Changes target health care costs

Like many employers, Boh Bros. Construction Co. L.L.C. has seen its health care costs soar in recent years.

In 2005, it decided it had to do something about those costs by giving employees a financial interest in controlling health care expenses.

The company had offered employees several options: a health maintenance organization plan, a preferred provider organization-driven indemnity plan and a qualified high-deductible plan linked to a health savings account.

All three were funded with a $100,000 deductible administered by Boh Co. L.L.C., the administrative management arm of the construction company, and its third-party administrator. The plans covered 365 salaried employees and more than 300 of their dependents. The remaining 1,300 Boh employees were covered by separate plans or through union plans to which Boh contributes.

In 2005, though, after seeing the HMO plan's costs rise an average of 45% annually for several years, the company announced that it would eliminate its HMO in 2007. Then in 2006, after reviewing the PPO plan and seeing a continued double-digit cost increase trend, the company decided to eliminate that option as well in 2007.

"It wasn't that the company was saving dollars, it was more about getting people to recognize the cost of health care," said Susan Talbot, Boh's benefits administrator, who reports to Warren C. Perkins, vp, risk manager.

Once those costs are recognized, employees are more likely to keep tighter control of them by, say, moving to generic drugs from brand-name drugs, she said.

After Hurricane Katrina, Boh made more changes to its health care program.

After the storm hit, the company realized that the most effective way to communicate with employees was through the Internet, so it opted to offer online enrollment, network information and other benefits-related information, Ms. Talbot said.

The company also began offering a Web-enabled employee assistance program.