5 Types of PEPM Programs Your Benefits Package Should Offer

Per-employee-per-month rates for Employee Assistance and Work-Life have significantly decreased over the past three decades. The once standard internal EAP – where EA staff are full or part-time employees of the employer sponsoring the EAP service – has largely been replaced by external programs or outsourced vendors . Many longstanding internal programs have been downsized or eliminated in favor of cheaper external providers. Companies could not be located, as these companies generally do not publish their enterprise pricing up front.

The Numbers Behind Per Process and PEPM

It’s also a great recruitment tool to differentiate yourself in the hiring market and attract more talent. Since costs are tied to each transaction, businesses utilizing the cost per transaction model may feel pressure to minimize expenses by reducing the number of transactions. This can result in an increased administrative burden for your HR or payroll team.

Out of all employees, only 140 used the service in one year, which means the utilization rate was less than 0.4 percent. Services with low utilization are not cost-effective, so it is somewhat startling they are not questioned more rigorously by our industry. When employers pay PEPM fees, they are essentially paying for services that will almost never be fully utilized or found valuable by the entirety of their workforce. This is because PEPM fees are collected regardless of how many employees use the service. James Powell articulated this situation well when he compared it to inviting 250 people to a party just to get one what is pepm to attend. With HRIS implementation in mind, it’s vital to reflect on your company’s budgeting style.

This customization allows for a more personalized and employee-centric approach to healthcare coverage. The PEPM model also offers flexibility, as businesses can easily add or remove employees from their payroll without affecting the overall pricing structure. This makes it convenient for businesses with fluctuating workforce requirements, seasonal employees, or if they need to quickly adapt to market changes. As your business grows and hires more employees, the per-employee cost remains consistent under the PEPM model.

DEMYSTIFYING HRIS & PAYROLL PRICING: PEPM VS. PEPP SUBSCRIPTIONS

Learn how to successfully launch a PEPM benefit program so you know what to expect before implementation. And, payroll tax costs go down once thresholds like social security and unemployment tax maximums are reached. With TriNet, you get full visibility into your pricing structure and your services. While you’ll likely have to pay some fees if you outsource the administration of pre-tax accounts to a TPA, the costs are surprisingly reasonable. The employer then pays a fee – something like $75.00 – for each counseling visit actually received. The budgeted utilization or hybrid model can also have elements of value-based reimbursement tied in.

If the increase is in medical claims, a quick analysis should identify the top three costs based on PEPM. Depending up on the outcome of this quick analysis, a company can determine the course of action to address the rising costs. Also, it’s okay to start small with one program and scale up as you grow and see success. While you certainly can, there’s no need to start offering all five right away (that would take a lot of organization and paperwork).

The main issue with telemedicine is a doctor is unable to completely examine the patient, and must rely on self-reporting, or records sent. Some of this can be corrected with a physical examination, and other testing that can only be done at a medical facility. I have often thought, though, that more frequent interaction with medical personnel can benefit those who tend to set aside health issues to remain health conscious. Furthermore, a no-PEPM model will likely offer better ROI that can be realized from Day 1 of usage.

What is the Per Process Payroll Model?

Employers may notice a healthier workforce and decrease employee absenteeism by offering programs that address top health concerns, like weight management and mental health. According to JAMA, administrative expenses account for 15% to 25% of national healthcare expenditures annually. In addition, many administrative tasks are wasteful, costing the nation about $265.6 billion per year. PEPM and PMPM employee health plans may help reduce administrative complexity and allow HR teams to focus on more essential tasks like launching new employee benefit programs. The company pays out-of-pocket for their employees healthcare expenses as they are incurred.

Section 125 Premium Only Plan:

Capitation fosters misaligned motives by having vendors assume financial risk against program use. It puts the focus on limiting the overall amount of services delivered without tying outcomes back to the individual employee. As a field, EA has struggled and largely failed to relate costs to the actual outcomes produced – and capitation has exacerbated if not largely caused this problem.

• The PEPM insurance model supports greater engagement by placing a premium on the well-being of individual employees.
• The notion of “death by PEPM” recently occurred to me as I participated in a supplier session focused on collaboration and joint selling.
• I wondered, if all of these solutions are so effective, why doesn’t everyone have each one of them?
• It will only take about an hour of your time because we do all the heavy lifting for you!
• The insurer – for either a fully insured or partially self-funded plan – and the advisor or broker will be able to consolidate total cost into a single PEPM.
• PMPM, or Per Member Per Month, operates on a broader scale, considering the entire group of covered individuals (children, spouses) as a unit.

Some service providers may add extra fees for specific services, such as generating reports, updating employee information, or providing customer support. These additional charges can quickly add up and lead to higher overall costs than initially anticipated. Additionally, businesses may select less efficient payroll workflows or technologies to minimize the number of transactions, compromising process efficiency and potentially causing errors. It’s a great way for members to save on health care, prescription drugs, and more. In addition, it’s available on an employer-sponsored basis or as a voluntary benefit . The chart below shows per employee per month pricing for both types of coverage.

• It’s a great way for members to save on health care, prescription drugs, and more.
• This can result in an increased administrative burden for your HR or payroll team.
• Services with low utilization are not cost-effective, so it is somewhat startling they are not questioned more rigorously by our industry.
• Consequently, the treatment of diabetes requires continuous chronic care management.
• I agree that the PMPM or PEPM model doesn’t really benefit the employer because they pay regardless of participation.
• Additionally, the physical toll that medications and treatments can put on one’s body can limit their ability to perform certain tasks and be present at work.

Increase employee health and wellness with these five PEPM programs

At its core, a PEPM model is an approach to employee benefits that centers around individual employees rather than a group. Per Employee Per Month refers to a payment structure where employers contribute a fixed amount for each employee’s insurance coverage every month. One such approach gaining traction is the PEPM benefits model, or Per Employee Per Month. This model represents a departure from traditional insurance plans, offering employers a more flexible and cost-effective alternative. Let’s dive into the benefits of the PEPM model and explore how it stands out in comparison to its counterpart, PMPM (Per Member Per Month).