3 Defensive Plays Against the Rising Cost of Employer-Sponsored Health Care

Providing health care coverage for your employees is a highly desired benefit. It’s also a substantial investment with rising costs. In 2023, the annual average cost of employer-sponsored health care for family coverage was $23,968, with the average employee paying $6,575 toward that coverage.* How can ministries minimize these costs? Follow these three defensive plays to combat expenses with a long-term strategy in mind.

Defensive Play #1: Have a Long-term Strategy — But Do Market Checks

To keep costs in check, build a relationship with a trustworthy provider. Then, ask the right questions. What has your group’s claim experience been like historically? Is it largely catastrophic or pharmaceutical? What strategies can you use to bring claims down? These conversations help gauge your needs and develop a strategy.

As your policy nears its end, don’t over-shop. Carriers will notice if you switch every year; therefore, you may not get the best rate. Don’t be bought by a cheap first-year quote to experience costly increases afterward. Do market checks, but keep in mind that a moderately lower price may not be a reason to switch providers because there could be a difference in the value of the plan. Shop responsibly and know the value of your benefits.

Defensive Play #2: Evaluate Your Plan Strategy

Evaluate the culture and medical needs of your employees. Is your staff young? Tenured? Or both? Look at what’s driving the claims experience and adjust your strategy to offer a plan that fits those needs.

Look at a long-term strategy versus year-to-year to understand your needs. Your demographics may change when people retire or after a church plant is sent off on its own. Review these demographics every five years to see if your ministry has grown or changed.

Explore Non-Traditional Coverages

See if new strategies could work for your population. Consider the following options:

• Health Reimbursement Arrangement (HRA): This is an employer’s agreement to reimburse the employee for some medical expenses. This strategy is designed to offer a high deductible health plan and then lift some of the burden of the deductible off the employee. With an HRA, the employer owns the funds, and there must be a claim before the employer makes a reimbursement. So, if you have a healthy staff, you may not see as many claims and can roll over unused dollars into the following year.
• Health Savings Account (HSA): With an HSA, the employer gives dollars to employees for qualified medical expenses. In this case, the employee owns the dollars. This is to be used with a qualified high deductible health plan (HDHP) where employees pay for medical costs out-of-pocket. These plans have no upfront coverage in the form of copays and are usually less expensive than PPOs. Employees can also make their own contributions to the tax-advantaged HSA. The funds are contributed tax-free, can be invested to grow tax-free and can be used tax-free for qualified medical costs. Use our Health Savings Accounts Employer Benefit calculator to estimate the value of setting up this type of plan.
• Cost-plus Plans: Also known as referenced-based pricing plans, cost-plus plans determine set prices for each health care service. There are no networks, so the employee goes to their provider knowing exactly what the plan will pay, regardless of the provider’s charges. Work with a trusted advisor with industry experience for this type of plan.
• High-Performance Network/Narrow Network: These networks are centered around large cities to find the best providers at the best price. The goal is to give employees the highest level of care the first time at an affordable price to maximize cost and care efficiency.

Leverage Scale

Utilizing the benefits of larger populations can help minimize the cost of employer-sponsored health care. Learn how to take advantage of scale, such as a large church implementing self-funding or a small church joining a large population in a church health plan. GuideStone’s health plans are self-funded church plans, allowing us to create plan designs in alignment with biblical convictions. It also allows us to scale benefits across our population of thousands of church employees, which passes savings on to you.

Defensive Play #3: Prioritize Employee Education

Knowledge is power. Help your employees understand how their plans operate so they can make money-saving choices. Programs such as telemedicine are often built into plans to help keep claims down, so teach your employees how to take advantage of their options. Utilizing these programs can lead to lower long-term health care costs for the employer.

For example, GuideStone® plans offer multiple programs, including:

• Teladoc^®: When employees know how to enroll and use Teladoc, they’re less likely to show up at an expensive emergency room in the middle of the night.
• SmartShopper^®: Employees get paid to use SmartShopper to shop for quality medical services. Cash rewards incentivize employees to select a quality provider who offers a service at a lower cost.
• Twin Health: Twin Health uses Whole Body Digital Twin™ technology to help individuals heal their disrupted metabolism and reverse their type 2 diabetes.

Educate employees on other ways to save, such as using generic prescriptions or knowing when to use an urgent care facility versus an emergency room. It can also be helpful to show employees their total compensation. In addition to their salary, show how dollars are spent on their behalf for health coverage.

Identify Fraud, Waste and Abuse

Providers should work to identify fraud, waste and abuse to help keep costs down. Are there duplicate claims? Is an employee seeking treatment that’s not right for them? Is fraud occurring? Your provider should run reports, investigate issues and take action.

Who is your advocate for reducing health care costs?

Someone should advocate for your ministry to help lessen the strain of inflation and the rising cost of employer-sponsored health care. At GuideStone, we are that advocate. We come alongside you to enhance financial security and resilience for your ministry and your employees. Find a health plan that aligns with your biblical values and offers money-saving strategies. For more information, contact us at Insurance@GuideStone.org or 1-844-INS-GUIDE (1-844-467-4843), Monday through Friday, from 7 a.m. to 6 p.m. CT.

GuideStone^® welcomes the opportunity to share this general information. However, this article is not intended to be relied upon as medical or legal advice.

*kff.org/report-section/ehbs-2023-summary-of-findings