By Richard Rons (HR), Manager of Employee Benefits
How Argonne determines its benefits coverage
Argonne determines benefits coverage in a number of ways, including benchmarking other U.S. Department of Energy (DOE) laboratories and the lab’s comparator group, legislative requirements, industry standards, and benefit values and costs. Argonne’s Prime Contract with DOE requires us to complete a comparative benefit value study every three years and an annual comparative cost study for the benefit plans we offer.
The cost study compares our plans’ costs to the Bureau of Labor Statistics (BLS). The value study compares the value of our benefits against 15 similar organizations, our comparator group. Currently, these organizations are: University of Illinois, Michigan State University, Northwestern University, Cornell University, University of Chicago, Fermi National Accelerator Laboratory, Lawrence Livermore National Laboratory, Sandia National Laboratories, Abbott Laboratories, AT&T, BP, Exelon, IBM, Honeywell, and the Johns Hopkins University Applied Physics Laboratory.
The total benefit value of our benefits must be within 105 percent of the average of our comparators’ benefits value and the total costs must be within 105 percent of the BLS. If we exceed the 105 percent, our Prime Contract requires us to reduce our benefits. The 105 percent limit is a continually moving target as other organizations change their benefits.
Based on the results of these comparisons, we determine if we need to reduce our benefits, keep them the same, or increase them. Any significant benefit change is presented to the Benefit Plans committee and then senior management for approval. Any benefit change that increases costs or terminates a plan needs to be approved by DOE before it can be implemented.
Healthcare cost sharing
Argonne presently contributes 74 to 75 percent of the cost of its employee health insurance premiums. Both Argonne and the employee costs are based on actual healthcare claim experience and plan fees, as well as projected increases in healthcare costs. Our most expensive diagnostic categories are: neoplasms (cancer), musculoskeletal, digestive, circulatory, and behavioral health. Our high-cost (accumulated claims greater than $50K) claimants (40 to 60 per year), represent about 33 percent of our total cost.
There are many reasons that cause health care costs to trend higher for both employees and employers in the United States. They include higher prices for medical services, the use of new expensive technologies and treatments, an aging and sedentary population, increases in the cost of provider malpractice insurance, a substantial increase in specialty drug usage, and a lack of information on comparative prices, quality, sources, and options in healthcare.
Addressing the causes of higher healthcare costs is not a simple or easy task, but it can be done. Argonne consistently and continually evaluates and compares plans from numerous providers to ensure we offer you the best possible healthcare plans. We scrutinize data and benchmark various plans to ensure the choices we offer are reasonably priced, cost-effective, and competitive among comparable institutions.
A healthier work population will result in higher productivity, lower overall health care costs, and greater employee well-being. This is why we’ve increased our wellness programs to promote a culture of health awareness and well-being among the laboratory’s employees and encourage individuals to learn about health risks and to take action before a problem arises. Studies show 70 to 90 percent of healthcare spending in the U.S. is caused by preventable, modifiable risk factors that lead to chronic disease. Wellness programs provide employees with annual physicals, tools and education, and opportunities to either maintain or improve their health, and they can help lower overall healthcare costs. This reduction in healthcare spending means more money will be available for research and supporting the laboratory’s mission. It also means lower premium and copay costs for you. We are in this together.