As fall approaches, so do many many companies' health plan open enrollment periods-a time when employers have to make some tough decisions. While many things change in the business world, there is one somber certainty. The cost of health coverage will continue to increase, and employers will continue to search for ways to manage expenses, while still providing a competitive benefits package.

When faced with a significant increase in benefits premiums, the first instinct of many organizations is to change plans or carriers. Do not make this decision casually. When you change HMOs or other network plans, your employees may have to change most or all of their doctors. While you should not hesitate to adopt a new plan if you and your employees are getting bad service or if your current plan does not meet your needs, before making major plan changes, you should perform a thorough analysis of the your coverage, the requirements of your employee population and your reasons for making the change.

Look Within the Plan

If your motivation for changing plans is based purely on cost, first look at making changes within your current plan to bring down expenses. If your present co-payment level for office visits is low, consider raising it. Higher co-pays reduce costs, give employees a greater understanding of the cost of care and provide an incentive to limit doctor visits. You can also increase employee co-payments for prescription medicine, or offer preferential reimbursements for generic drugs.

You may need to raise the rate of employee contribution. Employers generally require employees to pay from 20-40% of employer medical costs through payroll deductions. Many small employers pay for individual coverage but require an employee to pay the entire additional cost for family coverage. Examine your options against what other companies in your industry and geographical area are offering.

If you offer several types of health plans, you may wish to steer employees to lower cost plans by more dramatically increasing the employee contribution rates required for the more expensive plans. To effectively guide workers toward a particular plan, the employee cost of participating in the target plan must be significantly lower than for the less favored option.

You may also consider reducing or removing certain benefits within a plan, or increasing the waiting period for new employees prior to eligibility.

Communicating the Changes

Understand that any time you make major changes to your health coverage, you are navigating a sensitive area about which your employees will have strong emotions and opinions. Develop a communication strategy that will enhance employee understanding about why the changes were necessary.

Give employees an understanding of the bigger picture. Explain why their costs are going up, what the organization is doing to control increases and what employees themselves can do to keep costs in check. Inform your workforce that although their contributions are increasing, yours are going up even more. Preparing and distributing a breakdown of total cost and respective employer and employee costs and contributions will help illustrate the magnitude of the figures involved.

Put any co-payment increases in the proper perspective. Employees will be less likely to complain about paying a few dollars more for an office visit if they are reminded that your plan will save them many thousands of dollars in expenses should they require major surgery and hospitalization.

The details of health benefits plans can be confusing. Your open enrollment materials should include a detailed summary of the features and costs of the various plans offered and provider directories to help employees make decisions. Some companies use internet or intranet tools to enable employees to review options and calculate costs online. Online tools are most effective for a technologically savvy workforce that is comfortable with handling computer-based transactions

No matter what you do, not all of your employees will agree with the changes you make. However, given the significant media attention to spiraling health care costs, most will be familiar with the issues involved. By adopting a policy of ongoing, honest communication you can help to overcome skepticism, encourage employees to be your partners in controlling costs and promote understanding of the changes as a necessary business decision.