Following a long-evolving shift in priorities, employers are now seeing health plan costs as the most important factor in making benefits decisions. 

Among 1,817 recently surveyed human resources leaders, 38% said cost containment was now the top factor, according to recent research by Lockton, an independent insurance brokerage, benefits provider and risk management firm. 

The former leading priority, attracting and retaining talent, was the choice for 30% of those polled. Just three years ago, it was the top benefits consideration for 43% of HR leaders, compared with 20% who were cost-focused. 

In the new survey, a vast majority (84%) of the respondents cited increasing costs as the biggest challenge their company faces regarding employee benefits, Lockton reported. 

Still, employers remain skittish about making cost-motivated changes to benefits plans out of concern for potential disruption to employees. Only 2% of those surveyed said their companies would be willing to implement progressive cost-saving tactics such as reference-based pricing or individual coverage health reimbursement accounts. 

Lockton, however, pointed out that “cost pressures will persist, and avoiding disruption is not a sustainable strategy.” In fact, the report said, “the most disruptive decision may be to do nothing at all.” 

Delaying effective responses to the pressures “may limit future options, making it more difficult to achieve savings and increasing the risk of reactive, high-impact disruption down the line.” 

The report gave some other examples of strategies aimed at cost savings on benefits: 

• Eligibility management. For example, spouses disproportionately contribute to costs, so amending eligibility rules is one path to cost management. The changes could include a spousal charge, excluding spouses with access to other coverage, or excluding all spouses. The report said 20% of employers are using such strategies. 

• Population health. Chronic conditions are a major driver of benefits costs. But, according to Lockton, most of the surveyed employers are not implementing solutions beyond traditional carrier programs for chronic condition management. Only 17% of them reported having more robust programs for cancer, 7% for kidney disease, and 6% for digestive health. More common were programs for cardiometabolic health (36%) and musculoskeletal health (31%). 

• Purchasing efficiency. Companies should, of course, seek to enter into group purchasing order arrangements, which dominate the market for rebates from drug companies. Also, two-thirds (64%) of the surveyed companies with self-funded benefits plans are focusing on specialty pharmacy areas to save costs; steps include having specialty medicine available only from specialty pharmacies, and mandatory specialty site-of-care management (12%).