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Managing the Cost of Employee

Benefits
Methods in Managing Benefits Cost
• Employee Contributions
• Waiting Periods
• High-deductible Plans
• Utilization Reviews
• Case management
• Provider payment systems
• Lifestyle interventions
Employees Contributions
• Requiring employees to pay a nominal amount
of the costs paid by employer to provide
particular benefits.
Waiting Periods
• It specify the minimum number of months or
years an employee must remain employed
before becoming eligible for one or more
benefits.
High-deductible Plans
• Often used in health care plans
• The premium for high-deductible plans is
substantially lower, which creates immediate
cost-savings for employers.
• Employers are responsible for providing
workers’ compensation insurance.
Utilization Review
• Used to evaluate the quality of specific health
care services by Health Care Providers.
• Used to ensure that medical treatments
received by participants are medically
appropriate by the Employers.
Types of Utilization Review
a. Prospective or Precertification Reviews
b. Concurrent reviews
c. Retrospective reviews
Prospective or Precertification Reviews
• Verifying patient’s coverage
• Determining whether the health plan covers
the treatment
• Judging whether the proposed treatment is
medically appropriate
• Specifying whether a second surgical opinion
is necessary.
Concurrent Reviews
• Insurers conduct concurrent reviews to judge
whether additional inpatient hospitalization is
medically necessary.
Retrospective reviews
• 2 main objectives:
– Determination of whether the health insurance
covers the patient, the medical conditions, and
the medical treatment; and
– To judge that claims are not fraudulent by
confirming that medical treatments were actually
given and were appropriate for the medical
condition.
Case Management
• Registered nurses or social workers who are
employed as case managers, collaborate with
physicians to balance medical needs of the
patient and to cntain costs for health insurers.
Provider Payment Systems
• Payment arrangements between managed
care insurers and health care providers.
• Managed care plans establish provider
payment system to control the cost of health
care.
Provider Payment System

Negotiation Agreement
• Participating physician • Percentage discounts
• Health care facilities • Capped fee schedules
• Pharmacies’ duration • Partial capitation
• Full capitation
Lifestyle Interventions
• Any activity that changes how a person lives
life.
• Most companies, Employees choose whether
to participate in one or more wellness
program.
• Most companies it lower the cost of
employer-sponsored life and health insurance.