Pharmacy's Role in Your Small Business Benefits Budget

Employers across the nation are trying to find new ways to contain the rising costs of prescription drugs. For many small businesses, employee benefits can be a key way to attract and retain top talent. While an organization may not be able to pay top tier salaries when compared to larger organizations, they are empowered to be a bit more creative with their employee benefits packages. Creating a meaningful and impactful employee benefits program can demonstrate to employees that the organization is dedicated to their long-term well-being.

Here are a few advantages of offering a strong employee benefits package:

• Attract and retain employees in the job market
• Create and maintaining an overall healthier workforce
• Improved company culture and employee morale
• Tax incentivized programming for employers and employees
• Strengthened employer brand and reputation

When crafting an employee benefits program, it is important for businesses to consider what matters most to their employees, while keeping their bottom line in mind. It can be quite costly for small businesses to try and keep up with the currently trending benefits, so implementing those benefits that will have the most meaningful impact on their employee population can be a good way to contain some those additional costs.

HR Tip: Consider conducting an annual employee survey to understand what benefits your employees value the most. Track survey results year-over-year and review employee feedback annually during your pre-renewal discussions. Paired with claims utilization data, employee survey feedback can be a powerful tool to implement meaningful changes to your benefits program.

Benefits and Your Bottom Line

By offering a competitive benefits package, employers are able to balance out the difference in salaries offered by many larger organizations, reducing the overall impact that payroll can have. According to a recent article, 43% of employees have said their current benefits packages have kept them in their current roles. With the impact of employee turnover reaching $1 trillion to US businesses annually, employers are continuously looking for creative ways that their benefits can help reduce some of those costs. In addition, benefits such as health and wellness programs designed to promote the overall health of an employee can contribute to a healthier employee population, contributing to a more engaged and productive workforce, leading to reduced time off and absenteeism due to illness.

Pharmacy Benefits and Small Business

Ensuring that a small business's pharmacy program is optimized and tailored to their specific needs is one way that a benefits package can have a significant impact on employees, families and patients. Pharmacy benefits allow small businesses to provide the necessary coverage for employees to obtain the medications they need at affordable rates, while allowing the employer the oversight to understand how these programs are influencing their overall healthcare spend. According to recent article, pharmacy benefit companies help patients and payers secure more than a thousand dollars in savings per person every year and employers and labor unions $878 per patient per year on prescription drug costs.

Selecting the right pharmacy program partner can be a tall task, but there are several benefits to having a partner in the effort to control healthcare spending. Here are a couple of examples:

• Cost Reduction Efforts: when partnering with a Pharmacy Benefit Manager (PBM), an intermediary exists between the organization and insurance carriers. PBMs actively work to negotiate the best rates with pharmacies and drug manufacturers on behalf of the employer.

• Prevent and Manage Drug Abuse and Overuse: pharmacy benefit managers can actively monitor the schedule of certain prescription drugs and help determine medications are being used outside of their recommended or prescribed usage.

• Evaluation of Available Alternatives: PBMs can also evaluate if there is a more cost-effective option of a drug available for both the employer and the employee. For some brand name medications, there could be a generic available that can be just as effective as the name brand version, for a significantly reduced price. According to the National Institutes of Health, generic drugs can cost an average of 30%-80% less than their brand-name counterparts.

The additional level of attention that PBMs can give to an organization's spending can help ensure that the pharmacy program is being used as designed, often pinpointing employee education and engagement opportunities through these valuable insights. PBMs can also make an impact at the patient level, being able to identify patients adhering to their prescribed medications, or determining if the current course of prescription treatment is the most effective. These impacts can have a significant influence on a small business's overall healthcare spending.

We understand the impact that employee benefits have on small businesses. When looking for a partners, it is important to engage solutions that align with your organization's goals and represent the best interest of your company and employees. If you are interested in evaluating your small business' benefits programs, including pharmacy programs, reach out to your local AssuredPartners team for assistance.