As small- and medium-sized businesses continue to adapt in the face of ever-changing health care reporting regulations, new strategies are being attempted to mitigate employer spending. One such tactic that has grown in popularity in the last half-decade is on-site health care.
This practice may seem extreme or even counterintuitive, and indeed there has been much discussion in the HR world as to the efficacy of this solution. Half a decade after Obamacare, what does the prognosis for on-site health care look like for most businesses?
On-site clinics are growing in popularity
On-site clinics have been around for many years, but they've recently been picking up steam as effective ways for employers to meet required coverage standards under the Patient Protection and Affordable Care Act while simultaneously minimizing spending that companies are responsible for.
According to the Society for Human Resource Management, the past five years have been a particular growth period for these facilities. Not surprisingly, on-site clinics were most prominent among the health care industry as far back as 2010, with more than 60 percent of facilities surveyed indicating they used this option. The second and third place spots in terms of industries using on-site health care go to government and manufacturing, respectively.
Is on-site more effective?
There are several benefits to having on-site health care. The obvious advantage is that these solutions provide accessible and more affordable health care to employees and, in some cases, their families and dependents as well. From a financial standpoint, they can also save employers money by increasing the out-of-pocket expenses workers have to pay.
But according to a survey from Towers Watson, the main motivating factor driving on-site health care proliferation today is improving productivity, with 75 percent of respondents indicating this goal as their primary concern. By providing employees access to basic medical care on-site, employers are hoping to reduce instances of absenteeism due to illness.
But assessing the ROI of these solutions isn't always as straightforward as you might think. Depending on a variety of factors, including the level of care offered to employees on-site, and whether or not dependents and family members are eligible to receive care at these facilities, can have a significant impact on the actual cost savings companies can enjoy through providing access to health care at work.
Small-business owners are encouraged to partner with PEO companies as a means of assessing their current health care situation. By working with licensed benefits experts, executives can confidently work toward a health care solution that is cost-effective as well as compliant.