Battling the high cost of employer-provided health care: challenging, but possible

Published 4:00 pm Monday, January 24, 2011

Facing continually rising health insurance costs, businesses are searching for ways to provide medical coverage to their employees without “breaking the bank.”

Some companies have come up with their own innovative programs that reduce their overall health insurance costs, while maintaining the same level of coverage – or, in some cases, offering a higher level of health care service.

Bank designs creative insurance program

“We believe that having healthy employees is important,” explains Joe Schulte, executive vice president of Clatsop Community Bank. “That’s why we see health insurance benefits for our workers as extremely important.”

For that reason, the Seaside-based financial institution provides one of the best health insurance plans of any small business in the area, Schulte said.

Since it first opened its doors nearly three years ago, locally-owned Clatsop Community Bank, which also has a branch in Astoria, has paid the annual deductible for its 16 employees and their families – up to $2,500 for an individual or $5,000 for a family – through a Modified Health Savings Account. Coupled with the insurance’s low co-pay feature and full coverage for annual physical exams, the program translates into little out-of-pocket expense for most bank employees and their families.

Schulte said the bank purchases its health insurance on the open market and opts for a higher deductible as a way to keep down the cost of the plan. Even though the bank pays the deductible for the employee, Schulte said the company still realizes a savings.

“It seems to work out financially (for the bank) through lower premiums,” he said. “It’s a win-win-win for our employees, their families and the bank.”

Intel opens worksite medical clinic

Intel Corporation has taken another route in trying to reduce health care costs for the company and its employees.

The world’s leading semiconductor chip maker in January opened its own on-site medical center to serve its 5,700 workers at its Jones Farm campus in Hillsboro. Intel opened a similar medical center at its plant in Arizona in 2008.

The 5,000 sq. ft. Health for Life Center at the Jones Farm campus includes an examination room and a physical therapy area along with two massage rooms. The center is staffed and operated by Walgreen’s Take Care Health Systems, which is a partner with Intel in the program. Intel has operated a similar clinic at its plant in Arizona since 2008.

Officials of Walgreens, which operates nearly 400 worksite clinics across the country, says on-site clinics generally save $2 to $4 for every dollar invested, primarily through economies of scale. As more patients use the facility, the lower the cost per patient.

Many of the clinic’s services are free to employees, and the clinic provides generic drugs with no mark-up, which means additional savings to workers.

While the clinic’s use is strictly voluntary, and employees can still use their current health care provider, Intel officials say they hope that eventually all 5,700 workers at the Jones Farm campus will see the advantages of the workplace clinic in both cost savings and convenience.

For most, no easy way to rein in insurance costs

While Clatsop Community Bank and Intel are just two examples of firms that have found innovative ways to provide health care benefits for their employees while keeping costs for those benefits in check, they are the exception, said Terri Opsahl, employee benefits specialist and insurance broker for Knutsen Insurance in Astoria.

“For most companies there is no real solution out there,” Opsahl said.

And the cost of health care insurance for employees is only going to increase as the full impact of the new federal health care reform act takes effect over the next several years, she said.

For example, Opsahl said the average health insurance premium will increase about 10 percent to offset a requirement in the new law that insurance companies must pay all costs associated with age-appropriate preventative medical screenings, such as prostrate exams and colonoscopies.

And while the new law offers tax incentives to help offset some of the additional costs, the benefits do not cover all businesses and have a limited duration, she noted.

Additionally, companies on the North Coast pay a premium of 5 to 10 percent for health care insurance because of the limited medical resources in the area, Opsahl pointed out.

“There are a lot fewer options in rural areas,” she said. “That makes the cost of care more expensive.”

But Opsahl said there are some things companies can do to make sure they are getting the best coverage at a price they can afford.

She offers the following advice:

Shop the market. With only a handful of insurance companies providing employee health care policies in the area, make sure you or your broker obtain quotes from each carrier.

Ask employees to share in the cost of the premium. This can offset any increase in the cost of the insurance without raising the deductible or co-pay the employee pays.

Higher deductible and/or co-pay can reduce your company’s insurance costs, but will result in increased medical costs for your employees.

Encourage healthier lifestyles by offering employees incentives to join a gym, weight-reduction or smoking cessation program,

Opsahl also emphasized the importance of educating employees about using their health insurance benefits wisely.

As an example, she notes that it costs substantially more to be seen by a doctor in the emergency room of a hospital than to see your own physician or go to an Urgent Care Clinic for a non-critical illness or injury.

“It’s important that employees understand their benefits and the ways to keep their medical expenses down.”