Shopping for group health plans and calculating the capital available to support healthcare options for employees is an integral part in most business strategies. By conducting due diligence and comparing plans, business leaders research ways to leverage their benefits packages as a strong and advantageous benefit to current and prospective employees – ideally, while also finding ways to cut costs.
It’s no surprise for you and your clients that the cost of employee health insurance is a sizable one already. Most High Deductible Health Plans require at least a 50% participation. Add to that, the glaring reality of premiums increasing year after year to match rising costs in health care and it’s no doubt businesses and organizations will be looking for ways to provide a solid benefits strategy while not breaking the bank.
As an Agent, Broker or TPA, you have witnessed with clients that shifting a larger portion of the premiums to employees can eventually become a point of dissatisfaction for their workforce, making it harder to attract and retain top talent. On the other hand, if benefits are not made available, employees will be equally unhappy.
So what can you do to assist your client’s in keeping costs manageable while still providing a benefits strategy that will work for their employees?
The good news is that there are ways to implement a solid benefits strategy that will not only retain the employees that keep their business running, but can also be used as a recruitment tool for candidates to join their organization. For example, offering a benefits package built around an affordability based medical plan could be a very attractive recruitment tool when targeting hourly, seasonal or part-time employees. Depending on the workforce your client utilizes, a high deductible health plan may not be the most cost effective or advantageous option.
We’ve put together some popular cost containment measures below you may find beneficial when presenting plan options to clients. Here are 3 Ways to assist clients with managing employee healthcare costs :
Changing plans or how they are funded
Encouraging lower-cost services
Build a healthier workforce
Be smart about plan choices you are offering
Providing the cheapest HDHP options with the most benefits may not be the best strategy – even though it may appear the benefits available far outweigh the cost to your client and employees. If your client or their employees can’t afford the premiums or the forever increasing deductibles when and where they need the plan, your client’s organization will pay the price with higher turnover of employees and reduction in talent.
Rather than presenting the lowest-cost plan, provide the best value. That might look different depending on the needs and demographics of your clients' employees. And the strategy will vary depending on the size of their business – what works for large companies might not make sense for smaller employers or businesses operating in a space with high turnover rates of employees. For some employers that may be a Level Funded plan utilizing Stop-Loss insurance to minimize excess claim risk. By taking a thoughtful approach, you can strike the right balance between cost and benefit, ultimately giving your client a tool for employee retention and recruitment instead of an overpriced, underutilized plan option which will end up costing more than the value it provides.
Here are some things to consider when weighing the options you are providing clients.
Evaluate what your client’s employees really want and need
All employees want awesome benefits, but not everybody wants, or needs, the same level of healthcare. Take into account employee demographics and utilization data in determining what to offer as part of the benefits package. Consider recommending your client conduct a survey of their employees to gauge what they want. Doing so can also encourage employees to be actively involved in their health care which in turn could lower costs as well.
Help employers find the right care for their employees by offering flexible options rather than a one-size-fits-all approach. For example, some groups or employers may be looking for an affordable medical benefits plan that has a copay with no deductible that supports preventative care for healthy employees who are seeking a lower-cost option.
By providing flexible options, you can meet the needs of your clients and their workforce without breaking the bank.
Before recommending a switch to traditional self-funding, consider level-funding
It’s been proven that self-insurance has some appealing benefits: no premiums, exemptions from state mandates and requirements, and savings on taxes and assessments. Summed up in just one word is the major drawback to self-funding: RISK
There are ways to mitigate some risk and unpredictability of claim-related costs.
A level-funded plan limits the risk from big claims while providing the financial benefits of traditional self-funded plans. Level-funded plans can also be backed with stop-loss insurance for excess claim risk protection. With cost savings of nearly 60-70% below traditional HDHPs, we see a number of businesses; especially smaller employers and carve-out classes of large employers utilizing this as their plan option. With the proper resources, and the right partner, there are plenty of good reasons to consider level-funding.
Fundamental Care® Tri-Level Limited Day Plan may be a perfect fit for businesses looking to mitigate cost and risk while still being able to provide a viable healthcare option. Our expense-incurred plans make it easier for employees to budget for their healthcare expenses. Since there is no deductible, employees simply pay a copay for covered services. Our plans take care of the rest. For employers, these plans provide protection from both the "A" and "B" penalties, and the built-in level-funding also means predictable costs. As a result, these plans are unlike any other health plans in the market today.
Recommend plans with lower cost services
Low-cost health services are in high demand. As the COVID-19 pandemic has progressed, the use of telehealth has reached new heights in its use. While this would appear to be out of necessity, individuals have come to value the convenience of virtual care for a number of health needs.
Some of the supplemental benefits to our Fundamental Care® Tri-Level Limited Day Plan include the follow:
Telemedicine
EAP - Behavioral Health
Personal Health Tools
Some may wonder how the availability of low cost services might impact employer costs. Here’s how: with access to lower-cost services, employees are more likely to choose lower-cost plans. This results in lower claims costs for level-funded employers.
Plus, access to low-cost, convenient options can improve the likelihood that employees will seek out and receive care when conditions are less severe and more treatable with lower-cost therapies thus avoiding down time in the workplace.
Assist your Clients in promoting a healthy culture to lower medical plan costs.
During open enrollments or onboarding, your client’s employees are presented with health plan options and based on their anticipated medical needs they will select the plan appropriate for them. If the employees are healthy, your client will likely opt for a lower-cost plan. That’s why finding ways to help your clients employees get and stay healthy is in the best interest of your client’s bottom line.
Ensuring your clients and their employees understand what their plans provide as far as coverage for preventive services is a good start. But there’s much more they can do to encourage healthy living, and it begins in the workplace.
Most people spend a large part of their adult lives working. So, it makes sense that the workplace provides a prime opportunity to encourage healthy behaviors. According to the Centers for Disease Control and Prevention, employee wellness programs provide benefits such as:
It increases healthy behaviors such as dietary and physical activity changes
Improves employees’ health knowledge and skills.
Employees are encouraged to get preventive health screenings, immunizations and follow-up care
Coterie Advisory Group offers Fundamental Care® Tri-Level Limited Day Plans with supplemental benefits like myEwellness which makes it easy for you to help your clients and their employees become active participants in their health. Employees can take advantage of resources such as personal health tools, educational videos, as well as, diet, fitness and health strategies.
Summary
While some cost containment measures do mean your client may sacrifice some coverage to maintain budgets, avoiding the passing of exorbitant healthcare costs downline can prove to be beneficial in employee retention and acquisition. Advisors, Brokers and TPAs often have the opportunity to provide employers with objective guidance on what health coverage option makes the most sense for their employees, all while assisting business leaders in charting a path to a more cost-effective model utilizing multiple cost containment options.
Coterie Advisory Group has life and health insurance licenses in all 50 states and offers Affordability Based Medical Plans. The founders of Coterie are comprised of a team of insurance and benefits professionals who have dedicated their careers to the benefits marketplace and have great pride in our business on making it easy to provide affordable and unique health insurance options for employers and associations.
Fundamental Care® is managed by Coterie Advisory Group, Inc. Coterie Advisors is an Arizona-based insurance program manager and national marketing agency.