Health Insurance is Changing
Updated: May 14, 2020
Health Insurance is changing. In a world where change is inevitable – health insurance no longer needs to be a burden to employers.
Creativity is the key to long term success.
Imagine not having to change benefit plans or increase employee contributions every year. Put into practice a benefit plan where your HR department no longer is frustrated by annual plan changes and employee confusion and consternation.
Employers with 100 or more employees can manage all of this by reimagining how to pay for the second most important expense to an employer after payroll.
CEO’s and CFO’s should embrace a health care plan where the employer keeps all of the profit with little or no downside risk. Your business can still use the nation’s largest medical networks, design any type of plan you find suitable to your business model and the needs of your staff all while directly reducing the cost to insure your employees.
Traditionally your insurance program is fully insured by either a regional or national insurance provider. Your broker helps you design a plan and sends the design you want out to market. One or more carriers are tasked with providing you a quote. You hope your broker will negotiate and get you the best possible premium. Depending on our history you may or may not get quotes from more than one carrier.
Once all quotes are received by your broker they will review with you and help you determine what the best option available might be.
Let’s use an example.
Last year’s premium was $1 million. Your carrier informs you 90 days prior to renewal that your premium will go up 28%. Ouch!!
Your broker goes through the process and lets you know after shopping and changes in plan design that the increase will only be 12% - or an additional $120,000.
Now comes the hard part.
Who is going to pay the increase? It can only be one of 2 choices – the business or the employee. Keep in mind that this new lower increase was already due to you changing the plan design by increasing co-pays and deductibles. All things which put additional burden on your staff. Now you also have to choose do you put more financial burden on your staff or does the business take a hit to the bottom line!!
Now the creative choice.
Annual renewal notification comes in and due to increased claims the insurance portion of your benefit plan will also go up 28%. But with the innovative choice of plans the insurance portion cost was only $100,000. So even a 28% increase would only amount to $28,000 – and that is before shopping the insurance to other carriers and negotiating.
By the way – this is all without changing the plan – no increase to the employees.
The reason this works is you as an employer can choose to protect your bottom line by insuring only as much of your benefit plan as you would like to. You choose what your maximum out of pocket cost will be. If claims are less than expected you save even more. If claims are more than expected your insurance carrier will pay.
I know your interest is peaking. This plan design is about your willingness to put your business and employees first. You determine the benefit structure. You determine whether the profits stays or goes. You get to win for a change.
Let us know if you would like to learn more.