shares information about the rates it’s paying for premiums, overall contributions by employees and projections about rate increases from carriers. “We’re very open because otherwise employees never realize how much the company is taking on versus how much they are paying,” Spina says. “The more information people have, the more they understand. Finding out how much the company was paying made them feel a little better” about rate hikes. Some companies now are less likely to stick with the same insurance carrier in the hope a long-term relationship leads to lower rates. Though Lamp, Rynearson & Associates typically avoids annual shopping for quotes, McMeekin says the firm is rethinking its strategy. “You are forced to play that game because insurance companies seem to have a strategy quoting low to get you in and two or three years later hitting you with huge increases,” he says. McMeekin’s company also is considering new incentives aimed at lowering insurance rates. Under consideration is a possible plan to reward employees who opt for coverage through a spouse’s employer. Long-Term Answers Budget-conscious firms acknowledge that the efforts of managers and employees to contain rising costs likely will not be a long-term solution to the health care dilemma. Some even question why employers are involved in the health care discussion at all. “More and more I ask myself, ‘Why is health care tied to employment?’” says McMeekin. “Our business is providing infrastructure for the public, but more and more we have to get into the health care business. I just ask myself, ‘Are we doing the right thing?’ ” n Alan Joch is a business writer based in Francestown, N.H. JaNuaRy / FEbRuaRy 2009 ENGINEERING INC. 19

Engineering Inc. - January/February 2009

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