It should come as no surprise that carrier, plan, and policy changes come yearly in the individual market, but in the group marketplace, you may find it interesting to note that the biggest concern is still controlling costs for many employers.
Recently, a major carrier decided that the individual market was not going to be viable for them in all but the most rural 85 counties in GA and as a result, people living in populated areas of Georgia have to go to the federal exchange to find options, even if they don't qualify for a subsidy. This is a big change, and it severely limits options for those that do not have employer-sponsored coverage. For small companies that are considering abandoning group plans, citing cost increases are unsustainable, the individual market may not be as appealing as it once was due to lack of competition and options. We work with even the smallest of companies to help them ensure they have the most cost-competitive plans in-force, but for employers with over 50 employees, the challenge is a bit more daunting.
The National Business Group on Health cites providing medical and pharmacy benefits has gone up again another 5% for 2018, which means employers have to concentrate even more to maintain competitive programs without shifting too much cost, stripping benefits, or plan design changes. Though a mixture of some of these more traditional strategies may be an optimal fit for some groups, many have recognized they need to embrace emerging trends to outpace and even counteract increasing costs. Here are some of the most popular trends in cost-containment for 2018 according to the report released from NBGH:
- Telehealth--For years, Prosperity Benefits has advocated the use of telemedicine, for many reasons, but it is an efficient vehicle to control costs for the employees but also to reduce plan claims by transferring the provider charges to the telemedicine service. Once seen as an 'add-on' cost, telemedicine struggled to be fully understood. Many carriers have embraced the trend and promoted it to their members because it makes sense even for the insurance companies to use the technology to reduce their costs too. For employers, understanding the savings is straightforward:
- When an employee uses the telemedicine service, provided by a third party, non-insurance carrier especially, the claims burden is either entirely shifted or reduced significantly. An employee is speaking with a physician that is contracted by and paid by the telemedicine company, NOT YOUR PLAN. Removing these charges has a direct impact on the claims experience of the group. This strategy, when utilizes regularly by your insured population, helps to lower plan claims, which either immediately reduces costs or does so in the future (lower renewals).
- ACO's and High Performance Networks--Well, the path of entry to these networks is typically found through self-funded plans, but they, too, offer cost-savings and even improved outcomes. In an Accountable Care Organization, physicians are compensated for quality of care and positive outcomes rather than number of procedures performed, supplies used, tests ordered, etc. Under this model, efficiency is rewarded, which again equates to lower claims long-term and in the short-term as costs are significantly reduced by virtue of the structure of an ACO. High Performance Networks may offer lower discounted pricing for members, which again means lower claims for the employer sponsor. Sometimes, HPN's can also offer lower copays and deductibles for members at time of service, which reduces also the burden on the insured. The more the HPN is used, the more the employer and the employees save on costs.
- On-Site Clinics--For employers with over 200 employees in a single location, it may make sense to have an on-site clinic available to staff several times per month. On-site care provides lower, controlled costs for routine health maintenance and even one-off services like vaccines, wellness exams, or sick visits. Because on-site clinics merit a charge that is separate and distinct from the medical plan (as long as it is a third-party), group claims are lowered. What's more, due to the fact that your staff don't have to schedule time at an office off campus, they are able to spend more productive time at work. When one considers convenience as well and that some employees may not have gone to receive care at all if it wasn't on-site, employers also reap the benefit of reduced absenteeism and enhanced adherence to medications and periodic care.
- Centers of Excellence--In similar vein to HPN's, COE's offer savings with pre-negotiated pricing for employers for procedures like transplants or orthopedic surgery. Again, lower pricing means reduced claims!
- CDHP's--Making employees healthcare consumers is not a new idea, but more and more employers have adopted at least one CDHP option. These are typically paired with Health Savings Accounts and many times with an employer contribution to incentivize participation. With these plans, because the first dollars of expense are paid by the employee, there is an immediate reduction in plan spending. Due to the fact that HSA accounts have retirement planning benefits as well, they make sense for employers to offer their teams.
The information listed was derived by a report in which approximately 100 of the Fortune 500 and Global Fortune 500 companies participated. 42 of which belong to the Fortune 100. It is important to pay attention to jumbo employer trends because they typically have the most resources to devote to structuring well-balanced and cost-optimized health and welfare plans. Prosperity Benefits scales these solutions, where appropriate, to smaller employers, making an impact that is measurable quantitatively and qualitatively.