Try a cheaper al­ter­na­tive for group health in­surance

The Times-Tribune - - Business -

With so many changes in health in­surance on the hori­zon, one thing that will re­main con­stant is that busi­ness own­ers and hu­man re­source man­agers will con­tinue look­ing for less ex­pen­sive ways to in­sure their work­force. As a re­sult, many are now turn­ing from tra­di­tional, fully in­sured em­ployee ben­e­fit plans to al­ter­na­tive fund­ing op­tions, such as level-funded and self-funded poli­cies.

These em­ploy­ers are par­tic­u­larly at­tracted to the po­ten­tial for cash re­funds and lower ad­min­is­tra­tive costs, as well as the flex­i­bil­ity and access to claims data that these poli­cies of­fer. These and other fac­tors have made al­ter­na­tive fund­ing op­tions pop­u­lar with large com­pa­nies for many years, and now com­pa­nies with as few as 25 em­ploy­ees are also start­ing to reap the ben­e­fits.

A key el­e­ment of lev­el­funded and self-funded plans is stop-loss in­surance, which pro­tects em­ploy­ers from un­ex­pected fluc­tu­a­tions in claims. If a plan’s mem­bers have fewer cov­ered claims than pre­dicted, the em­ployer may be awarded a cash re­fund from the sur­plus, but if the claims ex­ceed the pre-funded amount, em­ploy­ers may not be re­spon­si­ble for the ex­cess claims ex­po­sure.

One of the big­gest ad­van­tages of these plans is that em­ploy­ers re­ceive access to in­for­ma­tion about their em­ploy­ees’ health care us­age pat­terns. This claims data al­lows them to con­trol costs by iden­ti­fy­ing the ben­e­fits that their em­ploy­ees most of­ten use, and cus­tomiz­ing their plan de­signs so they are more cost ef­fec­tive and bet­ter meet the needs of their work­force.

These poli­cies may also in­clude na­tional provider net­works, physi­cian based telemedicine pro­grams, pre­scrip­tion drug re­bates, well­ness in­cen­tives, em­ployee health concierges, on­line claims and ser­vice por­tals, and many other fea­tures.

Em­ploy­ers who are con­sid­er­ing switch­ing to a level-funded or self­funded em­ployee ben­e­fit plan should con­sult with a health in­surance bro­ker to help them weigh the pros and cons. A bro­ker who is ex­pe­ri­enced with these poli­cies and un­der­stands their in­ner work­ings can be in­valu­able in help­ing them de­cide whether this is the right op­tion for their busi­ness.

JERRY CALISTRI is pres­i­dent and chief ex­ec­u­tive of­fi­cer of Swift Kennedy & As­so­ci­ates, an in­surance bro­ker­age and con­sult­ing firm spe­cial­iz­ing in group em­ployee ben­e­fit plans, in­di­vid­ual poli­cies, and se­nior in­surance needs, which has of­fices in WilkesBarre, State Col­lege, Williamsport, and DuBois. He can be reached at jerry@ swiftkennedy.com.

JERRY CALISTRI In This Cor­ner

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