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Three key opportunities in health benefits management

Tackle current trends and opportunities to drive savings and reduce risk in health benefits.


Total employee compensation costs range from 10-60 percent of revenue depending on the industry, and health benefits expense is the largest cost area—at 1-5 percent of revenue—after salaries. After doubling over the past decade, health care costs continue to rise faster than inflation.

The mandates of the Affordable Care Act (ACA) and the development of public and private exchanges mean both new compliance challenges for employers, as well as new strategies to examine and exploit.

This paper outlines three areas of opportunity for employers to explore, ranging from how to leverage private and public exchanges to help manage active and retiree health benefits expense, to how to leverage new strategies to tackle surgical benefits expense, one of the largest health care cost areas.

Employers are being forced to re-examine their health benefits philosophies and confront how to manage health benefits costs.

Key Findings

Now is an interesting time for HR leaders and CFOs to be looking for innovative solutions to help stem the tide of rapidly growing health benefits costs because of the rapidly evolving landscape of health care compliance. The current regulatory environment offers both new opportunities to explore, as well as requirements that must be understood and addressed. This paper touches on three specific opportunities that range from “must-do” to new-and-innovative options.

  1. Must Do—Re-examine Your Organization’s Health Benefits Philosophy: Public health care exchanges are coming as one of the many mandates of the ACA and the private exchange marketplace is evolving rapidly in parallel. It’s imperative to understand the implications for your business as well as the opportunities that exchanges offer—and it’s time to take a strategic look at your benefits philosophy in the post-ACA world. Your firm’s health benefits philosophy will have a significant bearing upon how (and if) you utilize private and public exchanges to manage your health benefits exposure.

  1. Explore—Private Exchange Options Offer Ways to Help Manage Retiree Benefits Liability: Second, retiree medical benefits liability continues to grow as more employees approach retirement age. Private health care exchanges offer an opportunity to fairly seamlessly limit or reduce retiree benefits exposure. You should evaluate this option if you have not done so already.

  2. Innovative Opportunity—Medical Specialization Makes New Solutions for Managing Surgical Benefits Expense Possible: Surgical Benefits Management is an emerging, leading-edge tactic to use to tackle the costs of surgical benefits with an innovative, outside-of-the-box approach.


Health benefits represent one of the largest areas of cost for employers. The rapid evolution of the health care market is creating a significant value creation opportunity for companies that can understand the implications of the changing market and regulatory backdrop.

This paper touches on several strategic questions that organizations need to confront and suggests strategies to consider in the current market environment. However, optimizing opportunities in health benefits management is just one of many opportunities to drive value from HR while supporting the strategic objectives of the business. Contact us to learn more about our perspectives on optimizing value in HR