How to Build Out a Health Insurance Policy Your Employees Will Use

Health insurance is a critical pillar of an organization’s strategic goal, as well as its total compensation strategy. If done well, health insurance policies ensure employees come to work feeling their best, and maintain employee well-being, productivity, recruitment or retention. However, many companies struggle to design policies that team members will actually use, leading to underutilized policies and a limited return on investment.

Taking a structured, data driven approach, combined with some real-world insights from your team, can help align health coverage with what your workforce needs. Well designed health insurance plans will cater to the individual employees, and can pay off handsomely in both retention and productivity. However, careful consideration is often necessary to design a policy that meets the team’s needs.

Understanding the health insurance needs of your workforce

A one size fits all approach to health insurance is no longer viable. Organizations need to analyze workforce demographics, healthcare priorities, and utilization patterns — as well as spot inexpensive policy add ons that offer valuable benefits to employees. For example, fertility benefits have been used to entice top talent at companies like Apple and Facebook; despite high costs for treatments like IVF, the employers won’t necessarily spend more, since only around 1 in 10 people will actually use the benefits.

Organizations need to analyze various demographics, reports, health priorities, and utilization patterns to create policies that are both relevant and low in cost. For example,

• Running reports for demographic analysis 
• Analyzing payment and health claims data from prior years or periods, or data from comparable enterprises
• Conducting employee focus groups or interviews to assess demand for specific benefits that may have gone unnoticed in the past

To ensure the plan meets employee needs, the insurance policy must balance adequate coverage with flexibility or customization. Understanding the needs of your workforce will help decide what kind of policy you need to build.

Structuring a comprehensive and flexible health plan

Organizations that maximize their health policy ROI will balance core components like:

• Basic plan coverages such as prescription drugs, preventative or wellness care, mental health support, or maternity coverage 
• Tiered plan coverages such as dental, vision, therapy, screening, or specialized treatments 
• Restrictions on care or preauthorizations
• Prescription deductibles and coverage limits 

Small businesses (under 50 employees) can usually not customize the benefits and will be limited to the plans on the market. Mid sized companies (under 100 employees) will have some wiggle room in terms of co-pays or deductible options. Large groups can usually customize their options.

Considerations for a successful health insurance policy

When structuring the plan, consider the deductible first. If your employees will need to pay a significant amount for medical appointments, procedures, medications, and treatments, they may not use the benefits at all — resulting in missed prescriptions, appointments, or failure to get care, even in a medical emergency. The latter can be harmful for the business as well, since missed appointments or prescriptions (for example, not taking blood pressure medication, insulin, or anti-seizure medications) can lead to getting hurt at work and needing workers compensation.

Keep deductibles in mind relative to salary and employee situation. Employees making minimum wage will likely not pay $200 out of pocket to go to the doctor and may go without care. Group health insurance plans in the United States can make use of a smaller coverage network (with fewer physicians or hospitals in the coverage zone) to reduce costs instead of raising the deductible. These plans are often cheaper, and in many cases offer enough care for what the workforce needs.

Enhanced Data Analytics with AI

Employee health policies need continuous assessment to meet the team’s needs. Organizations should track and review reports as well as key performance indicators (KPIs) that are relevant to your goals and your team. How much is your plan being utilized, how happy are your employees, how many of them are leaving or joining the company?

AI-powered analytics can detect patterns and trends within these KPIs, aggregating data to forecast future claims and point out inefficiencies. AI tools (when designed properly) can flag any high cost conditions that exist among your workforce while preserving employee privacy, allowing you to best meet the needs of your team — helping not just to improve the retention and resilience of the workforce, but better understand your team.