Hospitals wrestle with benefits planning

As the annual benefit planning season draws near, hospitals are facing some of the same struggles over fine-tuning their plans as other employers trying to meet the requirements of the Affordable Care Act.

“We want to make sure that when we're trying to recruit and retain the best talent, our benefit plan is comparable to what our main competitor or a couple of competitors are doing in the market,” said Brian Guyton, corporate director of employee benefits at West Penn Allegheny Health System.

[See also: Employers unaware of ACA compliance cost on group health benefits]

The health system also needs to make sure the benefit plan supports the health system’s overall financial goals, Guyton said.

Currently, WPAHS’ employees who participate in the company’s health plan offerings pay about 22 percent and WPAHS pays 78 percent.

If it comes down to it, WPAHS could shift its cost sharing margins, but the ACA’s affordability provision puts restrictions on how much companies can shift onto its employees, he noted.

The ACA requires that employers’ lowest cost healthcare plans not equal more than 9.5 percent of employee wages.

“Employers are essentially consumed with planning for healthcare reform,” said Robert Holland, executive chairman, Sagewell Partners, a Pittsburgh-based benefits consulting firm.

“They’re trying to make decisions that will result in them being compliant, but not result in them spending an excessive amount on healthcare [relative to what they have budgeted or spent historically],” he said.

Hospitals are attempting to take the healthcare benefit expense out of their operations system but, Holland says, they should also take a hard look at greater efficiency in their absence management strategies for the non-clinical and clinical workforce.

“Those productivity gains are going to be critical because there's not huge opportunities to find new sources of revenue,” he said.

Holland sees two trends emerging from the pressures exerted by the ACA and the aging of the workforce on benefits planning: One, employers won’t compete on the basis of benefits because there may not be significant enough differences in the benefits provided. And two, the creativity around healthcare benefits will shift to increasing wellness incentives efforts.

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