How Auto Dealers Can Take Control of Healthcare Costs
As employee healthcare costs continue to grow, big benefits await auto dealers who explore health plan options.
Everyone in the auto industry knows that hitting sales goals is the name of the game. Each year, those targets are important because they can make or break a business.
With expenses rising faster than revenue, evaluating operational costs gives dealers the information they need to stay competitive. While rent and advertising dollars will always be a large part of the budget, healthcare for employees ranks as one of the biggest expenses a dealership can have.
Most dealers only look at their healthcare expenses during benefits open enrollment season, but with the rollercoaster ride of the pandemic in 2020, and the uncertainty of its economic consequences in the future, the time has never been better to take a closer look.
A recent study shows that employer’s shoulder nearly 75% of the annual cost of family premiums for employer-sponsored health insurance. According to the Kaiser Family Foundation “2020 Employer Benefits Survey,” premiums increased 4% this year to an average of $21,342, of which employees contribute $5,588. (Since the survey was conducted partly before the pandemic, its full impact may not be known, but average family premiums have risen by 55% over the past decade, at least twice as fast as wages and inflation.)
To reduce some of the $15,000+ cost burden, dealers have little choice but to select health plans that shift more costs to employees through high deductibles and copays. It’s an unfortunate trend that has a tipping point for employees who can’t handle the weight any more than their employers.
Many dealers regard healthcare as a line-item expense that they have little control over and no good options for reducing, but the opposite is true. Rather than focusing on who is paying for which part of the health plan, dealers can get to the root of the problem by reducing cost, increasing quality and improving access for their employee’s healthcare.
Imagine telling a customer they can have a 40% discount off a car, but they can’t know the sticker price. There would be a lot of questions and possibly a heated discussion. Today’s healthcare system is similarly structured, leaving employers in the dark on the actual costs of medical procedures. This is made worse by traditional Preferred Provider Organizations (PPOs), who offer “discounts” off medical services from facilities who frequently charge variable and inflated prices within the same geographic region.
The good news? There are powerful alternatives to traditional health insurance that allow self-insured employers and their employees to take back control of their healthcare costs. Imagine Health is a solution that can save up to 30% in healthcare costs while improving access to affordable quality care.
Through direct partnerships with select, high-quality health systems and built-in price protection, Imagine Health delivers immediate and long-term savings. Also, by adding quality to the cost-plus equation, Imagine Health members are not just paying less for care, they’re paying for less care by avoiding unnecessary procedures, labs and tests as well as ER admissions, complications and readmissions.
Members are incented to use Imagine’s provider partners, but they are free to choose any provider they want. Imagine’s built-in price protection ensures they don’t overpay for care no matter where they go.
Nationwide, auto dealers are using solutions like Imagine Health to reduce costs and gain a competitive advantage in the marketplace. They are saving significantly on their healthcare spend compared to traditional large carriers. With the added help and expertise of proven partners, they pay their healthcare bills understanding what they are being charged for a medical service and paying the provider a fair profit.
For these auto dealers and others across the country, making the switch from a traditional health plan can be transformative. Many have reinvested the savings back into their business, expanded their workforce and even reduced or maintained their employees’ healthcare premiums.
Any time of year is a great time to take the first steps to better manage healthcare expenses. While ongoing monitoring is a good practice, the best way for dealers to position themselves for immediate and long-term cost savings and competitiveness is to evaluate options now. Getting ahead of the curve paves the way for an informed decision at renewal time and bottom line savings on next year’s health plan.
Doug Sanders is the Regional Vice President of Imagine Health in the Texas/Central Region. Imagine Health partners with health systems to provide employers and their employees with access to high-quality care at favorable contracted rates.