3 Ways to Build an Effective Employee Benefits Package

By Jill Age

The rising cost of healthcare, a lack of transparency around services and pricing, evolving workforce expectations, and the complexity of the benefits ecosystem have made it increasingly difficult to offer effective benefits that employees consistently use and value. And yet, a strong benefits package is key to employee engagement and retention. In fact, more than 70% of employees would change jobs for better benefits.

A strong benefits strategy incorporates creative resources, funding arrangements, and innovative ideas that help manage your plan and mitigate costs. With the right roadmap to guide your course, you’ll be well on your way to a more transparent, cost-conscious, employee-specific benefits package that serves your workforce’s needs, appeals to your organization’s risk appetite, and helps your bottom line.

Explore these three areas for a sound benefits package that works for your employees
and your organization:

1. Funding transparency: Explore self-insured vs. fully insured plans

You know exactly what drives your electric bill in the summer — the AC and fans are running. The question is: How can you achieve that same level of predictability and clarity regarding your employee healthcare costs?

With a fully insured plan, the employer pays fixed premiums to an insurance company that assumes the financial risk of paying out claims. This type of traditional insurance funding arrangement makes it difficult to understand the details and nuances of where your benefit dollars go.

Meanwhile, employers that opt for a self-insured health plan assume direct financial responsibility for the costs of enrollees’ medical claims and pay out-of-pocket for claims as they are incurred. Many employers opt to include a stop-loss contract to mitigate their overall risk, which insures them against catastrophic losses under the plan. With a self-insured health plan, your business owns and has full access to claims data, and you have complete transparency into where and how your medical and pharmacy benefits dollars are being spent. Self-insured plans enable greater flexibility and control over plan design, claims administration, cost savings, and cash flow.

Take Action:  First, determine your ideal package eligibility requirements, coverage, exclusions, cost-sharing, policy limits, and retiree benefits. Once you have clarity around your desired benefits package factors, weigh the flexibility and lower average cost advantages of a self-insured plan against the increased risk and administrative responsibilities of a fully insured plan to help make your decision.

2. Employee engagement: Go beyond standard offerings to provide more value

Stay committed to ongoing, direct, easy-to-understand communications about your offerings to promote employee awareness. Hold trainings, provide short infographics or video clips, and share real employee stories to convey the value of your benefits offerings across multiple channels. Have a centralized benefits hub where employees can easily access all benefits and hold regular HR office hours.

Consider implementing incentive-driven programs incorporating rewards to promote employee engagement, improve productivity, and boost morale. This approach links activities like regular exercise, doctor visits, and healthy living to immediate financial benefits, resulting in a more engaged and satisfied workforce.

Take Action: There are several low and no-cost benefits to consider adding to your benefits package that can enhance employee morale, wellness, work-life balance, and quality of life, such as:
 

• Flexible work arrangements, vacation policies, and summer hours
• Casual dress code
• Wellness programs and resources
• Professional development and mentorship programs
• Employee recognition and assistance programs
• Financial education workshops
• Paid volunteer time

Administer a company-wide survey to poll employees on the types of benefits they value most, and what offerings they would like to see included in your offerings. Use this data to guide your roadmap for future benefits offerings.

3. Pharma spend: Empower employees with tools to navigate climbing costs.

Prescription drug spending continues to accelerate, reaching $805.9 billion in 2024 — a 10% jump from the prior year. That growth isn’t slowing, with experts projecting an additional 9-11% increase in 2025, pushing spend close to $900 billion.

The utilization rate of costly specialty drugs is also on the rise, driven by factors that include an increased prevalence of complex medical conditions, medications treating more conditions, providers’ increasing comfort level in prescribing medications, and increased patient demand for specialty medications.

Employers typically have little to no visibility into what drugs are driving up costs, where Pharmacy Benefit Manager (PBM) rebates are going, or what they can do to reduce pharmaceutical costs for the organization and their employees. When companies have insight into their business’s pharma spend, they can educate employees on ways to improve cost savings and care management.
 

Take Action:

• Regularly review PBM contracts to determine where rebates are being applied and consider “pass-through” savings, where price reductions are passed along directly to employees.
• Perform ongoing pharmacy claims audits to improve your organization’s transparency in pharma spending. Consider an online mail-order program or a prescription discount program that offers savings.
• Hold virtual or in-person trainings about generic medications and biosimilars for employees to learn ways to circumvent rising pharmaceutical costs.
• Provide resources for understanding medication options and effectiveness, offer support services for medication adherence and management, and encourage employees to order 90-day supplies of prescriptions.
• Work with your broker to educate employees on how to search for medication costs on your carrier’s portal, and encourage employees to  request alternative, generic options from medical providers if the costs are high.

Leverage your broker partnership.

When you partner with a knowledgeable, trustworthy broker, you can introduce new strategies and execution tactics to strengthen your benefits offerings.

Contact us today to learn more about building a strong and sound employee benefits package.