Conserving Cash: Mining Benefits Programs for Savings
We’ve all heard the old saying – cash is king. That’s more true than ever today for employers struggling with the impact of COVID-19 on their businesses. The more that employers can do to reduce or defer expenses in 2020, the more cash they will have for mission-critical needs like keeping the business running and paying employees. It’s not an overstatement to say that savings opportunities mined in the benefits program can help preserve jobs now and later. It’s time to consider every lever for benefits cost management, even some that may have been unthinkable just a month ago.
We’re helping our clients explore a wide variety of actions. Should we suspend employer HSA funding, or maybe wellness credits? What about programs provided by external vendors, like onsite screenings and other onsite events or programs? Could we try to renegotiate fully insured premiums, given that discretionary care has dropped dramatically? What about discontinuing coverage for out-of-network services? Should we drive savings by narrowing our provider network or our pharmacy formulary? Is it time to consider reference-based pricing? Should we … should we … the list is long and if there was ever a time for out-of-the box thinking, it’s now.
Some potential actions are straightforward, but most will require navigation through compliance, administration, vendor negotiation and employee relations waters. We have a lot of experience working with employers faced with challenging economic circumstances, and are here to help. The cost of inaction could be steep and, for many employers, unsustainable. The time to get started is now.
For more information contact your Mercer representative or:
Eric Grossman
Market Business Leader
eric.grossman@mercer.com
Phone: +1 203 229 6105