How HR Service Providers Can Help Hawaii Healthcare Employers Adapt to Rising Health Benefits Costs

Businesses are feeling the squeeze of rising healthcare costs. Inflation-induced healthcare increases are predicted to drive premiums higher next year. HR service providers can help a business manage these increasing expenses. They can offer customized solutions to meet a business’s specific needs. They can also help a company comply with state and federal regulations.

Restructure Your Benefits

In the face of rising costs, many employers look at employee benefits offerings to see where cost-effective and employee-positive changes can be made. Estimates healthcare costs are poised to grow 6% in 2023 due to inflation-induced increases by healthcare providers, which will ultimately be passed on to payers through upcoming contractual cycles on underlying provider network contracts.

HR can make a big impact by taking the lead in benefit strategy. The key is generating analytics on how benefits are utilized to inform and drive optimization. This requires using technology that allows HR to quickly and accurately gather, standardize, and analyze data. Using technology to streamline processes frees HR teams to focus on more strategic activities.

For example, leveraging real-time insights on utilizing new financial well-being benefits like commuter passes and wellness programs can enable HR to introduce other digital health solutions to strengthen their employer value proposition (EVP). By providing a more comprehensive set of employee benefits, HR can reduce people’s risks while improving employees’ overall experience at work.

Another opportunity for HR to step in is around the pending change to Hawaii’s temporary disability insurance (TDI) law. Currently, the TDI mandate requires employers to offer coverage through an authorized insurer or self-insure their HMSA-approved TDI plan. The TDI law doesn’t have ERISA preemption, and federal ACA requirements apply.

Invest in Technology

Hawaii healthcare employers are facing rising costs in several areas. As a result, many are reducing costs by adjusting their benefits programs. One option is to increase employee contribution rates. Another is to impose additional surcharges for high-cost conditions. However, this strategy is more difficult in Hawaii because of state law.

As a result, Hawaii employers that offer HDHPs must comply with the state’s statutory limits on employee contribution contributions and cost-sharing requirements. In addition, the state’s worker’s compensation laws may require employers to provide employees with coverage. ERISA does not preempt these laws (except as outlined in IRS Information Letter 2021-0011); therefore, Hawaii employers must follow the state’s rules and regulations when offering their HDHPs.

Inflation-induced healthcare increases are expected to continue. This could lead to additional cost increases in the coming years, particularly as underlying provider network contracts are renegotiated. This can negatively impact both employees and the companies that employ them. As a result, the resignation rate among COVID-19 pandemic workers has increased.

However, resignation rates are expected to decline over the next few years as employees become more comfortable with their job security. This is a great opportunity for HR leaders to focus on employee-positive strategies that can help mitigate the effects of inflation-induced healthcare increases.

Invest in Employee Education

Amid rising employee benefits costs that outpace inflation, record levels of attrition, and a growing focus on diversity, it’s becoming increasingly important for Hawaii healthcare employers to offer attractive benefits packages. As such, HR service providers can help employers by providing a range of services that can help improve their employee engagement and retention strategies.

One area where HR service providers can play a critical role is in the training and development of Hawaii’s workforce. In addition to requiring health coverage, Hawaii’s laws require employers to provide workers with temporary disability insurance (TDI) that is “sufficiently affordable.” To meet this requirement, the state imposes strict actuarial standards on employer-provided TDI plans, which means that many plan sponsors try to contain their costs by raising employee contributions or expanding their cost-sharing provisions.

However, these efforts can be impeded by Hawaii law. The DLIR requires that employers conspicuously post two-page highlight documents to let employees know what their employer’s TDI plan covers. It also maintains a list of approved TDI plans and requires that self-insured employers report their own TDI plan to the DLIR to ensure it meets the solvency and ability-to-pay standards.

Implement a Self-Service Portal

Whether they need to know how much their health insurance deductible costs or want to check the status of their time off request, employees should be able to access all of this information easily. Having the ability to take care of basic HR tasks themselves, rather than needing to go through management or HR, helps increase productivity, reduce frustration and boost engagement levels.

An Employee Self-Service Portal (ESS) is a tool typically included in most Human Resource Information Systems (HRIS). An HRIS functions as an organization’s central hub, keeping major HR records and compliance documents organized while also handling payroll, benefits and attendance tracking for individual employees. An ESS Portal allows employees to interact with these systems, such as viewing paystubs and changing payroll withholding tax amounts.

Still, it will enable them to update personal data and partake in open enrollment. A powerful software solution has an ESS Portal that allows employees to manage their HR-related information from one easy-to-use, user-friendly interface. This increases productivity by enabling employees to take control of their knowledge and frees up valuable HR resources to focus on more strategic objectives. Plus, it gives employees the peace of mind of knowing their personal information is protected.