Every so often, I have a flashback to my first job at General Electric. I was a financial analyst in one of the company’s old industrial businesses—a multibillion dollar firm that would have ranked as one of the Fortune 500 if it was a stand-alone company.

Like clockwork in April, we’d hear it-it would start as a distant rattling, but as it approached, you knew what it was… the shaking shoebox. The shaking shoebox meant one thing– fess up all the extra pens, pencils, and highlighters in your desk drawers. They were going back into the supply cabinet.

The shaker of the shoebox was our department Admin. She was like the tax collector of office supplies. If you didn’t fess up enough, she’d eye your drawer to see what you were hiding.

No joke.

She took her job as the supply-cabinet gatekeeper very seriously. You wanted a mechanical pencil instead of good ole’ yellow No.2 ? You have to personally ask her for it and you were only allowed ONE. If you came back in two weeks for a second, you had to account for the demise of the first. (“The CFO took it” always worked for me.)

Did I mention that this was a multi-BILLION dollar business?

Did they really care so much about measly office supplies? Apparently so.

So where is the lesson in all of this?

1—Beware of shoebox-wielding Admins.

2—Take every pencil seriously. Have you ever looked at your office supply expenses? Do you really know where all the money went? When I ask my clients why office supplies have gone up 20 percent over the past year, practically none of them could explain what they spent the incremental money on. Staples® contributes to the big black hole in most business’ P&L– Office Supplies. It sucks a few thousand dollars every year out of a business’ profit. (I am sure they like it that way too!) Even if you saved a few hundred dollars from office supplies and upgraded your software or sunk that into a new marketing piece, wouldn’t you get a better bang for your buck?

So maybe it’s time to do a little experiment of your own. Pull out your shoebox, and make the rounds in your office. If you come up with a full box, it is probably a sign that you might have other “pen- and-pencil” type saving opportunities in the business. Think about what other metaphorical shoeboxes you can shake—who knows, you may come up with serious savings!

I asked Tina Piccinnini of Coastal Financial Group how employers can reduce their healthcare costs. Her answers are below. If you want more information, please email Tina or call her at (973) 952-0300 x119

What are simple things can employers do to reduce their healthcare costs?

1. Have 5 different plans for 5 employees: Most employers I speak with are always surprised that you can really tailor the health insurance plans specific to their employees.  For example, a group that has 5 employees can have 5 different plans.  The HMO plan that works well for one person, may not work for someone else, and that’s ok. You can set up the insurance to really customize the coverage that best fits the needs of each employee.  Generally, a younger person would not take a lot of medicine, so give that employee a lesser prescription plan at a cheaper cost and each employee wins.
   
2. Define your contribution: Any employer knows that by law, he is required to contribute a percentage of the premium for each employee.  What works well for employers is having a defined contribution so he will know exactly what his cost is each month.  For example:  The employer can say, I am going to contribute $300 a month for the cost of healthcare.  So, I will show 3 or 4 different plans, and the employee can choose which plan works well for them.  So, if employee A chooses a plan that costs $320 a month, the employee only has to contribute $20 a month.  If employee B wants a plan that costs $400 a month, he will pay $100.  This works well for the employer because he knows exactly what his cost is each month and can set his budget accordingly.  This is especially important right now with a slow economy.
   
3. Reconsider prescription coverage: A big portion of the premium is to cover the prescription coverage.  Many of the insurance companies have come out with plans with either no prescription coverage or a discounted prescription plan.  These types of plans can lower the rates dramatically and should be considered as an option for an employee who is not taking monthly maintenance medications.
4. Pay for what you use: Many people (myself included!) are used to the days of having health insurance cover everything at 100%.  While those plans exist, they are not generally cost effective.  We all need to look at options that could possibly include a higher copayment, or a deductible specifically for hospital stays.  Studies have shown that on a group with 10 employees, only 1 will use the hospital benefits.  So, why pay for something you are not using?
5. Don’t wait for your anniversary: One of the most important things I can stress right now is this, and not a lot of people know this, if you need to reduce costs now, and you did not make a change to your plan on your anniversary date, the insurers will generally allow an off-cycle benefit change to lower the cost right now.  Also, you can change your plan from company to company at any time (you don’t need to wait until your anniversary date).  You will not be subject to a pre-existing condition clause and you can potentially save money.
6. Use a broker (and I not saying this because I am one).  Most of my clients are employers with less than 50 employees.  I see and hear their struggles daily as they try to make ends meet.  A broker generally has access to all of the insurance companies and can look around and find the plans that your doctors and hospitals participate with at a cost that works for you. A broker should always be there to handle any claim, billing or enrollment issues as well so you don’t have to sit on the phone with the insurance company for hours trying to get things done.  You are paying a lot of money for your plan, make sure your broker is working for you!