Renewal rate too high? What to do about your group plan

Posted by Emily Kubis on Wed, May 23, 2018 @ 08:05

Before you consider cutting your group plan benefits, read this.

If you’re a fully-insured employer who just received a huge rate hike on your group plan renewal, you may be considering cutting benefits or changing your plan design.

Instead, you may want to consider a change to your funding strategy. Employers have more choices than they realize when it comes to financing their employees’ healthcare. Purchasing a fully-insured health plan may be what you’ve always done, but there are a lot of alternatives that aren’t as complex as they seem.

These strategies can potentially save your organization tens of thousands of dollars, while allowing you to actually expand benefits options for your employees.

(More: How a 40-employee group saved $100,000 with reference-based pricing.)

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Tags: health insurance small employers, Self-Insured, self-insurance, self-funded, reference based pricing, renewal rate

Reference-based pricing: The PPO alternative

Posted by Woody Waters on Fri, May 18, 2018 @ 09:05

Do you know the true cost of your healthcare

With the cost to provide a health plan for employees continuing to rise year after year, many business owners are at a loss for how to continue to pay for coverage while still remaining profitable. Many are looking for a new way to offer benefits to their employees, and there are options available that brokers can present to clients looking to go beyond the healthcare status quo.

Do you know the true cost of your healthcare?

PPOs are overwhelmingly the most popular form of healthcare for employer-sponsored plans. Most PPOs claim that by utilizing their network, members are given a discount off of the regular cost of services. But PPOs typically keep the true cost of the medical services a secret, so most of the time, businesses don’t have a clear understanding of the cost savings. With the lack of transparency of what the true cost of service is, and premiums continuing to increase year after year, more and more employers are questioning if PPOs are actually the most cost-effective type of healthcare for their business.

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Tags: brokers, reference based pricing

Reference-based pricing: What about balance bills?

Posted by Emily Kubis on Wed, May 09, 2018 @ 08:05

Solutions for employers

Reference-based pricing is a new way for self-insured employers to pay for employee’s medical costs. Instead of using a traditional insurance carrier’s network, employers simply pay hospitals a percentage in excess of Medicare’s reimbursement rate for the same service.

Why would employers adopt this plan?  Generally, the benefit that insurers provide to employers are their network discounts for services. But with healthcare prices skyrocketing, employers are questioning whether this strategy provides enough value.

(More: How a 40-employee group saved $100,000 with reference-based pricing.)

Here’s how hospital pricing usually works.

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Tags: health insurance small employers, Self-Insured, self-insurance, self-funded, reference based pricing, balance billing

What is the Medical Loss Ratio?

Posted by Emily Kubis on Fri, Apr 06, 2018 @ 08:04

Is the MLR driving up employer healthcare costs?

A piece of the Affordable Care Act that seeks to cap insurer profits may be driving employer healthcare costs in some cases.

The ACA’s Medical Loss Ratio intended to cap the profits of insurance companies by requiring them to pay out 80 percent of what they collect in premiums, leaving 20 percent for administrative costs, marketing and profit.

The reasoning behind this was to put eight out of every ten insurer dollars toward claims, as opposed to other parts of their business.

However, this also means the maximum profit insurers can collect is 20 percent of premiums. As a result, the avenue to profit growth is to increase premiums altogether, especially for those not surpassing the 80 percent threshold.

Employers are left to question whether insurers are best positioned to help employers lower medical claims, and what really drives annual premium increases of 10 percent, 15 percent, 20 percent or more.

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Tags: employee benefit adviser, employer digest, health insurance small employers, Self-Insured, self-insurance, self-funded, reference based pricing, network discount, Medical Loss Ratio, healthcare costs

What is an insurance network discount worth?

Posted by Emily Kubis on Wed, Apr 04, 2018 @ 09:04

Consider the value of insurance discounts

Some self-insured employers are adopting new strategies to pay for their group benefits plan. These plans, including direct contracting with hospitals or reference-based pricing, typically do not use a traditional insurance network.

Many employers are finding they can obtain better value for the services they pay for by either negotiating with the hospital directly, or by paying an excess of Medicare’s reimbursement rate.

Why would employers want to adopt these strategies? Generally, the benefit that insurers provide to employers are their network discounts for services. But with healthcare prices skyrocketing, are employers getting the most value through this set up? Let’s look at how it typically works. 

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Tags: employee benefit adviser, employer digest, health insurance small employers, Self-Insured, self-insurance, self-funded, reference based pricing, network discount

How a 40-employee group saved $100,000 with reference-based pricing

Posted by Emily Kubis on Fri, Mar 23, 2018 @ 10:03

A more cost-effective way to pay for healthcare

Reference-based pricing is a new payment model for employer-sponsored healthcare. Through reference-based pricing, self-insured employers forgo the traditional insurance contract. Instead, employers pay employee claims directly to hospitals and providers, typically in excess of Medicare. In other words, employers pay the hospital 140 percent of what Medicare would reimburse for the same service.

This strategy can save employers thousands of dollars per year—below is a case study of one of our clients who saved $100,000 on premium and plan costs by transitioning to this strategy.

But why would an employer want to forgo the traditional insurance contract? A piece of the Affordable Care Act is the reason why.

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Tags: employee benefit adviser, employer digest, health insurance small employers, Self-Insured, self-insurance, self-funded, reference based pricing

What are "Centers of Excellence" networks?

Posted by Emily Kubis on Wed, Jun 07, 2017 @ 11:06

The next level of reference based pricing for employers

Walmart has made healthcare headlines over the last few years with their innovative “Centers of Excellence” program for employees. 

For employees needing certain surgeries—most recently, spinal surgery was added to the list—Walmart will pay for the entirety of the procedure, as well as travel, lodging and an expense allowance for the patient and a caregiver.

To take advantage of this benefit, eligible employee must receive the procedure at one of the company’s “Centers of Excellence” facilities around the country.

 GE and Lowe’s also offers a similar Centers of Excellence program—but why, and how do they work?

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Tags: employer digest, employers, solutions for employers, health insurance small employers, reference based pricing

What is reference based pricing, and how does it benefit employers?

Posted by Emily Kubis on Thu, May 11, 2017 @ 11:05

Innovative payment approach gaining traction

One of the more revolutionary healthcare cost-containment efforts undertaken by some U.S. employers is “reference based pricing.” This option for self-funded employers seeks to limit costs by providing a fixed amount for certain healthcare services.

Reference based pricing is typically used for procedures with high cost variation but low quality variation, like joint replacement surgeries or certain medical tests.

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Tags: employer digest, employers, solutions for employers, Self-Insured, self-funded, self-funding, reference based pricing, value based pricing

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