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SUITE OF PRODUCTS; STRATEGY GROUPS LARGE AND SMALL

Many Strategies exist to lower overall healthcare costs. Below are six approaches that employers may wish to consider.

  1. Tax Savings through offering Ancillary Products.
  2. Association Health Plans
  3. PEO (Professional Employment Organizations)
  4. Level Funded Plans
  5. Direct Care
  6. Pop Health

Tax Savings through Ancillary Products

The Benefit Source offers ancillary benefits, such as group life, disability, dental, vision, pop health, worksite benefits (Aflac), 401K, travel insurance, Flexible Spending Accounts, Health Savings Accounts, EAP, Long Term Care, Medicare supplements, Medicare Advantage Plans, Medicare Part D Rx Cards and financial assistance and purchase programs for employees.

http://thebenefitsourceinc.com/images/suite1.jpgHealthcare Premium Reduction
Offering multiple lines most often provides a premium reduction.  Carriers like Blue Cross, Aetna, Humana and United Healthcare will often decrease health premium up to three percentage points by adding lines coverage. (For employers over 50 employees).

http://thebenefitsourceinc.com/images/suite2.jpgCost and Cost Sharing:
Employer Sponsored, Voluntary or Defined Contribution are four approaches to pay the premium for v ancillary products. 
Employer pays all or a portion of premium for an employer sponsored product or the employee pays the premium for a voluntary offering.  A voluntary offering allows employees to take advantage of group rates and benefits which offer lower premium and richer benefits than most individual plans.

Some employers offer a defined contribution in which the employer provides a flat amount per employee and permits the employee to shop benefits.  This helps recruit and retain employees who waive health insurance.

Strategy For Offering Ancillary Benefits;

Employees purchase of these products reduces the gross payroll which consequently lowers the taxable amount.  Both employer and employee pay less tax.  Small employers may save hundreds, medium employers thousands and large employers tens of thousands annually.  Note; purely voluntary products have no cost to the employer and only reduce payroll and tax liability.

Associations Health Plans

Pooling small employers to obtain a lower premium rate is not new.  Association Health Plans have existed for decades but have been at the discretion of the insurance carriers.   On June 19, 2018 the Department of Labor released final regulations under 29 CFR Section 2510.3-5 that offers new options for associations to sponsor health plans for their members.  Presumably with some governmental oversight and regulations, these plans will be more attractive for carriers to consider an association offering.  As this rolls out throughout the next year, these plans will be worthy of review. 

PEO:

http://thebenefitsourceinc.com/images/suite4.jpgProfessional Employer Organizations offers an employment sharing strategy.  A separate organization assumes full fiduciary responsibility for employee benefits.  Employees enroll into a health plan or if chosen, ancillary plans (Life, dental, etc.) and enter a large employer block consisting of hundreds of thousands of employees.  Like an Association plan, this large number of employees may leverage very favorable premium rates.  Note; each employer is individually underwritten, and employees may complete applications with general medical history questions. 

Level Funded: (Market Employers 5 or more employees)
Currently, Level Funded plans often decrease premium and improve benefits.  These plans are medical underwritten and will enroll employers with as little as 5 employees.  Larger employers with 10 or more employees may be underwritten via a prescription database, eliminating applications and employee medical questions.  Employers may see a -20% in premium savings.

http://thebenefitsourceinc.com/images/suite3.jpgDirect Care:
Across the United States many medical providers are creating health plans marketed directly to the public.  In some instances, providers are assuming the role of payor, taking on many of the responsibilities of an insurance carrier. Hospitals or groups of hospitals may offer a full insurance plan to the public with very rich coverage/benefits within the mini hospital(s) network.  A traditional PPO is often attached to this plan, so members are not restricted to the mini network.  Variations of Direct Care include the carveout of certain services, such as routine outpatient care performed in large contracted medical facilities.  In this instance a very large company may directly contract with a large medical group providing rich, cost effective outpatient services increasing benefits and lowering costs.

Pop Health:

Population Health is the study of a large block of employees to determine via claim utilization, higher risk individuals before a large critical medical event.  Once identified as a potential high risk, a tailored program (wellness) is offered to the employee to move the individual from high risk to low.  Enriched employer incentives combined with optional FitBit technology have greatly increased employee participation providing healthier happier employees while reducing medical risk and stabilizing premiums.

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