For Employers With 25 to 500 Employees - Change Your Plan
Navigating the switch to a partially self-insured plan
Switching to a partially self-insured, fully funded, health care plan with healthcare cost management strategies can significantly reduce your delivered cost of healthcare and increase the “Quality of Life” of all your insureds. Unlike your fully insured health care plan, the savings stay within your business, not your insurance company. We know because we've done this for businesses, Unions, Governments and more. We provide measurable results within your client’s group plan.
Choosing to self-fund an additional deductible that is on top of the deductible your employees already have, is a simple concept and potentially create up to a 40% savings in healthcare costs. The employer funds Doctor Visits, pharmacy and the additional deductible after that employee has a claim that goes beyond their current deductible. The employer has much more control and full transparency in their plan. We're experts at managing healthcare costs associated with plan participant’s diagnoses, compliance with treatment and delivering health management directives.
But first, we have to navigate the switch from a fully insured plan to the partially self-funded plan. The process includes risk identification, risk management, implementing a new philosophy of benefit design and identifying necessary insurance to transfer major risk to the insurance company.
Get Accurate Quotes
If financial benefits are illustrated by switching, this strategy becomes an easier sell, but businesses should fully understand that the goals are; increasing the “Quality of Life” for the insureds, increasing productivity and flattening the renewal cost. You must carefully weigh the benefits against the potential higher first-year cost that comes with achieving disease treatment compliance which comes in before the savings in delivered healthcare after compliance is achieved.
Study the data from your current carrier, especially the difference between claim history and premiums or the cost between fully insured and partially self-insured. Stay fully insured if the cost for partially self-insured is more than the fully insured cost. Remember that a premium refund is made to the business for all un-spent premium dollars at the end of the policy year. After completing the risk identification, an immediate financial reward may not be there.
Brokers and TPA’s Have an Important Roll
Unless your prospect has an in-house benefits team or specialist, a health insurance broker is a must. You have the opportunity to become the broker they trust, which has their company's best interests at heart. Evaluate the options they have and service our product that you implement. Be suspicious of other Broker options that cannot provide documented treatment compliance of all of the plan participants along with evidence of ROI for the prospect.
The Certified Broker and third-party administrator, or TPA, is the crux of a successful partially self-insured health plan. When making your presentation, be sure to assess:
- Physical infrastructures. Meet the people who will be handling the claims, from the nurse case manager to the biller. Look for a sense of calm and workflow organization as work is being accomplished.
- Technical infrastructures. Investigate how their systems are maintained and the level of redundancy in their applications. Ensure a viable disaster recovery plan is in place.
- Payment cycles. Ask if they will alter their payment cycle to meet your needs; many will. Your client’s employees should not have to sort through bills from their health care providers that are "insurance pending."
- Explanation of benefits. Evaluate samples for clarity. Make sure the explanations are accurate.
- Communication methods. Employees need access to information outside of work hours. Ask about evening and weekend call-center operations. Look for self-service functions such as address changes, identification card requests, and claims history on the customer Web site.
- Call center service. Expect the highest quality of service but do not rely on the TPA alone for verification.
- Review the reports that claim diagnosis treatment compliance, the action that is taken to achieve disease treatment compliance, how
- ROI is accomplished and reported. Most all insurance companies and TPA’s claim effective case management, predictive modeling and ROI. Ask to see proof of the action they take that will create measurable results for your prospect.
Educate Yourself on Integrated Stop-Loss Insurance
Stop-loss insurance does just what the name implies; it stops the financial losses of a claim. Partially self-funded companies need to buy integrated stop loss or specific and aggregate forms of this "reinsurance." Purchasing additional insurance to eliminate claim lasers and either fully funding the plan monthly or adding a “cash flow” and terminal liability protection is necessary.
Specific stop-loss insurance sets the dollar value the company pays for claims on each individual person. Aggregate stop-loss sets the sum for the plan as a whole. A higher stop-loss deductible will lower the premium while increasing the risk the company assumes. Understanding the ins and outs of stop-loss will ensure you are making an informed decision when setting the deductible amounts -- not a decision made on price point alone.
Fully Fund the Plan
Fully funding a partially self-insured plan can provide a cash refund at the renewal to a company. Claim expenses are paid only if they occur, rather than in set monthly premiums to a traditional insurance contract. Create a separate account and transfer renewal refunds to it to create reserves annually.
Mismanaging these funds can eliminate the potential to reduce benefit costs for your plan participants.
Let the funds accumulate in this account, for at least two to three years. By the third year, your client will have enough data to understand their benefit needs and costs, so that adjustments to the benefit-cost to their employees can be evaluated.
Educate All Plan Participants as Consumers
The correct strategy will create employee responsibility. Turn plan penalties into incentives so that disease treatment compliance becomes 100%. Determine “root cause” of each individual’s non-compliance before acting. Communicate early and often for success.
Be upfront with employees about impending changes. Include the reasons for implementing a health management strategy-increasing their quality of life. Switching to a partially self-funded health plan and what the new plan will entail. Take as many opportunities as possible to educate employees on how their actions affect them, the company, and the plan. Create an understanding that if their quality of life increases, the company will be more productive and delivered healthcare costs within their group will stabilize which saves everyone money.
Employees need to understand how their lifestyle choices drive healthcare cost and are educated on how small changes that they can make saves money for them and increases their “Quality of Life”. The “Health to Wealth” module illustrates their benefits from the savings through disease treatment compliance, company profit sharing, and a new corporate health management program.
The company, without reducing the richness of the plan, should be able to achieve flat renewals for several years.
Continue to work to creatively drive behavior change with plan participants. Be compassionate with employee interaction while moving toward 100% disease compliance. There will be bad claim years; however, that is when you need our technology the most. Research says companies will have high claims one out of every five years. Our technology excels at forecasting disease progression and delivering health management directives to the plan participants that are identified through risk stratification and helping them to reduce their disease progression so that the next event/expenses are diminished.