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Countdown To Innovation: Employee Benefits & InsurTech

The Employee Benefits landscape is getting noisy. 

The headlines are everywhere about American healthcare costs skyrocketing. According to SHRM, the cost of employer-sponsored healthcare benefits is expected to average approximately $15,000 per employee in 2019.

The American enterprise wants to return it’s attention to increasing market share, building profitability and retaining destination employer status. With the rising cost of executing an effective total rewards program and benefits consisting of 30% of the average total compensation budget, companies are focusing on internal expenditures now more than ever.

This has led to multiple explanations and possible solutions from every direction imaginable. The current administration’s politicization of healthcare is center-stage, but revolution is also coming from the market.

The $69 billion Aetna-CVS merger has resulted in ambitious plans to bolster CVS’ primary health “Minute Clinic” to help patients focus on managing common chronic conditions and accessing primary care outside of the facility setting.

Aon’s plan to purchase rival broker Willis Towers Watson went public but was quickly dismissed as market speculation. That could have had a tremendous impact on the way companies are delivered outside consultation for their benefits operations.

Benefits professionals everywhere are joining the healthcare conversation with provocative new tactics and promises of breakthrough savings. Most employers nod their heads in agreement with their trusted consultant, but are they up to speed with the strategies being presented? 

I’ve created a concise list of benefits strategies that are gaining popularity and improving the performance of company benefit plans…and budgets.

Top 3 Benefits Buzzwords:

Reference Based Pricing (RBP)

This health insurance technique is for firms that are typically of a size that could sustain a self-funded plan. It involves unseating the traditional insurance carrier or provider network and negotiating covered services for a plan directly with the health system. Companies set an indexed limit on the amount a RBP plan will pay for certain health care services.

These plans are attractive to employers because it eliminates the costly fees associated with gaining access to an insurer’s provider network and the administrative fees associated with the major carriers. 

Without the correct execution an RBP plan can put employee financial stability at risk as a result of balance billingThere are now several vendors on the market that specialize in supporting RBP plans by assuming fiduciary responsibility away from the employer and negotiating balance bills on behalf of participants.

Value Based Care

Currently, the American health care compensation model is based largely on volume of service or fee for service. This has created the unintended consequence of encouraging providers to treat as many patients as possible rather than placing a priority on the health outcomes of their patients.

Value-based care has emerged as an alternative and potential replacement for fee-for-service reimbursement based on quality of health outcomes rather than quantity of services provided. This is currently being discussed in Congress as they have made strides towards regulating the path towards VBC.

Negotiating a value based care contract with a health system can be complex and involve council, HR and an experienced Health Insurance Consultant to effectively pilot in the best interest of a company’s employees.

Direct Primary Care

Direct primary care is when a patient eliminates the co-pay insurance model and a relationship is formed with a provider(s) as a means for patients to save money on their primary care services. This can also include other clinical services such as laboratory testing, wellness screenings and consultation.

Several vendors in the market have emerged with compelling arrangements such as monthly subscriptions in exchange for unlimited access to care, reduced wait times and comprehensive physical exams. 

This model of care of could have excellent results on the health of an employee population with a laser focus on preventative care and avoidance of preventable conditions. A disadvantage is that this kind of arrangement typically does not involve coordination of specialty care, hospital care or prescriptions.

Honorable Mentions

Employee Wellness: There are several strategies involved in promoting Wellness in the workplace which involves actively promoting employee health, disease prevention and healthy lifestyle. An effective employee wellness program has been shown to increase employee engagement, morale and reduce preventable claims. A solid Wellness program is especially important in a self-funded environment where employee claims directly impact an employer’s bottom line

Student Loan Repayment Program: With student loan debt breaching the $1T mark in the United States, employers are beginning to see financial wellness and support as critical to maintaining a productive and focused work force. A student loan repayment program works similarly to a 401(k) where an employer sponsors a plan to assist employees with the repayment of their student loans. This is currently being discussing in Washington for possible legislative support.

The universe of employee benefits can be a daunting space full of regulation, conflicting strategy and potential pitfalls. In order to accomplish the goals of your benefits program it’s essential to partner with a consultant you can trust.

If you’re in a position to shatter your company’s status quo and begin seeing a meaningful ROI from your benefits program, please don’t hesitate to contact me today…!