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@ swiftkennedy.com.
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