As plan sponsors begin to see the predictions of significant annual increases become a reality and replace the flat or declining cost trends of the past years, they are turning to evaluating their current plan design to ensure plans are meeting current and future needs.
Plan sponsors should first review their current plan and determine how well it is containing costs. That being said, past experience will not reflect future behaviour. Unlike insured benefits, health benefits, particularly drug benefits, are dynamic and change as the employee demographics change. Many times the older the group the higher the “pooling” charges except in drug capped programs where the pooling charges on an older demographic group are more affected for Out of Country Travel coverage.
What are the biggest costs to the plan? Were these also the biggest costs last year? The year before that? If not, how has this changed? Review each area identified against the impact to plan members.