By Michael Galardini, JRG Advisors | PTC Corporate Coverage Group
When it comes to health plan costs, employers continue to search for strategies that lower healthcare insurance premiums. Raising deductibles or copays, providing an HSA or HRA, moving to an EPO or Tiered Network Plan and changing insurance companies usually only produce temporary or minimal savings.
Employers must realize that it is the cost of medical claims that most significantly drive renewal increases. Historically, only large employers with 100 or more employees were able to receive claims data from insurance companies. With a customized benefits strategy, even employers with as few as five employees can engage in claims management services to control costs.
The Pittsburgh Technology Council Corporate Coverage Group (PTC CCG) team at JRG Advisors noted that a growing trend to help control costs is to consider buying a level-funded, self-insured benefits plan.
Self-insurance has long been associated with large employer groups, while smaller employers have been hesitant to consider these plans because they feel the risk may be too great. They continue to pay fully insured premiums even though they may have incurred low claims costs. But the JRG team indicated that “level funded self-insured programs enable an employer to have a fixed monthly premium.
“Level funded self-insured programs enable an employer to have a fixed monthly premium. At the end of the benefit year if the claims are lower than the paid premium, the employer receives money back. The employer never pays more than the monthly premium and only pays for claims incurred.”
At the end of the benefit year if the claims are lower than the paid premium, the employer receives money back. The employer never pays more than the monthly premium and only pays for claims incurred.”
Establishing a level-funded, self-insured program is the first step to a claims management strategy. This approach enables an experienced benefits consultant to obtain the individual claims information for each plan participant and to utilize the data to develop a claims management strategy aimed at reducing claims and subsequently the plan costs.
Claims management services focus on facility costs, medical services, prescription costs and disease management. Benefits consultants utilize cost transparency tools combined with the individual claims reports to identify and recommend lower cost services. Employee education and engagement is essential.
A communications portal can be established to share price comparison information with employees. In most benefits programs, employees have out of pocket expenses with deductibles or copays. The transparency tool shares lower costs for medical services and facility charges with employees.
This is a win-win because it reduces claims costs for the employer and lowers out of pocket costs for the employee. Reports can also be shared with the employer using de-identified claims data to illustrate the cost savings.
One of the largest costs associated with any health plan is found within prescription drugs. Utilizing the prescription claims data, pharmacists work with the doctors to find alternate prescriptions that are lower cost. The communications portal then provides the lower cost option(s) with the employee. Reducing prescription cost can significantly lower the plans’ claim costs.
Lastly, not paying attention to disease management only guarantees high dollar costs to a health program. Individuals with ongoing medical services need help finding the lower cost options for ongoing and frequent testing, facility visits and prescriptions. The coordination of critical and ongoing care for employees with serious medical issues is essential. Care managers can be assigned to these individuals and the use of valuable concierge services and cost transparency tools help the employee.
The most effective way to stabilize and lower premiums is to establish a claims management strategy. The most effective strategy requires a customized approach that engages employees to understand the costs of services. Lowering the claims costs will provide the employer the ability to control health insurance premiums and costs.
Call PTC CCG at 1-855-717-2864 to design your health care cost savings strategy!