Are you getting the best return on your investment in employee benefits? Unfortunately, it's not always easy to answer this question. You might well have too much information on some programs — and too little on others. For strategies to align and integrate programs, see Transforming Health Benefits Programs.
To help employers evaluate the cost-effectiveness of health-related benefits programs, experts recommend these guidelines:
- Focus on the overall picture. It can be easy to miss the forest for the trees. For example, when measuring the impact of a return-to-work program, it's easy to determine whether disabled employees are getting back on the job sooner. However, you also need to consider the overall impact of the program on your other health-related benefits.
- Share information among programs. Most employers manage their health benefits in separate silos — Medical insurance in one place, Disability in another, and Workers Compensation in a third. Be sure to distribute every incident of medically related absence throughout the company. The more effectively you integrate your data among all your benefits programs, the better.
- Benchmark your results against those of your peers. The easiest and most straightforward standard is how comparable companies in your industry are doing. Although this might not be a precise comparison, it should give you a fair idea of what your competitors are doing right (and wrong) with their benefits programs — offering guidance you can use to improve yours. For example, to compare your Short-Term Disability program with those of other companies, consider how the incidence and duration of disability incidents are related to underlying diseases in the workforce and the design of the plan (the elimination period, rate of wage replacement, maximum benefit period, and so forth).
We'd be happy to help you evaluate the cost-effectiveness of your benefits program. For implementation support and program design ideas, see Transforming Employer-Sponsored Health Benefits. If you want personal assistance, talk to an agent.
Frequently Asked Questions
How do I measure the return on investment for employee health benefits?
Compare program costs to outcomes such as reduced absenteeism, shorter disability duration, and improved productivity, while accounting for related impacts across all benefits.
What data should be shared among benefits programs?
Share incident dates, diagnosis categories, absence duration, and return-to-work outcomes so medical, disability, and workers' compensation teams can analyze overlaps and trends.
How can benchmarking help improve our benefits?
Benchmarking against similar employers highlights gaps and best practices, helping you adjust plan design or case management to align with industry standards.
When should I consult an insurance professional about benefits strategy?
Consult an agent when you need help integrating data, redesigning plans, or evaluating vendors to ensure your benefits deliver the intended value.