Recently, health care has seen a profound transformation. In order to improve their members’ health and access to benefits, Health insurers are redefining and revamping the ways they insure. Moreover, employers are emphatically looking for ways to better support their current and prospective employees when recruiting. Prioritizing health and wellness are at the forefront of Consumers minds, including both employers and employees. With that being said; Brokers, Agents, and TPAs are relentlessly searching for new, customizable options to provide their clients.
Emanating from the insistence for more health care options, mitigated risk, and customization, there has been a significant increase in demand for level funded health plans. As the popularity of level funded plans have grown, we have seen a dramatic increase in information requests for our affordability based medical plans. And more specifically our Fundamental Care® Tri-Level Limited Day Plans. As more brokers and consultants highlight and offer employers and groups these plans, they recognize and welcome the predictability, funding diversity and innovative products to their portfolio. This often affords their clients immediate cost savings and more tools to leverage benefits as a hiring and employee retention instrument.
By offering the flexibility and cost saving potential of a self-funded plan and the piece of mind knowing there are benefit options for their employees, employers of all sizes have been looking to participate in level funded health plans. Whether company wide or for carve out classes of employees within their organization, employers are leveraging these plan options. Here at Coterie Advisory Group, Inc. we have seen some of the larger increases of participation from small and midsize employers while also seeing an influx from carve out classes within large employers as well. Brokers and consultants have seen the benefits of adding these options to their portfolio of offerings to clients. Having the additional benefits options available have ultimately resulted in attracting new and purchase ready customers once they reviewed the choices available to them.
As noted above, the popularity and usability of Level Funded Health Plans have grown exponentially. According to the Kaiser Family Foundation Survey in 2020, 13% of small firms were using level-funded health plans and 31% of covered workers were in either self-funded or level-funded plans, an increase from 24% the year prior(2019). The most recent survey (KFF- 2021 Employer Health Benefits Survey) has overshadowed previous growth with 42% of small firms offering health benefits now utilizing a level funded plan.
Here are a few items as a broker or consultant you may see as a result from the rise of demand in level funded health plans.
1. Clients looking for transparency, predictability, and control of health plans
Employers of all sizes have consistently noted the most advantageous elements of level funded health plans is transparency and predictability. Allowing businesses to prepare budgets and plan for costs; these plans are unique, offering understanding and discernment into the maximum cost for the year. This allows a business to plan its year accordingly and minimize costs while managing employee retention and recruitment.
Due to fixed rates, risk is dramatically mitigated , making this an ideal option for most businesses needing predictability within the confines of their budget. Also, with an increase in flexibility and greater cost control, companies have the potential for higher savings.
A good example of level-funded plans would be our Fundamental Care Tri-Level Limited Day Plans. Through this product offering, companies make twelve level monthly payments each year that covers¹ the costs for their plan, with the potential for earning a refund² at the end of the year. For excess claim risk protection and refund potential, stop-loss insurance is utilized. If claims are more than projected, the employer uses the stop loss insurance for protection.
2. More employers will want to save money while still prioritizing health
Health insurance is traditionally the second highest operating expense for businesses following employee wages. Finding cost-effective solutions remains a top priority for employers of all sizes. Level funded health plans often offer businesses greater cost control mechanisms and larger prospective savings, an added benefit to employers as the US economy hopefully begins to recover post-pandemic and people continue to go back to work.
As proven over the last year of the pandemic however, during an economic downturn, businesses will continue to seek new options, especially when it comes to limiting their costs. Fortunately, these plans provide this option.
3. Customizable plans unique to your clients
The interest for level funded health plans continues to grow in part because of the abundance of customization that fit the distinctive health and wellness needs of employers. Plus, with other integrated solutions and cost-controlling strategies, customers can be drivers of their employees health care experiences while being able to focus on employee retention and other key drivers of their businesses.
As employers evaluate health insurance options for their company, and you, as their broker or consultant begin to provide options, know and understand why level funded health plans and affordability based medical plans are not only viable options but as appears from data, a prominent one.
We offer Affordability Based Medical Insurance Plans
Coterie Advisory Group’s Fundamental Care® programs are Affordability-Based Medical Plans which are designed for various niche-markets, including: small business and their employees, part-time, hourly, seasonal employees at enterprise-level companies, independent contractors, gig-economy workers, and association members. Fundamental Care is designed to meet the needs of the underserved, by providing access to unique and affordable health insurance benefits on a guaranteed issue basis. Limited-Day and Limited-Benefit Indemnity plans can be customized and structured with affordable premiums and no deductibles. Coterie Advisor's can also provide Minimum Essential Coverage (MEC) and bronze-level Minimum Value Plan (MVP) options for client's needing a solution for their full-time equivalent employees. The combined offering of the Fundamental Care plans is unique to the marketplace. Through Coterie's Affordability Based Medical Plan Strategy, the plans not only provide needed healthcare to the insured employees but also offer companies a strategy to improve recruiting and reduce turnover by rewarding a carve-out class or more-tenured employees.
Fundamental Care offers two Affordability-Based Medical insurance options which can assist:
An employer-sponsored, level-funded, Limited-Day Health Plan for small to mid-size employers and carve-out classes of large employers. Plans cost 30-40% less than HDHPs with no deductibles. A near-comprehensive plan that both employers and employees can afford.
THREE LEVELS OF PLAN
An affordable Bronze MVP plan – with no deductible
An affordable mid-range MEC plan with limited days of hospitalization– with no deductible
A Value priced outpatient expense MEC plan- with no deductible
A Limited-Benefit Indemnity Plan for large employers with part-time, hourly, and seasonal employees; and for associations and affinity groups. An affordable option for the uninsured that provides coverage for basic medical expenses.
Available with or without Minimum Essential Coverage (MEC) and Minimum Value Plans (MVP)
Both can be customized and structured with affordable premiums and no deductibles. The plans are high in potential coverage, guaranteed issue, and include upfront, day-one benefits.
Coterie Advisory Group, Inc. is a National insurance program manager and consultative advisor who delivers Affordability Based Medical Plan Strategies to help benefit brokers, consultants, employers, and associations in the benefits industry.