The Times-Tribune

Try a cheaper alternativ­e for group health insurance


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@ swiftkenne­

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