When many business owners look at how much they spend on benefits, the costs seem so astronomical that creating significant savings can seem impossible. The Society for Human Resource Management (SHRM) estimated last year that employers would spend an average of $14,800 per employee in 2019, and given how healthcare costs have steadily risen over recent years, this number isn’t likely to decrease any time soon.
A great adviser can help you find savings throughout your benefits plan, and even changes that seem small on the surface can lead to thousands of dollars in savings that can lead to opportunities for growth within your business and increased employee satisfaction. Recently, one of my clients experienced this for themselves when they switched to a self-funding plan and saved big on just one employee’s prescription.
A $44,000 Decision
The high cost of prescription drugs is no secret. We targeted this as we examined how to help our aforementioned client save on their benefits plan, and we were able to source one arthritis medication (Humira) for one of their employees. This drug retails for $60,000, but we were able to reduce the cost to the employer to just $16,000, saving them $44,000 or nearly 75 percent of the original cost.
These savings also extended to the employee in question. The worker was originally going to have to pay a $150 copay, but we were able to eliminate the copay entirely. For one employee on a retail salary, saving nearly $40 a week on medication can make a huge difference.
This single instance saved both the employer and employee a large amount of money, and now, both of them can apply those savings to their own goals.
Improved Employee Satisfaction
An extra $150 a month in savings can significantly improve a person’s life, and the employer in this story now has the privilege of delivering that good news to their worker. Imagine what that employee could do with $1,800 a year in savings: pay off bills or debt, buy more gifts for their kids at Christmas, even save up for a well-deserved vacation over a couple years.
The positivity that results from this level of savings can also have a positive impact on the company by:
- Reducing turnover rates – This employee is far less likely to search for another job when they know that their current employer can essentially offer them $1,800 more per year.
- Boosting employee morale – An employee who feels like their employer is looking out for them is far more likely to be positive and productive at work.
- Attracting better talent – Offering evidence like this to other potential hires provides them with a huge reason to work for you instead of your competitors.
Businesses that look out for their employees’ best interests have far more success in keeping and attracting the kind of talent that helps the company grow.
The Opportunity for Investment
The tens of thousands of dollars the employers saved in this case can now be implemented as a strategic tool for their business. As a retail company, $44,000 can fund the salaries of one or two new hires. They can also put the money toward rewarding their employees through raises or bonuses. Investing in their employees can, again, have a positive impact on their recruiting and retention rates, potentially saving them even more money through reduced hiring and training costs.
Your adviser can work with the leaders in your business to uncover these opportunities for growth and savings. By finding even “small” ways to reduce expenses and stretch your dollars, they can prevent unnecessary benefits spending and help you turn your savings into opportunities for your business to evolve.
Simple Changes for a Huge Impact
Sourcing just one prescription drug for just one employee may not seem like it could offer a lot to a business, but our client’s experience proves that the opposite is true. By placing their trust in us, this employer saved tens of thousands of dollars while creating a better work experience for their employee. Now, both of them can use their savings for improvement and growth wherever they see fit.
Contact me today to learn more about how a great adviser can help you create positive changes that have a lasting impact on your business and the employees that help it succeed.