March 20, 2025

Keep employees informed and engaged while cutting costs

Organizations and businesses have been struggling for years to contain the costs of health care coverage for their companies and their employees.

A 2013 study published in Missouri Medicine reported that U.S. manufacturers had been struggling for decades to control rising costs through the use of wellness programs and other efforts, with few results.

In 2025, they continue to struggle. PwC’s Health Research Institute indicates that the medical cost trend for employers was expected to increase by 8% in 2025—the highest level in 13 years. The average cost of employer-sponsored health care coverage in the United States will increase 9% in 2025, according to Aon, a global professional services firm.

In 2023, the National Association of Manufacturers reported that 58.9% of manufacturers pointed to rising health care costs as a significant challenge impacting their ability to remain competitive.

Each year, organizations and businesses and their human resources and benefit leaders come together to strategize about what they can do not only to contain costs but also to effectively communicate with and educate employees about the drivers behind these costs and their role in helping to keep rising costs under control.

Containing Costs

Prioritizing Primary Care

Controlling health care coverage costs can’t be delegated to human resources or benefit staff. The insurance industry is complex, and employers need more tools and strong partners to help share in crafting a strategy. Beginning with a focus on preventive care, annual physicals and age-appropriate cancer screenings will drive lower costs and survivability of preventable disease. The impetus and involvement must start at the top and be visible to the entire organization, says Greta Engle Kessler, vice president of employee health and benefits at Marsh McLennan Agency in Hunt Valley, Maryland.

“The most meaningful thing that human resource leaders and the C-suite can do is to start getting a priority set from the top down,” says Kessler. Specifically, she says, companies need to prioritize and build the case for the importance of primary care visits.

“If employees—and their partners—are going in and getting primary care, that will eventually reduce claims between 4 and 6 percent,” Kessler says. It’s not a quick fix, she acknowledges, but a continued focus and action can make a difference—preventing one large claimant could save an employer several hundred thousand dollars in claims.

Research supports her recommendation. A study in the Journal of Primary Care & Community Health found that each primary care visit for an individual came with a total cost reduction of $721 per patient per year. That’s primarily because these visits can help identify issues early on before they become more severe—and more costly to treat.

It can be challenging, though, especially in manufacturing environments with a high preponderance of males who notoriously underutilize health care. Communication is important, but Kessler also recommends offering incentives to spur utilization. “The most meaningful impact I’ve seen has been a percentage off of their premium for benefits,” she says. That could be as little as $50 a paycheck, she adds.

Deductibles and Savings accounts

At Jamestown Container, based in Falconer, New York, a focus has been placed on the use of high-deductible health plans (HDHPs) and health savings accounts (HSAs).

“One of the big things we’ve done is increasing people’s participation in HSAs,” he says, sharing that the company has moved to a higher-deductible plan option, says human resources director Todd McPherson.

HDHPs generally have lower
premiums than traditional plans. Employers also save on Federal Insurance Contributions Act (FICA), taxes (7.65%) for employee HSA contributions made through payroll deduction. And for employees, 100% of HSA contributions are tax deductible.

The use of these plans has increased significantly. Private industry worker participation in these plans has grown from 33% in 2014 to 51% in 2023, according to the Bureau of Labor Statistics.

ASO Packages

Steve Robinson is vice president of human resources with Royal Containers in Brampton, Ontario, Canada. Royal Containers has taken advantage of an administrative services only (ASO) model to help control costs, he says. Instead of being billed a set amount each month for services, it’s billed based on claims usage. “So, we’re putting in what they call deposits,” Robinson says. The strategy has resulted in significant savings.

“With this ASO plan, we’ve saved about $20,000 year over year,” he says. “That may not seem like much, but when we can turn these savings into extra benefits for employees, it’s a win-win
for everybody.”

Long-term Partnerships

While many companies may switch brokers and benefit providers regularly in an effort to chase after better deals, staying the course with a single provider can offer important benefits, says Robinson.

“I find that we’ve done better with establishing a partnership, not just with our broker, but with the services company that we use for our benefits,” he says. “When you have a track record time with them I find that premiums have become more manageable.”

Staying the course, Robinson says, can result in a better understanding of your needs, more personalized service, and an increased willingness to negotiate on rates. A longer history with the insurance company can provide for more accurate risk assessment and pricing, for instance. Insurers may also be more inclined to offer competitive rates to longstanding clients when they understand the ebbs and flows of our business. And familiarity with a company’s processes can lead to reduced administrative costs.

While switching companies from year to year may offer short-term gains, these shifts may not be beneficial in the long run. Frequent changes, for instance, can lead to disruption in employee coverage and care, administrative burdens involved in transitioning between providers, and the loss of the benefits that can be gained over long-term partnerships.

Cost, of course, continues to be a top-of-mind concern for manufacturers and their employers. But in addition to costs, companies recognize the need to ensure employees and their families have access to the type of care and options they need and value.

Meeting Varied Employee Needs

Flexible Paramedical Services

The medical needs of employees and their families are widely varied, meaning that a one-size-fits-all approach to coverage simply doesn’t work. Instead, companies are exploring new opportunities to provide flexibility in the choice of care—not just for traditional services but for new types of health coverage and maintenance options.

