- Health insurance companies, employers, and the workforce take a number of different steps to ensure that the best decisions are made in terms of health plan policies and covered benefits. For a variety of reasons, some businesses choose employer-sponsored health plans instead of relying on commercial payers. The employer-payer relationship has struggled in recent years due to increasing costs and a general lack of price transparency.
Michael Booth, Executive Vice President of Employee Benefits at the insurance brokerage firm HUB International, discussed in an interview his support of employer-sponsored health plans.
“I’m a huge proponent of self-funding and partially self-funding even down to the 25-life mark,” Booth told HealthPayerIntelligence.com. “We continue to analyze the data as it relates to the fully insured marketplace. Our data analytics team does a fair amount of self-funding feasibility research on both medical and dental insurance. If you partner with a carrier that provides the opportunity to partially self-fund, even where there may be a graded level function, I strongly encourage employers to take a look at it, even if their data is limited.”
For employers unable to transition to partial self-funding, Booth suggests pursuing reimbursement arrangements.
“In the event that they aren’t comfortable taking the plunge into a partial self-funding mode - yes, the advent of consumer-driven health plans has helped - one of the things we’ve had a lot of success within the fully insured marketplace is doing reimbursement arrangements,” Booth continued. “Creative plan designs are possible because they really give a fully insured payer an opportunity to self-fund certain corridors of the deductibles, the coinsurance, and the out-of-pocket max.”
Using data to make decisions to provide employer-sponsored health plans or to partially self-fund is necessary, but businesses unable to take the plunge can still work with consultants to make some changes to the health plans they offer.
“Even if they are in a state too small to get their true claims experience to do a thorough self-funding feasibility look-back, there are ways for clients to get their hands on some claims experience when they deploy health reimbursement arrangements on their plan designs, including HSAs, HRAs, and partial self-funding,” explained Booth. “It will allow employers to make wise business decisions based on the claims data itself so that you know where your outliers exist. Also, partnering with a consultant can give you three to four different tweaks you can make to the plan design.”
When it comes to the employer-payer relationship, businesses have faced cost-prohibitive coverage options and challenging reporting requirements. Booth mentioned how staffing companies have implemented technology solutions to address some of these obstacles.
“We’ve found that breaking into the group employer medical insurance market is very cost-prohibitive,” added Booth. “So one of the biggest challenges that we’ve been faced with when delivering for employers these last several years as it relates to healthcare reform specifically is the reporting requirements. Interestingly enough, at the American Staffing Association, we have a huge contingent workforce practice, and one of the biggest challenges I've heard about from staffing companies is providing technology solutions to help organizations efficiently manage eligibility, billing, and reporting requirements.”
Michelle Clark, Central Region Health & Performance Director for HUB International, also spoke about some steps that employers have taken to reduce their healthcare spending and potentially improved the employer-payer relationship. Through wellness initiatives, employers could keep a healthier workforce with less need for pricey medical services.
“The results [of wellness programs are] incredibly varied company by company based on what it is that they’re doing in terms of programming, support, resources, tools, and education for their employees," Clark explained. "Is this a part of the underlying current of the culture of their organization? The two - company culture and wellness program participation - are interconnected. You can’t have a company in which you’re expecting people to be healthy when you’re not doing all the things that you can to support them.”
“This has to be a part of who you are as an organization. When people walk into your place of business to work eight hours a day and they’re being told to eat better, exercise more, and take care of themselves, but their work environment doesn’t support that.. there will be a problem when involving them in wellness programs,” said Clark.
Booth went on to explain some steps HUB International has taken to keep costs down for health payers, strengthen the employer-payer relationship by using data analytics technology, and bring savings to their clients.
“We have secured national - if not global - contracts for payers as it relates to their pharmacy and PBM relationships,” Booth noted. “We actually have an aggregator relationship where we shop all the third-party PBMs, which typically applies to our larger self-funded groups. We’ve done the same thing on the stop-loss front, where we have a true intermediary we’ve partnered with, which goes out in individual and aggregate stop-loss marketplaces. With the volume that we drive to them, we’ve seen numbers come down anywhere from 15 to 20 percent on both stop-loss and pharmacy spend.”
Booth also discussed the importance of HUB International investing in data analytics, employee education, and redesigning communication and messaging toward the workforce.
“The other thing I would add is the investment we’ve made around data analytics. Each of our clients gets a financial analyst assigned to their account. That data analyst's sole responsibility is to, month-over-month, review the claims data, look for outliers, and then take that back to the account team to be able to bring proactive solutions to mitigate any risk factors we find,” said Booth.
Financial analytics plays a key part in reducing spend for payers, employers, and the entire workforce, Booth explained.
“At the time of open enrollment, today it’s about executing a multi-tier strategy of client and employee engagement, and utilizing all the mediums available to educate employees on how to be better consumers throughout the plan year,” he advised. “As our data analytics team finds outliers of behavior, or cost factors that are outpacing the benchmarks, we can immediately deploy our communication and design team to certain subsets of employee locations and certain demographics of employees to get catered messaging and information at their fingertips. This allows employees to make better business decisions on behalf of their own interests and better understand the employer and payer spend.”