Health insurance renewals are certainly not the time of year that any employers look forward to. Premium increases cause heartburn and angst amongst employees because they know their deductibles are going to increase and/or their insurance contributions out of their paycheck. Open enrollment meetings, communications, and possible changes to plan design are all challenges for HR and employees alike.
Here are six strategies to mitigate those challenges and allow you to take action and be one of those employers who purchases health insurance and health care like every other aspect in your company. By the way, there is still plenty of time to act if your renewal is upcoming!
First, consider changing the way you pay for a plan through and unbundled partially self-funded program. The benefits you offer to employees can easily remain the same in their entirety, this is just a better way to pay for it. Unbundling the plan with an independent Third Party Administrator gives you control over your finances and cash flow, rather than prepaying your insurance costs to an insurance company. Get rid of BUCA.
Second, implement a plan utilizing Reference Based Pricing (RBP). RBP reimburses providers at a reduced yet competitive rate that is consistent with what they receive from Medicare plus a profit, rather than some discount off egregious prices. You don’t have to use it as a full replacement of your current plan – it might make sense to use it as a dual option and let employees choose between a higher cost PPO and a lower cost RBP plan that also has lower deductibles and contributions. Plan design is critical here.
Third, utilize an independent Pharmacy Benefit Manager (PBM) for your pharmacy program. Insurance companies PBM‘s are very expensive and they capitalize on numerous areas to make lots of money at your expense. Investigation into a transparent PBM can be highly successful to your finances as well as long-term sustainability.
Fourth, seek out a carve out specialty drug program. Specialty drugs are extremely expensive and are becoming more and more available to your members. Utilizing a specialty drug program can cut these costs anywhere from 70% to 100% depending upon what program you’re utilizing. Just like the pharmacy program above, repricing your actual pharmacy claims can give you your true sense of the significant savings you will realize.
Fifth, where possible utilize an on-site or near-site direct primary care clinic. Keeping your employees and their family members healthy has a direct correlation to your bottom line cost. Direct primary care is paid on a capitated basis and usually means no co-pays for services and is an inexpensive way to keep your workforce healthy and on the job.
Lastly and most importantly, seek out a broker or consultant who has your best interest in mind. If they have the majority of their book of business with BUCA, chances are that’s what they’re going to propose to you. Outrageous commissions and overrides do not give brokers or consultants any incentive to challenge the status quo. You need to know the right questions to ask and how to differentiate between brokers.
These strategies have enabled our clients to lower their cost dramatically and improve employee satisfaction and goodwill. These strategies have also allowed our clients to reduce their costs dramatically to approximately half of the national average. They been able to sustain these costs on a consistent basis, which allows them to actually increase any improve benefits rather than cost shifting and decreasing benefits to employees.
I recently attended a conference for those of us who are certified health Rosetta advisers, and there were a couple hundred like-minded brokers/consultants who are getting away from the insurance company’s Kool-Aid and taking this movement to lower costs and to their clients and prospects all over the country.
If you want to join the movement amongst employers who have already taken these steps, email me at [email protected] or call me at 970.349.7707.