That’s the pathway that Royal Containers has embraced, says Robinson. And based on its experience, Royal Containers is now offering a more flexible approach to meet varied employee needs. Previously, its plan offered specific coverage limits for different services such as chiropractic care, naturopathy, or physiotherapy. For example, employees might be allowed $45 to $55 per visit, with annual maximums varying by service type. They’ve now revamped the coverage so that employees receive a single allowance of $1,000 that they can use for any combination of paramedical services that better suit their individual needs.

Virtual Care

Virtual care is another option that manufacturers are exploring to help save costs and time.

Primary care providers are in short supply in many communities, especially in rural areas. Since the COVID-19 pandemic, when virtual visits became a must-have for many, the opportunity for telehealth has remained a practical option for saving money and time while providing access to clinicians who might otherwise have been in short supply.

“It’s the same thing as a FaceTime or Teams call,” says Robinson. “You connect with a doctor, nurse, or nurse practitioner online, and they can triage, ask questions, diagnose, and can even prescribe medication for you, which can be sent to a local pharmacy wherever you are.”

That convenience, says Robinson, can be especially useful when employees are on vacation, when their family practitioner does not have available appointments, and if employees do not have a family doctor.

Mental health is another area of high demand and limited access that virtual care can address. This can also be a big benefit from the standpoint of privacy and concerns about the continued stigma of seeking this type of care.

One of the tools Robinson has found to be helpful in making ongoing improvements to coverage is regularly getting feedback from employees, both directly and via monthly surveys. Communication, he and others stress, is critical to ensure understanding and utilization.

Focus on Wellness and Well-being

In addition to traditional health coverage options, many companies continue to focus on wellness and well-being, offering information and services to help employees start or maintain a healthy lifestyle.

At Jamestown Container, for instance, McPherson says wellness continues to be an area of focus, and the company regularly holds wellness fairs. In addition, he says, “we switched our employee assistance program to try to get people more involved.”

Underlying all of these initiatives is the importance of communication to ensure employees are informed, educated, and engaged, boosting the odds that they will take steps to proactively focus on their health and the health of their families.

Communication to Inform, Educate, and Engage

Having various options or providing new types of coverage for employees can be a great way to cut costs, but in order to have an impact, employees have to understand the value of these options, how to access them, and the importance of the choices they make.

This isn’t just a one-time effort that takes place in the fall during open enrollment season. It needs to be ongoing and consistent to have an impact.

In addition to ensuring input from employees—and listening to that input to make meaningful changes and adjustments—some other techniques, both traditional and new, can drive engagement and understanding.

Multilingual communications

Given the diverse workforce in many manufacturing settings, it’s important to adapt communication strategies to meet communication needs, says Kessler. Often, she says, manufacturers face the barrier of numerous languages being spoken at any particular worksite.

While accommodating these variances may have once presented a significant, if not insurmountable, challenge, today’s availability of various generative artificial intelligence tools offers the opportunity to translate communications into multiple languages easily.

Manufacturers, says Kessler, should be able to turn to their brokers for assistance here. By partnering with knowledgeable brokers, she says, manufacturers can leverage various tools to reduce or eliminate language barriers and communicate more effectively with employees.

Beyond print

In addition to ensuring various language needs are addressed, employers must take into consideration that employees like to access consumer information in different ways—and not just in printed form.

Videos, for instance, can be an effective way to get messages across quickly and consistently.

“We’re evolving so that almost everything that we do is augmented by videos,” says Kessler. Again, she says, this doesn’t mean an unnecessary or added burden on employers. Brokers should be able to provide resources and recommendations on how to most effectively use video in various forms to reach employees with key messages.

Annual enrollment meetings

While annual enrollment meetings shouldn’t reflect the only communication with employees about important health care coverage information, they do remain an important annual event.

These annual meetings are important at Jamestown Container, says McPherson. The meetings, which are led by McPherson and the human resources department, along with broker representatives, provide an opportunity to explain plan designs and their impact on employees, discuss rising medical costs, and compare current plans with previous years.

Royal Containers also leverages annual meetings as part of its overall benefit communication strategy, says Robinson. “We partner with our account executive from the benefits firm that we use to come in and share their expertise with all of our employees,” he says. That approach allows employees to get expert explanations of benefits, learn tips and tactics for using the plan effectively, and understand how to use plan-related apps and tools.

Those apps and tools can provide readily available and easy-to-use sources of information for employees to understand their benefits, get questions answered, evaluate different coverage scenarios, and even seek and track care received.

Health care and health care coverage costs aren’t likely to go down significantly any time soon. But as employers, including manufacturers, are increasingly finding, by partnering with trusted brokers and representatives, communicating clearly and regularly from the top of the organization to the front lines, and leveraging new tools and technologies to make information readily available on a 24/7/365 basis, they can enlist employees in the ongoing effort to contain costs while ensuring health care coverage that can improve the health and lives of employees and their families.