A well-run benefits package offers a competitive advantage in the current marketplace and will become even more critical in the era of health care reform. Health care costs will continue to rise, even as health care reform unfolds. For the first time ever, the average annual per-employee health care spend in 2010 will surpass the $10,000 mark.2 As a result, employers will continue to look for ways to cut costs in a challenging economic environment.  

The benefits edge: Four key strategies to cut costs and generate growth

A well-run benefits package offers a competitive advantage in the current marketplace and will become even more critical in the era of health care reform. Health care costs will continue to rise, even as health care reform unfolds. For the first time ever, the average annual per-employee health care spend in 2010 will surpass the $10,000 mark.2 As a result, employers will continue to look for ways to cut costs in a challenging economic environment. There are proven ways to save if decision makers take a closer look at their company's benefits and the administration of those benefits. Here are four strategies to help you control future health care costs, improve workforce productivity, manage risks, and boost employee satisfaction.

Strategy No. 1: Outsource benefits administration 
If a company's administrative benefits staff is spending more than half of its time working on repetitive manual tasks, imagine what could happen if those efforts could be repurposed toward a more strategic focus. Outsourcing was once seen by employers as a response to downsizing or restructuring. Common functions that are outsourced for large- and mid-sized firms include payroll and tax processing, employee service centers, benefits administration, COBRA, flex savings accounts, health and welfare, and FMLA administration.

When making a decision to outsource benefits administration, employers not only need tools to help them reach short-term goals, but ones that guide them toward more creative solutions of which they may not yet be aware. Outsourcing should help employers retain control of their priorities rather than taking that control away..

Strategy No. 2: Empower employees with decision support tools 
The main reason employees do not change plans is that they do not understand their options. Bundling effective communications with decision support tools is a proven approach to gain adoption into the plans employers offer. Decision-support tools result in benefits compliance, benefits education and employee empowerment. And they're not just needed at open enrollment. Effective decision support tools need to be in place for newly eligible employees, employees experiencing life events or any time they are making a change. Employers should also consider offering a web portal with knowledge base content and decision-support tool -- like plan comparisons, medical cost calculators and medical selection tours.

Strategy No. 3: Streamline premium payment processes 
Companies that use one system to streamline premium payment processes can completely bypass "premium leakage." With the right tools, employers can streamline the premium payment process, and at the same time, help eliminate waste. To begin with, employers can minimize and eliminate data errors in the premium payment process by utilizing a single, online editable data base from point of entry all the way to the carrier communication process. Employers also need to consider how they're managing retroactivity, from the premium perspective and also in terms of recouping retroactive premium deductions. Carriers today are effective dated and enrollment is effective dated, so companies have to be able to identify enrollment changes that occur retroactively.

Strategy No. 4: Use data to make cost-saving decisions 
Winning companies take existing data and use it in a variety of ways, from mitigating health care costs and improving performance and productivity to increasing employee satisfaction and enhancing educational opportunities for employees.

One way employers use data effectively is through total rewards statements. A disconnect often exists between the dollar amount organizations spend on benefits and the employees' perception of the value of their benefits package. And at the same time, rising health care costs may force employers to lower the amount of their contribution for their employees' health and welfare benefits. HR professionals should attempt to increase their employees' level of understanding by communicating the value of their benefits package. Total rewards statements help employers communicate their contribution amounts and communicate coverage they make available to employees at no cost to them, such as basic life insurance or an employee assistance program (EAP).

The cost of benefits will continue to rise. And employers and employees share an increasing burden of those costs. The good news is you can counter the spending trend if you proactively manage your benefit programs. Whether you are a small firm or large corporation, these five strategies provide important ways to reach your strategic goals by cutting costs and generating growth. 

Ceridian offers innovative managed human resource solutions uniquely designed to meet your needs, including payroll and compensation, employee benefits administration, staffing, compliance, HR administration and EAPs, work-life, health and wellness and productivity management solutions.