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By Don­na Mar­shall
Chief Exec­u­tive Offi­cer

Accord­ing to Ben­e­fits Spe­cial­ist Mag­a­zine, “the HR (human resources) com­mu­ni­ty has very lit­tle insight, wis­dom or resources on the val­ue they should expect from their insur­ance advi­sor.” But the prob­lem is actu­al­ly deep­er than that: How can you pick a top-notch insur­ance advi­sor or bro­ker if you don’t know what they should be buy­ing for you?

If this res­onates with you, pay atten­tion.

For­mal edu­ca­tion vs. on-the-job train­ing

Many col­leges offer degrees in Human Resources, but most of the cur­ricu­lum focus is on gen­er­al­ist needs, such as employ­ee hir­ing, train­ing, reten­tion, and com­pli­ance with labor laws. What about top­ics to sup­port under­stand­ing the fun­da­men­tals of the health­care mar­ket­place and health­care lit­er­a­cy?

The Col­orado Busi­ness Group on Health (CBGH), a not-for-prof­it employ­er-led coali­tion, con­duct­ed a focus group in 2016. Mem­bers of the CBGH tend to be well-informed in ben­e­fits and most pur­chase health­care for at least 1,000 employ­ees. They con­firmed that they had learned “on the job” and their con­tin­u­ing edu­ca­tion came from their bro­kers.

Health ben­e­fit admin­is­tra­tion is a sophis­ti­cat­ed and com­pli­cat­ed endeav­or. It’s about pro­cure­ment and con­tract­ing, HR infor­mat­ics, and com­mu­ni­ca­tions. And it affects people’s lives: More than 150 mil­lion Amer­i­can work­ers and their fam­i­lies get health insur­ance through their employ­ers. And since 2007, pre­mi­ums have grown 55%. Deductibles, which were vir­tu­al­ly unheard of 25 years ago, are now aver­ag­ing near­ly $1,500 per per­son — and that’s after pay­ing $5,700 towards their pre­mi­um for fam­i­ly cov­er­age.

Health­care is com­pli­cat­ed!

Why is health­care pur­chas­ing so dif­fi­cult? Some Chief Finan­cial Offi­cers point to the dif­fi­cul­ty of nego­ti­at­ing for ser­vices they don’t deal with on a fre­quent basis. Human resource exec­u­tives are often unwill­ing to risk the wrath of dis­grun­tled work­ers — or their own boss­es — if the health plan is changed or choice of providers is reduced.

Some pur­chasers still buy into the notion that there is a pos­i­tive cor­re­la­tion between price and qual­i­ty, when rig­or­ous aca­d­e­m­ic stud­ies debunk that idea. Accord­ing to the NORC Cen­ter for Pub­lic Affairs Research, six in 10 employ­ers think plan qual­i­ty rat­ings are impor­tant, but nine in 10 are unfa­mil­iar with what those met­rics are. CBGH employ­ers also thought qual­i­ty was impor­tant, but rarely used this type of met­ric in their pur­chas­ing deci­sions. “You can’t fight city hall” is the final cry of despair from many pur­chasers, as they con­front the pow­er­ful health­care indus­try.

Pur­chasers often turn to a top­ic that is more under the employer’s con­trol: Well­ness. Well­ness pro­grams abound and are often tied to a health plan. Often­times, an employ­er feels good about offer­ing this ben­e­fit to its employ­ees, and when the cam­paign is thought through and well-imple­ment­ed, it can help the work­force engage in health­i­er lifestyles.

But well­ness is a small part of the expen­di­ture, and there is no evi­dence that well­ness pro­grams achieve a return on invest­ment. Employ­ees enjoy them as a perk but employ­er cost shar­ing for health plans is the behe­moth.

Edu­ca­tion changes the game

Pur­chasers often believe that their ben­e­fits advi­sor will give them the best options, but often­times they end up set­tling for rate increas­es that far exceed wage growth in their own pay­checks. As long as the rest of the mar­ket is pay­ing dou­ble-dig­it increas­es, it’s okay. Ben­e­fits con­sul­tants have even been heard say­ing “Employ­ers don’t need to win at ben­e­fits, just play the game.”

So how can you change this? Use Knowl­edge Ben­e­fits and online health insur­ance class­es to edu­cate your­self on how the mar­ket­place real­ly works. Under­stand plan offer­ings’ options and the val­ues (and pit­falls) of health­care con­sumerism. Take the time to real­ly do a cost-ben­e­fit analy­sis and work with oth­er health­care pur­chasers (employ­ers, trusts, and unions) to explore solu­tions that the mar­ket­place (YOU!) should be offer­ing to its cus­tomers. The more you know, the bet­ter deci­sions you can make when design­ing an effec­tive ben­e­fit pro­gram.